chapter 6 of business plan

Business Plan Development Guide

(6 reviews)

Lee Swanson, University of Saskatchewan

Copyright Year: 2017

Publisher: OPENPRESS.USASK.CA

Language: English

Formats Available

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Reviewed by Kevin Heupel, Affiliate Faculty, Metropolitan State University of Denver on 3/4/20

The text does a good job of providing a general outline about writing and developing a written business plan. All of the important steps and components are included. However, the text is light on details, examples, and rationale for each element... read more

Comprehensiveness rating: 3 see less

The text does a good job of providing a general outline about writing and developing a written business plan. All of the important steps and components are included. However, the text is light on details, examples, and rationale for each element of the business plan. Some examples from actual business plans would be helpful.

Content Accuracy rating: 4

For the most part, the content is accurate. The content covers all important aspects of drafting a business plan. I thought the industry analysis could use more information about collecting primary and secondary sources; instead, this information was referenced in the marketing plan section.

Relevance/Longevity rating: 5

Most of the content relies on cites as far back as 2006; however, when it comes to developing and writing a business plan nothing has changed. Thus, the content is current and there is no concern about it becoming obsolete in the near future.

Clarity rating: 4

The text is clear. There are no difficult terms used and the writing is simple. The text uses a lot of bullet points though, which gets tedious to read for a few pages.

Consistency rating: 5

The text does a good job of maintaining consistency in terms of framework and terminology. The text is organized where it's easy to find the information you want in a quick manner.

Modularity rating: 3

The text has a lot of bullet points and the paragraphs are dense. However, the use of subheading is excellent.

Organization/Structure/Flow rating: 5

The book is organized as if you're writing a business plan from start to finish, which is helpful as a practical guide.

Interface rating: 5

There are no navigation problems, distortion of images/charts, or any other display features that may distract or confuse the reader.

Grammatical Errors rating: 5

The text is free of grammatical errors. The sentence structure is simple with many bullet points, which helps to avoid any grammatical issues.

Cultural Relevance rating: 5

This book was written by a Canadian professor and provides references to Canadian sources. However, the information in this text can be used for U.S. schools.

This book is very short and provides a good, general overview about the process of creating and writing a business plan. It won't help a reader if he/she is confused about a certain part of the business plan. The reader will have to find another source, such as "Preparing Effective Business Plans" by Bruce Barringer, Ph.D. The book provides links to good resources and a finished business plan that the reader can reference. I would recommend the book for undergraduate courses.

Reviewed by Kenneth Lacho, Professor of Management, The University of New Orleans on 6/19/18

1. Text is relevant to Canada. Not the United States 2. Needs to cover resources available to entrepreneur, e.g., federal government agencies, trade associations, chambers of commerce, economic development agencies. 3. Discuss local economy or... read more

1. Text is relevant to Canada. Not the United States 2. Needs to cover resources available to entrepreneur, e.g., federal government agencies, trade associations, chambers of commerce, economic development agencies. 3. Discuss local economy or economic area relevant to this proposed business. 4. Business model ok as a guide. 5. Suggested mission statement to cover: product/business, target customer, geographical area covered. 6. Need detailed promotion plan, e.g., personal selling, advertising, sales promotion, networking publicity, and social media. 7. How do you find the target market? 8. Chapter 6 too much detail on debt and equity financing. 9. Discuss how to find sources of financing, e.g., angels. 10. Expand coverage of bootstring, crowdfunding. 11. Chapter 4 – good checklist. 12. Chapter 3 - overlaps. 13. Chapter 7 – 3 pages of executive summary – double or single spaced typing. Number all tables, graphs. 14. Some references out-of-date, mostly academic. Bring in trade magazines such as Entrepreneur.

Content Accuracy rating: 5

In my opinion, the content is accurate and error free.

Relevance/Longevity rating: 4

The material is relevant to writing a business plan. I wonder if the Porter, SWOT VRIO, etc. material is too high level for students who may not be seniors or have non-business degrees (e.g., liberal arts). Porter has been around for a while and does have longevity. The author has to be more alert to changes in promotion, e.g., social media and sources of financing, e.g., crowdfunding.

Clarity rating: 3

As noted in No. 9, the tone of the writing is too academic, thus making the material difficult to understand. Paragraphs are too long. Need to define: Porter, TOWS Matrix, VRIO, PESTEL. A student less from a senior or a non-business major would not be familiar with these terms.

Consistency rating: 4

The text is internally consistent. The model approach helps keep the process consistent.

Modularity rating: 4

The process of developing a business plan is divided into blocks which are parts of the business plan. Paragraphs tend to be too long in some spots.

Organization/Structure/Flow rating: 4

The topics are presented in a logical step-wise flow. The language style is too academic in parts, paragraphs too long. Leaves out the citations. Provides excellent check lists.

There are no display features which confuse the reader.

Grammatical Errors rating: 4

The text has no grammatical errors. On the other hand, I found the writing to be too academic in nature. Some paragraphs are too long. The material is more like an academic conference paper or journal submission. Academic citations references are not needed. The material is not exciting to read.

The text is culturally neutral. There are no examples which are inclusive of a variety of races, ethnicities, and backgrounds.

This book best for a graduate class.

Reviewed by Louis Bruneau, Part Time Faculty, Portland Community College on 6/19/18

The text provides appropriate discussion and illustration of all major concepts and useful references to source and resource materials. read more

Comprehensiveness rating: 5 see less

The text provides appropriate discussion and illustration of all major concepts and useful references to source and resource materials.

Contents of the book were accurate, although it could have benefited from editing/proofreading; there was no evidence of bias. As to editing/proofreading, a couple of examples: A. “Figure 1 – Business Plan… “ is shown at the top of the page following the diagram vs. the bottom of the page the diagram is on. (There are other problems with what is placed on each page.) B. First paragraph under heading “Essential Initial Research” there is reference to pages 21 to 30 though page numbering is missing from the book. (Page numbers are used in the Table of Contents.)

The book is current in that business planning has been stable for sometime. The references and resources will age in time, but are limited and look easy to update.

Clarity rating: 5

The book is written in a straightforward way, technical terms that needed explanations got them, jargon was avoided and generally it was an easy read.

The text is internally consistent in terms of terminology and framework.

Modularity rating: 5

The book lends itself to a multi-week course. A chapter could be presented and students could work on that stage of Plan development. It could also be pre-meeting reading for a workshop presentation. Reorganizing the book would be inappropriate.

The topics in the text are presented in a logical, clear fashion.

Generally, the book is free of interface problems. The financial tables in the Sample Plan were turned 90° to maintain legibility. One potential problem was with Figure 6 – Business Model Canvas. The print within the cells was too small to read; the author mitigated the problem by presenting the information, following Figure 6, in the type font of the text.

I found no grammatical errors.

The text is not culturally insensitive or offensive in any way.

I require a business plan in a course I teach; for most of the students the assignment is a course project that they do not intend to pursue in real life. I shared the book with five students that intended to develop an actual start-up business; three of them found it helpful while the other two decided not to do that much work on their plans. If I were planning a start-up, I would use/follow the book.

Reviewed by Todd Johnson, Faculty of Business, North Hennepin Community College on 5/21/18

The text is a thorough overview of all elements of a business plan. read more

Comprehensiveness rating: 4 see less

The text is a thorough overview of all elements of a business plan.

The content is accurate and seems to lack bias.

Content seems relevant and useful . It does not help an entrepreneur generate ideas, and is very light on crowdfunding and other novel funding source content. It is more traditional. This can be easily updated in future versions, however. "Social Media" appears once in the book, as does "Crowd Funding".

The book is comprehensive, but perhaps not written in the most lucid, accessible prose. I am not sure any college student could pick this up and just read and learn. It would be best used as a "teach along guide" for students to process with an instructor.

The text seems consistent. The author does a nice job of consistently staying on task and using bullets and brevity.

Here I am not so certain. The table of contents is not a good guide for this book. It does make the book look nicely laid out, but there is a lot of complexity within these sections. I read it uncertain that it was well organized. Yes there are many good bits of information, however it is not as if I could spend time on one swathe of text at a time. I would need to go back and forth throughout the text.

Organization/Structure/Flow rating: 2

Similar to the above. I did not like the flow and organization of this. An editor would help things be in a more logical order.

Interface rating: 2

The interface is just OK. It is not an attractice interface, as it presents text in a very dense manner. The images and charts are hard to follow.

I did not find any grammatical errors.

Cultural Relevance rating: 4

I a not certain of the origins of Saskatchewan, but I do feel this is a different read. It is more formal and dense than it has to be. This would be a difficult read for my students. I do not feel it is insensitive in any way, or offensive in any way.

I would not adopt this book if given the chance. It is too dense, and not organized very well, even though the information is very good. The density and lack of modularity are barriers to understanding what is obviously very good information.

Reviewed by Mariana Mitova, Lecturer, Bowling Green State University on 2/1/18

Though this textbook has a prescriptive nature, it is quite comprehensive. The author strikes a good balance between presenting concepts in a concise way and providing enough information to explain them. Many every-day examples and live links to... read more

Though this textbook has a prescriptive nature, it is quite comprehensive. The author strikes a good balance between presenting concepts in a concise way and providing enough information to explain them. Many every-day examples and live links to other resources add to the completeness of the textbook.

Content seems accurate.

Since the content is somewhat conceptual, the text will not become obsolete quickly. In addition, the author seems to be updating and editing content often hence the relevance to current developments is on target.

The text is very clear, written in clear and straight-to-the point language.

The organization of content is consistent throughout the entire text.

The textbook is organized by chapters, beginning with overview of the model used and followed by chapters for each concept within the model. Nicely done.

The flow is clear, logical and easy to follow.

Overall, images, links, and text are well organized. Some headlines were misaligned but still easy to follow.

No concerns for grammar.

No concerns for cultural irrelevance.

Reviewed by Darlene Weibye, Cosmetology Instructor, Minnesota State Community and Technical College on 2/1/18

The text is comprehensive and covers the information needed to develop a business plan. The book provides all the means necessary in business planning. read more

The text is comprehensive and covers the information needed to develop a business plan. The book provides all the means necessary in business planning.

The text was accurate, and error-free. I did not find the book to be biased.

The content is up-to-date. I am reviewing the book in 2017, the same year the book was published.

The content was very clear. A business plan sample included operation timelines, start up costs, and all relevant material in starting a business.

The book is very consistent and is well organized.

The book has a table of contents and is broken down into specific chapters. The chapters are not divided into sub topics. I do not feel it is necessary for sub topics because the chapters are brief and to the point.

There is a great flow from chapter to chapter. One topic clearly leads into the next without repeating.

The table of contents has direct links to each chapter. The appearance of the chapters are easy to read and the charts are very beneficial.

Does not appear to have any grammatical errors.

The text is not culturally insensitive or offensive.

I am incorporating some of the text into the salon business course. Very well written book.

Table of Contents

Introduction

• Chapter 1 – Developing a Business Plan
• Chapter 2 – Essential Initial Research
• Chapter 3 – Business Models
• Chapter 4 – Initial Business Plan Draft
• Chapter 5 – Making the Business Plan Realistic
• Chapter 6 – Making the Plan Appeal to Stakeholders and Desirable to the Entrepreneur
• Chapter 7 – Finishing the Business Plan
• Chapter 8 – Business Plan Pitches

References Appendix A – Business Plan Development Checklist and Project Planner Appendix B – Fashion Importers Inc. Business Plan Business Plan Excel Template

Ancillary Material

About the book.

This textbook and its accompanying spreadsheet templates were designed with and for students wanting a practical and easy-to-follow guide for developing a business plan. It follows a unique format that both explains what to do and demonstrates how to do it.

About the Contributors

Dr. Lee Swanson is an Associate Professor of Management and Marketing at the Edwards School of Business at the University of Saskatchewan. His research focuses on entrepreneurship, social entrepreneurship, Aboriginal entrepreneurship, community capacity-building through entrepreneurship, and institutional-stakeholder engagement. Dr. Swanson’s current research is funded through a Social Sciences Humanities Research Council grant and focuses on social and economic capacity building in Northern Saskatchewan and Northern Scandinavia. He is also actively studying Aboriginal community partnerships with resource based companies, entrepreneurship centres at universities, community-based entrepreneurship, and entrepreneurial attitudes and intentions. He teaches upper-year and MBA entrepreneurship classes and conducts seminars on business planning and business development.

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 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 business planning

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

You understand that planning helps you: 

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

As you start to write your 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 completing your 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

This 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

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

Last, but certainly not least, is your financial plan chapter. 

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 for your 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

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

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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 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.

Having 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 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
• Templates and examples

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11.4 The Business Plan

Learning objectives.

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

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

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

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

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

Business Plan Overview

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

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

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

Purposes of a Business Plan

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

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

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

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

Link to Learning

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

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

Types of Business Plans

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

Brief Business Plan or Executive Summary

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

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

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

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

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

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

Are You Ready?

Create a brief business plan.

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

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

Full Business Plan

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

Executive Summary

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

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

Business Description

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

Industry Analysis and Market Strategies

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

Competitive Analysis

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

Operations and Management Plan

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

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

Marketing Plan

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

Financial Plan

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

Entrepreneur In Action

Laughing man coffee.

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

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

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

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

What Can You Do?

Textbooks for change.

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

Work It Out

Franchisee set out.

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

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

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

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

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Where Entrepreneurs Find Inspiration

Ideas and Research from Stanford University

Chapter 6: The Business Story and Plan

Entrepreneurs respond to attractive opportunities by forming new firms. In this chapter, we consider the five-step process for establishing a new enterprise. One particularly noteworthy step in the process is the development of a story and a business plan, including a compelling business model. The story is a compelling synopsis of why this venture is needed at this moment in time and how it can achieve success. We then detail the task of writing a business plan, which is an effort to better prepare the venture for testing its assumptions and hypotheses. An example of a well-prepared business model is provided in appendix A. Visit the textbook website for additional sample business plans, models and slide (or pitch) decks.

1. “Purpose of a Business Plan” with Tom Byers, Stanford University

2. “Work Backwards From the Customer” with Diego Piacentini, Amazon

3. “Have a Sense of Urgency” with Mike Maples, Floodgate

Continue to Chapter 7

Tom Byers , Stanford University

Tom Byers is a Professor in the Department of Management Science & Engineering at Stanford University and a faculty director of the Stanford Technology Ventures Program (STVP).

Andrew Nelson , University of Oregon

Andrew Nelson is Associate Vice President for Entrepreneurship and Innovation and an Associate Professor of Management at the University of Oregon.

Richard Dorf , University of California, Davis

Richard C. Dorf is a Professor Emeritus of Management and Electrical and Computer Engineering at the University of California, Davis.

Lessons from a Large Founding Team [Entire Talk]

Video clips.

Find Co-founders You Trust

Diversify your team’s thinking, how to split equity, should you tell before you sell, a controversial take on culture, monetizing open-source projects.

Deep Tech Innovation [Entire Talk]

A Pioneering Approach to Innovation

A process for innovation, essential questions before launch, the challenge of biology, reimagining and funding better treatments, the right move, the right speed.

The Possibilities of AI [Entire Talk]

Don’t Pursue the Obvious Ideas

When to be contrarian, is developing ai worth the money, the subtle dangers of agi, responsible ai deployment, global and equitable ai access, smart ai and society.

From Academia to Entrepreneur by Eugene Khor

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Business Plan

This chapter starts with a discussion of the function of a business plan. This is followed by comments on key elements of a business plan.

perfect business plans; executive summary; vision and mission; background and overview; product portfolio; make profit; market analysis; SWOT; organization structure; revenue projection; budget

6.1 The Perfect Business Plan

6.2 Executive Summary (Execsum)

6.3 Vision and Mission

6.4 Introduction and Background

6.5 Business Overview

6.5.1 Proposed Share Structure

6.5.2 IP Portfolio

6.5.3 Products

6.5.3.1 Lead Product

6.5.3.2 Follow-on Product

6.5.3.3 R&D Plans

6.5.4 Business Model

6.6 Market Analysis

6.8 Organizational Structure

6.8.1 Key Management and Team ...

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1.1: Chapter 1 – Developing a Business Plan

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• Page ID 21274

• Lee A. Swanson
• University of Saskatchewan

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Learning Objectives

After completing this chapter, you will be able to

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

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

Purposes for Developing Business Plans

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

Internal Purposes

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

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

External Purposes

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

Business Plan Development Principles

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

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

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

General Guidelines for Developing Business Plans

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

As You Write Your Business Plan

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

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

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

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

1. First main heading

1.1 First subheading under the first main heading

1.1.1. First sub-subheading under the first subheading

2. Second main heading

2.1 First subheading under the second main heading

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

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

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

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Chapter 6 Writing A Business Plan

how to write a business plan

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Chapter 6: Key Elements of the Business Plan

Updated: Apr 18, 2022

If you only take one thing away from this book, take this chapter. This is important stuff. Absolutely no one will take you seriously without a formal, written business plan. And even then, it has to be realistic, well thought out, and well researched.

This is what separates the dreamers from the doers. And I am not going to kid you, it is a lot of work.

However painstaking this exercise is, it is worth every moment you spend on it. The development of your formal, well written, comprehensive business plan forces you to ask questions and address issues that you perhaps have not even considered.

It is meant to be realistic, so if you are doing it honestly, much of the work can be and will be unpleasant.

It will make you realize that there are challenges you have not considered. It will make you learn more about the industry you have chosen to disrupt. It will make you set goals and make you develop strategies. If you succeed in this exercise, it will convince you that this is the path you have chosen for your future and it will energize you like no other.

The key then again here is honesty. You are only hurting yourself and wasting other people’s precious time unless you face facts and deal in the reality.

Another important thing to remember is that this business plan, your business plan, is a work in process. It is a live instrument. It is always changing, it is always growing, it is always evolving. As you get more data, today’s business plan is not your last business plan. Do not hesitate to update it, add to it, enhance it, enrich it, especially as more facts and more data come to your attention.

People came into our incubator. They were convinced that they had THE IDEA. We were intended to provide the location, the programming, the expertise, and the resources to develop and to grow their idea.

All they “needed”, they would then tell us, was $250,000 to launch. Well, more often than not, it turned out that they did not really need an immediate $250,000 to launch. In reality, what they really needed was a better, more focused business plan and $100,000 for a better marketing program.

A great marketing program can rescue a struggling sales strategy.

The point is, before you jump into that cockpit and buckle up for the ride of your life, you need a flight plan. No one will take you seriously without a business plan. You cannot even take yourself seriously without a written business plan.

To you, the young, energetic, optimistic entrepreneur, it is not really even the business plan that is the important aspect here. It is the process. You will hear that time and again. It is all about the process.

The process of writing a serious business plan forces you to carefully examine the market that you are invading with your service or your device or your product. It has to be realistic, as in, based in reality, and not your personal vision of reality. It will be objective, informative, detailed, resourced, and precise.

It must be realistic. You need hard market data and resourced facts to back up and support your claims. There is no emotion to this. Your passion will surface simply in the detailed effort you have put into the process of developing your business plan.

Personally, my focus is on the management team and the financial projections. But I am a former lender, and character is important to me. Generally speaking, numbers do not lie, but financial projections have to be realistic. This is where your strategy and your goals will come into play and manifest themselves. More often than not, I am investing in the management, not just the product or the service.

Many lenders, many investors, your venture people, they will focus on the marketing and sales strategy, since after all, that is how they get paid back.

The point is, every element of your business plan is important to someone scrutinizing your dream. Invest the time it takes to present everything fully, in the very best light. Try not to leave any questions for the investor. Show them that you have considered everything and answer every viable concern in your business plan.

Investors will question your experience, your expertise in the industry in order to predict the velocity of their return. They will question your resources. If they have to question your passion, you have already lost.

And, they are comparing your plan to the other 117 business plans on their desk. If you want their money, that’s your competition. Make the reader want to turn the page and learn more. The best business plans get the dough, pure and simple.

You can obtain many versions of a sound business plan outline anywhere on the internet. But basically, this outline below is what it will always come down to. I will list the outline for you to follow, and do not invent a new one. I will explain each element and I will tell you what to focus on and why it is valuable and important. I will also add some suggestions for complementary material, again, simply because it is imperative to show that you have considered everything you need to launch your business.

Business Plan Outline

Executive Summary

Business Description

Definition of Market

Description of Products and Services

Organization and Management

Marketing and Sales Strategy

Financial Management

Financial Projections and Analysis

#1 .) An Executive Summary is exactly what it sounds, a summary. Never more than one page. It is meant to be an introduction to you and your idea. It is your concept and your “ask”. Key word is brief. To get the reader invested, to distinguish your idea, it has to be compelling. Simply stated, this is the Who, the What, the Why, and the How. You will fill in the blanks later, but this is your introduction to the Business Plan.

This is your passion. This is your drive. This is your destiny. This is what keeps you up at night. This is where you make the reader want to share your passion. This is where you want the reader to get involved in this partnership.

#2 .) The Business Description more fully describes your concept. You have heard about the elevator speech. This is the detailed description of your idea, presented in a clear and concise and articulate way, so that the reader’s eyes do not fold up into the back of his head.

#3 .) The Definition of Market is where your initial research shows up. You need this especially to convince yourself that there is a market out there, that there s a need for your product at this time. This market needs you, and it needs you now. Tell the reader what is missing in this market and why you have the solution. The sooner you get this product out of your basement and on to the shelves of Best Buy, the better off this world will be.

#4 .) The Description of Products and Services section is where you explain what keeps you up at night. The concept is clear in your head. This is where you make it clear in the head of your investors. How did this idea pop into your head? What does this product do better than the competition? What industry are we disrupting? Why is this product the answer to the world’s confusion?

You do not need to reveal any secret sauce here. That is your private information and you are right to protect it. With the proper signed non-disclosure agreements much later, your personal intellectual property will come out. But not at this time. You do not want your interviewer abruptly dismissing you only to have him call his fraternity buddy after your session with “his” hot new idea. It happens.

#5 .) Organization and Management: This is the section where you describe the current corporate structure. Do you have a sole proprietorship? Is this some kind of partnership? There are many different types of corporations? Which type are you thinking of pursuing.

You are going to have to do your homework on this one. There are many options to explore. It is not uncommon to start one way and change to another as the situation evolves. You will need to talk with an organizational or an entrepreneurial attorney to most fully explore which option is best for you.

There is no real wrong option. Depending on what your goals are, depending on your business development plans, or your growth plans, depending upon your appetite for risk, some options are definitely better for you than others. This will take research and time, but it will force yourself to address many important issues and it will save you a ton of Advil down the road. Invest the time and do it right. Then describe it in this section.

Additionally, this is the section where you get to talk about yourself. What role do you play? What responsibilities do you have? Who else will be in any management position? How are the various corporate or managerial tasks allocated? What qualifications do you bring to the company?

You don’t need a full resume, but the more personal information you are comfortable with sharing with the investors, it is easier it will be for them to judge your ability to lead a company.

Obviously, education and past experience play an important role in this section. Share yours along with the other key members of your team.

#6 .) Marketing and Sales Strategy: You could have stumbled onto the coronavirus vaccine in your lab, but unless you know how to properly market this, it stays in the lab. You have vision. You have drive. You have advanced degrees. You have a support network. You probably are not great at every aspect of building and growing a company. Somewhere along the line, sooner rather than later, you are going to budget, and you need staying power.

Today, more than ever, with digital advertising and internet marketing, you will need help. Developing an interactive website, narrowing down your specific target audience, product surveys, feedback on Twitter, this all takes time and expertise. You are trying to develop a product and bring it market. You don’t have the time to develop a comprehensive marketing plan. Call the experts. Then use your time where it is most productive.

#7 .) Financial Management: Most likely, you are an idea lady. You have the vision. You have noticed a hole in the universe. You have developed the faster, smarter, cheaper, and more efficient mouse trap. But you don’t even know how to balance your checkbook. This is understandable. It is almost desired. This is where the resourcefulness we talked about comes in. You’ve got a guy. You have noticed you need this. You have talked with financial experts. You are developing a team. You have discussed the need to keep track of income, expenses, purchases, capital outlays, payroll, local and state and federal taxes, financial controls, internet security. You will keep track of every Office Depot receipt. You will meet regularly with your financial expert who understands all of the mundane financial reporting requirements and prepare the necessary reports and statements.

You have this covered.

#8 .) Financial Projections and Analysis: This is the language that your investor understands. Do not be surprised if this is the section she flips to right after the Executive Summary. Some people live for this stuff. This is the section you will most likely spend most of your time on. At least it will certainly seem like that to you.

When you get your questions? This will be where they come from. Trust me.

This is not science fiction. This is true hard core financial projections. You need reality based income and expense statements, cash flow statements, balance sheets, monthly projections of your first year in business. Then you will need a five year projection showing business growth, return on investment, operating reserves, capital outlays, cost of goods, every expense from paper clips and rubber bands to office rent and advertising.

You will be quizzed on the source and the substantiation of each and every number you provide.

You need to know and understand this section like your ex-girlfriend’s Facebook page. Act like your life depends on it, because it does.

It is vitally important to explain where you are going, and it is even more important to explain how you intend to get there. And when. I do not believe it can be understated how important this section is to your success in this interview.

Fear not, there are people and resources out there to help with this task. You have to know where to look.

Personally, I always have the entrepreneur include adding the relevant real estate considerations. Office location surrounding area, office lease terms, furniture, fixtures, office equipment, lab equipment, technology infrastructure, parking, access to public transportation, ability to expand, ability to contract (downsize), and of course, cost. It shows that you have considered one of your earliest major expenses and most likely your largest contributor to overhead. It makes you consider your physical surroundings.

These are important considerations: first impressions of your new clients and your prospective employees, customer access, attraction of staff and co-workers, your ability to make customer calls, to get coffee, to eat, to stay and work late, to easily and comfortably transact the business of your business.

It is a very important aspect, and one you need to consider most thoughtfully before you launch. You had better be comfortable because you are going to be there a lot.

Here are the things you need to ask yourself:

Just where is this magic going to happen?

If you have an office planned, where is it located?

What is in the surrounding location?

Is it secure?

Will your employees feel safe?

Is it conducive for business development?

Will customers come to visit?

Is parking available?

Can you rely upon public transportation?

Do you have written lease terms, appropriate for a new business startup?

Have you accounted for initial costs like furniture, equipment, technology infrastructure?

Do you have the ability to expand?

Do you have an escape plan if you need to put the business on pause, or even bail out?

Finally, does the office cost figure into your overhead expenses in your operating projections?

It is all about the process.

Ok, you have waited long enough. Here is the meat of the operation. I gave you the skeleton up above in your outline. Now we put the meat on the bones. You cannot adequately plan your business venture without a careful in depth consideration of the following.

In business plan jargon, you are going to hear the term SWOT a lot, and I do not mean the highly trained first responders who jump out of a van with their high tech laser guided rifles aimed at your business startup, even though this is definitely a hostage situation.

In order to appropriately steer your planning process in the right direction, you should plan to spend most of your business plan focus and development time specifically on your SWOT.

Opportunities

And if I failed to mention it earlier, remember to be realistic.

This is where you include why your business will succeed. How are you different? What distinguishes you from Acme Products down the street? Why are you so special? Why are you better?

How do you compare next to all of your competition, in all aspects of consideration, including cost, location, price, value, management, resources, marketing?

Here is where you explain why you are better, cheaper, faster, and how you intend to break into this specific market at this specific time. Be modest, but be firm. Be genuine and be convincing. But most of all, be able to back it up.

You remember when I spoke about honesty and reality above? Well, this is where it shines.

This section alone will make you focus on things you have perhaps never thought about.

More importantly, it is almost imperative for the reader of your business plan, that is your investor, it is important for her to know that you have carefully considered each of these items and realistically in your process. They will normally and naturally have follow up questions of your business plan, but they will remember that you have carefully considered these important elements and that you took them on.

In the cross examination of your business plan, you never want to be in a position where you have to say “Good question” or “I don’t know” or “I will have to get back to you on that one”. The finished business plan is where the process is much more important than the product.

Investors want to know, what were you thinking when you wrote that?

Your business plan will continue to be a work in process. It will need continuing care and attention, updating, fine tuning, and tweaking. Overall, it will be evolutionary in nature. Today’s finished business plan will most likely not be your last business plan.

Basically, the business plan is you, on paper, or in a power point presentation. Don’t be defensive in your pride of authorship. Accept constructive criticism gracefully. Your next pitch may depend on it.

Just going through this process may change the focus of your business based upon the discoveries you make and the facts you uncover in your research.

You will need to remain flexible and open to this change. You need to recognize that you have to put the original plan on pause while you go off in a new and different direction, based upon your thorough research.

Do not allow for surprises in your presentation, yours or the investor’s.

Nobody likes surprises. Bankers and investors hate surprises. They are quick to judge when they are caught off guard. Either you withheld information, or you should have known. There is nothing in between. Harsh but true.

In your business plan, take equal time to explain what you believe to be your weaknesses. Everybody has them. If you don’t think you have one, well that’s the one. Go beyond explaining what you feel your particular weakness may be. But, and this is important, do not forget to add that even though this is a perceived weakness, you have a plan to overcome that. You have a team, you have a partner, you have resources, most importantly you have a plan. You are aware, you are working on it and it can easily be overcome. Here’s how.

If your weakness is marketing, as is often the case, don’t be afraid to mention it. Simply explain how you expect to overcome your weakness.

Explain why you feel that there is a market for you. Just how do you perceive those opportunities? Why isn’t somebody already doing this? Who is doing this? Just what are you bringing to the party? Why will it work at this time?

So lastly, acknowledge your competition. That could be your largest perceived threat. Explain how you intend to drive market share. How do you intend to exploit the weaknesses of your competition and drive them out of the market?

How will developing technology affect your goals and strategies?

You may be forced to change your business model. Based upon recent research, you may need to adapt to change based simply on new technology, new developments, recent legislation, new management.

These are the most common threats. You have to face them.

You may even be forced to abandon your model if your research proves that the competition is too well positioned in the market, or that your resources are not deep enough to weather the competition or a sudden downturn in the economic climate.

Here’s a good one to consider: Where will you draw from to assemble your labor pool? Qualified labor is a growing threat in today’s economy.

Or, what do you have to pay to attract the kind of employees that you will need? What will you have to offer prospective employees in terms of salary and benefits and working atmosphere in order to attract them to your shop. What training will you need to offer? What investments in their abilities will be required in order to have them work efficiently and to represent your company?

This is why you have to go through this process. This is why the process is so valuable.

You certainly do not want your banker or your investor asking these questions. It has to be considered by you and it has to be incorporated into your business plan document. Take off the rose colored glasses for a while and look at your market realistically.

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• Environment
• Environment Agency business plans

Environment Agency business plan 2024 to 2025

Published 20 May 2024

Applies to England

© Crown copyright 2024

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected] .

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at https://www.gov.uk/government/publications/environment-agency-business-plans/environment-agency-business-plan-2024-to-2025

1. Introduction

We are the Environment Agency ( EA ), a non-departmental public body established in 1996 and sponsored by the  Department for Food and Rural Affairs ( Defra ). In our roles as regulator, operator, adviser, responder, and research centre, we are tasked with:

• protecting and enhancing the environment as a whole
• contributing towards sustainable development

Our remit primarily covers England, though our influence and collaboration with other UK environmental bodies and partners extends beyond England’s borders. England represents approximately:

• 13 million hectares of land
• 22,000 miles (35,000 km) of river
• 3,100 miles (5,000 km) of coastline seawards to the three-mile limit, which includes 2 million hectares of coastal waters

Through our work we contribute towards the UK government’s 25 Year Environment Plan ( 25YEP ) which launched in January 2018. It set out 10 ambitious goals relating to key aspects of our remit including:

• the environment
• biodiversity
• air quality
• waste reduction
• climate change mitigation

The Environment Act 2021 legally enshrined the commitment to refresh the 25YEP every 5 years. In 2023 the first review of the 25YEP resulted in the Environmental Improvement Plan ( EIP ). The plan builds upon the vision of the 25YEP and sets actions to achieve its goals. It reflects the UK’s commitment to environmental stewardship and global biodiversity conservation.

Key areas we contribute to include:

• halting biodiversity decline
• resource management
• climate change adaptation
• enhancing beauty and heritage

EA2025 – our current 5-year corporate action plan – comes to an end in March 2025. It reflects the ambition of the 25YEP .

This business plan sets out our priorities for 2024 to 2025. It will help focus our delivery as we transition to a new corporate action plan in our 30th anniversary year.

2. Foreword from the Chair

As the primary environmental regulator in England, we exist to create better places for people, wildlife, and the environment. We are here to:

• protect and improve the environment
• support sustainable development

This business plan represents a hugely important and exciting step forward for the Environment Agency. It will guide our delivery towards this mission for 2024 to 2025.

As Chair, I regularly meet with our partners, stakeholders, and communities up and down the country. They tell me they want the Environment Agency to:

• keep rivers clean
• hold polluters to account
• protect homes and businesses from the devastating impact of flooding

Their expectations are clear, and we must strive to meet them. Ultimately, we will be judged on our performance and the outcomes we deliver. We must therefore find ways to enhance and improve it in everything we do.

In the year ahead this includes:

• supporting our people to be more integrated and able to work more effectively as one team
• increasing transparency
• improving the way we use data and information to inform our decisions

This is already happening with regards to our role in ensuring people and wildlife have clean and plentiful water. This will continue to be a huge focus for the organisation. It remains one of the biggest challenges we face but also one of the biggest gifts we can give to future generations. This plan highlights work we will do this year to improve water quality. I look forward to meeting many of our new recruits who will drive this work forward in the year ahead.

We will contribute to green growth and a sustainable future for the country through our continued work on:

• the Flood and Coastal Erosion Risk Management Programme
• maintaining our strong performance on regulation

We can look back on 2023 to 2024 and be proud of what we have delivered. Through this business plan we can also look forward with a sense of optimism and determination. We know that if we can deliver it, we can achieve excellence as a leading environmental regulator. And more importantly make many people’s lives, and the places and environments in which they live, much better.

Alan Lovell, Chair

1 April 2024

3. Foreword from the Chief Executive

Our 2024 to 2025 business plan marks the next stage in our journey. We shall focus on:

• meeting the aspirations and standards the public hold for us
• expanding our work on water quality and waste management
• committing to challenging but realistic efficiency and savings targets

We start the year having achieved very good results in 2023 to 2024. This includes:

• protecting more homes from flooding
• delivering an excellent incident response
• cleaner healthier air (year-on-year reduction in pollutants)
• protecting people and the environment through effective regulation (97% compliance at permitted sites)

Our customer service improved too, as we met Freedom of Information deadlines and service standards for permitting.

We have delivered these improved results whilst managing one of the wettest winters on record.

Three years into the second flood asset capital programme , we have protected an additional 88,272 properties (101% of target) on top of more than 314,000 homes protected under the first 6-year programme. Over the last winter period, sadly almost 7,000 properties did flood (with over 240,000 properties protected) which underlines the on-going threat flooding poses to people’s lives and livelihoods.

I pay tribute to all our staff who worked tirelessly, often through weekends and holidays, to deliver an effective response to the weather and flooding we experienced last year.

As we look to 2024 to 2025, we will meet 2 major challenges. Firstly, to deliver a step change in our work on water quality. This follows the government’s approval to invest up to £53m in a new water inspection, enforcement, and data capability. This will ensure we can play a key part in delivering the government’s accelerated Plan for Water , assessing our progress and contribution against our targets and performance framework. We will need to work with all parties to move the dial on water quality and we are determined to succeed as a regulator in this domain.

Our second challenge will be to realise a major step forward on waste management. The coming year has many critical milestones as we deliver the government’s ambitious waste strategy. Core to success will be finding our voice as a confident regulator, which responds to the concerns of communities impacted by poor waste management and waste crime.

Our people are of course at the heart of what we do. In the year ahead we have set targets to improve diversity, building on our success in the last year. We want to introduce new talent schemes, particularly for under-represented groups, expand our work in sponsoring early career professionals, and sign the Armed Forces Covenant.

We know we can rely on our talented, passionate, and skilled staff to deliver for the environment and our communities in the year ahead.

Philip Duffy, Chief Executive and Accounting Officer

4. Final year of our 5-year corporate plan – EA2025

2024 to 2025 will be the final year of our current 5-year corporate action plan – EA2025 .

• reflects and connects with our people’s passion to protect and enhance the environment
• maps our varied and wide-reaching work to the ambition set out in the 25 Year Environment Plan ( 25YEP )

In the period of EA2025 the world came to grips with the Covid 19 global pandemic. For the Environment Agency, EA2025 helped us retain our sense of purpose and come through an enforced transformation on working practice. The pandemic also heightened the public’s awareness and appreciation of the environment and the places people live.

Our delivery of EA2025 has been tracked and published on GOV.UK in regular quarterly updates of our corporate scorecard . Whilst some of the measures have evolved over the period between 2020 to 2024, we can track our progress in delivering for the places and communities we serve. Our results in 2023 to 2024 are the latest in that series.

Looking ahead, we shall replace EA2025 with our new corporate action plan in 2025 when we will celebrate our 30th anniversary. We are focusing increasingly on the things we are uniquely placed and empowered to do to deliver against our long-term goals set out in EA2025. This focus aligns with:

• growing expectations of the public
• contributing to the delivery of the government’s Environmental Improvement Plan ( EIP )
• other significant contributions we make across a range of government policy and environmental legislation, including net zero and levelling-up

This 2024 to 2025 business plan will help us focus on:

• leveraging our roles (regulator, adviser, operator, responder and research centre)
• the powers given to us by government (as part of our statutory duties and legal responsibilities) to deliver on and progress the ambition set out in our long-term goals

In renewing our corporate plan, we shall take the opportunity to ensure we provide clarity to our people, our partners, and stakeholders, those we regulate, and the public on:

• our purpose as an organisation and our vision for the future
• how we shall bring all the resources we have to bear in delivering against that vision

5. Our performance in 2023 to 2024: making a difference

The Environment Agency use a red, amber, green system to see how we are performing:

• green - we are performing at or above the target(s) set
• amber - we are falling slightly short of the target
• red - there are improvements to be made

This table shows the red, amber, green scores for the measures plus the actual and target figures.

5.1 Corporate scorecard 2023 to 2024

6. our priorities and focus for 2024 to 2025.

In 2024 to 2025 we will do all we can to better enable our people to meet the challenges we face in the years ahead.

To do this means embarking on a journey of transformation. This is crucial if we are to secure the developments needed to improve our services to the public and to those we regulate.

A fundamental part of this journey will mean driving efficiencies and delivering better outcomes. In 2024 to 2025 we will focus on:

• developing and recruiting people with new skills
• applying new digital technology tools
• embracing a culture of innovation and agility
• providing clarity on priorities
• streamlining how we do things
• removing duplication
• speeding up decision making and action

Transformation will also underpin our drive to deliver efficiencies against our grant-in-aid and charges income. This will all mean we are better able to align our resources and effort to secure the best possible outcomes for people and the environment.

Our people are central to our future success. We will therefore continue to:

• prioritise their health, safety, and wellbeing
• provide opportunities for personal development and offer flexible working
• provide an inclusive and supportive working environment that reflects the diversity of the communities we serve

7. Focus areas for the year ahead

Our focus on water will mean a significant uplift in resources for our work to improve water quality, and options to address water quantity. We will :

• hire our first new water regulators and begin training them, as we expand our water industry water quality regulation teams from 130 staff to 340 by the end of the year
• deliver 4,000 inspections of wastewater and storm installations, and we will publish our findings
• look at options to use near real time event duration monitoring data, when it becomes available, as a development from the new data capabilities to provide mapped data on storm overflow spills and flow to full treatment data, which are already in use by Area teams
• complete 4,000 agriculture outcomes and farm inspections
• invest an additional £5.8m in 2024 to 2025 in water industry enforcement activity, enabling us to effectively tackle the worst offenders and make full use of voluntary undertaking and variable monetary penalties to tackle serious environmental offending impacting water
• continue to drive water industry investment through Price Review 2024, including securing options to close the 5 billion litre-per-day gap between supply and demand, and ensuring that the water industry deliver on their legal obligations to improve the water environment
• work with all water abstractors to help them understand and secure their water resilience
• deliver government initiatives to identify new water resource options, enable more efficient water use and return more water to the environment
• produce comprehensive classifications for all bathing waters, incorporate new bathing water designations in our operational activities, and ensure action plans are in place to address risk of non-compliance
• deliver the requirements of the River Basin Management Plan cycle and maximise Water Framework Directive delivery to 2027
• increase our Water Environment Improvement Programme delivery to £14.5m through partnership-working, delivering outcomes on Water Framework Directive measures
• deliver the Environment Agency elements of the Plan for Water

7.2 Flood and Coastal Erosion Risk Management Programme

In the year ahead we will:

• continue to deliver the government’s £5.6bn programme for flood protection and resilience including year 4 of our current six-year capital programme; the £200m flood and coastal innovation programme and the £25m natural flood management programme
• deliver the £100m Frequently Flooded Allowance to protect communities that have suffered repeated flooding, and the £75m Internal Drainage Boards fund to protect agricultural land and rural communities
• publish our next National Flood Risk Assessment ( NaFRA2 ) - this will provide an up to date understanding of both current and future flood risk for rivers, the sea and surface water
• develop our long-term investment plans for future flood and coastal resilience in advance of the next spending review
• complete the renewal of our commercial frameworks and establish a new charter for working collaboratively with our suppliers
• develop a strategy for improving the performance and reliability of our flood and navigation assets
• deliver on our Category 1 responder role to deliver a flood warning service under the Civil Contingencies Act (2004)

7.3 Waste and resources regulation

We will work to support the government’s ambitions for waste reduction through:

• focusing on our compliance work on poor performing waste management operators and directing resources to sites presenting a high fire risk or risk of abandonment
• increasing our emphasis on ‘upstream’ interventions, undertaking waste classification, waste acceptance and producer responsibility checks to prevent harm - such as the handling and disposal of non-permitted waste and sulphate waste as landfill and deposit for recovery sites
• directing our response to waste crime on the greatest threat, risk and harm, using best practice in risk assessment - this will mean closing high-risk illegal sites, stopping illegal waste exports and the mis-description of waste
• strengthening our intelligence-led approach and our collaboration with partners to target effort on offending and criminality in the waste sector
• our Waste Regulatory Reforms Programme to develop a new delivery model for new duties and introduce the Extended Producer Responsibility for packaging - this is worth £1.2bn per annum to the UK’s Gross Domestic Product

7.4 Regulation

We will be a confident regulator and maintain our strong performance on regulatory activities, including:

• focusing on high-risk activity, including Control of Major Accidents Hazards ( COMAH ), landfill regulation and abandoned sites, hazardous waste, agriculture compliance, oil refineries, nuclear sites, and radioactive sources to minimise adverse impacts on the environment and communities
• using our regulatory and advisory roles to support the nuclear sector’s contribution to sustainable development by delivering regulation and advice across the civil and defence nuclear lifecycles - delivering the programme to prepare for the regulation of Advanced Nuclear Technologies ( ANT ), including fusion
• ensuring we have a sustainable and class-leading permitting system
• supporting climate resilience and environmental protection and development of decarbonisation – Carbon Capture Utilisation and Storage ( CCUS ), hydrogen, decarb ready, advising government, developing regulatory approaches to innovation, implementing relevant legislation
• spatial planning – influencing strategic planning to identify opportunities for improving environmental and climate resilience. This includes working in partnership with others to protect, create and restore wildlife rich habitats and support nature recovery. Identification of environmental limitations that may shape and inform development programmes, particularly around water quality and water scarcity.
• focusing on our service to customers, delivering permit reviews, reservoir permits, Environmental Permitting Regulation ( EPR ) permits, water industry permits, digitalisation and standardisation of low-risk permits. We will adopt the new triage approach to enforcement, ensuring it is timely, intelligence-led and target effort based on threat, risk, and harm.

7.5 Organisational transformation

We will modernise our services and working environment through:

• creating a new unit in the business - the Strategy, Transformation and Assurance Directorate - to deliver ‘do it once’ services, improve our IT-enabled transformation effort, raise standards in our offer to our staff and provide better assurance of compliance across the business
• identifying and targeting key functions such as permitting that can benefit from digitalisation and service revision, through which we will deliver better customer experience and improved operational efficiency
• progressing towards our high ambitions for our staff through keeping them safe, strengthening our culture, offering a new talent scheme, greater interchange, new governance and initiatives to improve representation of staff from minority ethnic backgrounds by 1.5 percentage points
• improving our employee offer through targeted skills development, attraction and recruitment actions, and a continuous focus on how we reward our people, all guided by our People Strategy
• maintaining our performance against the Information Commissioner’s Office ( ICO ) standards for Freedom of Information and advancing plans to proactively publish more information

7.6 Efficiencies and value for money

We will improve management of our finances and value for money by:

• delivering £15m efficiencies to fulfil our Spending Review commitment, whilst maintaining performance
• reprioritising £8m of spending towards front line water quality work, which will be delivered by efficiencies
• reviewing more of our fees and charges, to ensure that the true cost of services is met by those that use them and bring our charges into line with other government bodies
• establishing a robust commercial plan to make best use of our assets to deliver greater taxpayer value and improve maintenance of our assets wherever possible
• continuing our close collaboration with the National Audit Office ( NAO ) to improve our understanding of our asset base, with a view to removing remaining accounting qualifications and holding significantly improved technical data

7.7 Providing advice to government

We will deliver on our role as the government’s adviser on pollution and environmental risks by:

• reinforcing our nuclear programme, with dedicated focus on Sizewell C nuclear power station
• continuing our programme of managing emerging threats, including work with the Health and Safety Executive on the management of per- and poly-fluoroalkyl substances ( PFAS or ‘forever chemicals’), the implementation of our Methane Plan, and further advisory work on emerging technologies
• reviewing and revising our monitoring work for further opportunities to leverage digital technology to improve the insights and evidence it provides
• advising on, influencing, and implementing planning reforms and levelling up agenda through informing changes to the town and country planning regime and accelerated Nationally Significant Infrastructure Project delivery
• providing a strategic overview role on all sources of flood risk from rivers and the sea
• driving the government’s waste reform projects in partnership with Defra , to deliver a more circular economy and reduce waste crime

8. How we will know we are succeeding

Our 2024 to 2025 priorities, targets and corporate scorecard measures.

8.1 Incident response

We will prepare for, respond to and support recovery from high-risk flooding and environmental incidents including major incidents.

Target and measure for 2024 to 2025

We will target 90% resilience in our capability to respond to incidents.

8.2 Capital programme

We will deliver the agreed capital programme for both the Environment Agency and Risk Management Authorities to better protect properties from flooding by 2027 and deliver wider environmental benefits.

We will target:

• a cumulative total of 114,000 properties better protected from flooding as part of the second programme of the Flood and Coastal Erosion Risk Management Capital Investment Programme (2021 to 2027)
• 80% on track / complete innovation actions delivered in flood and coastal resilience to adapt to a changing climate

8.3 Planning

We will influence local authority planning decisions and Nationally Significant Infrastructure Projects ( NSIPs ) to deliver good environmental outcomes.

• 97% of local authority planning decisions that we successfully influence
• 97% of Development Consent Orders ( DCOs ) for Nationally Significant Infrastructure Projects ( NSIPs ) that we successfully influence

8.4 Asset operation and maintenance

We will maintain our assets to ensure reliable operation and response.

We have a target of 94.5% of assets at required condition. The winter storms between 2023 and 2024 have had a significant impact on existing assets. While we will endeavour to repair and maintain our assets, the more likely outcome for 2024 to 2025 is 92%.

8.5 Compliance

We will ensure effective compliance with a focus on our statutory duties.

• 97% compliance with environmental permits
• reducing the number of serious environmental incidents from permitted sites, activities, and sources we regulate directly to an annual limit of 150

We will deliver the Environment Agency elements of the Plan for Water.

• conduct 4,000 water company compliance inspections
• target 90% of non-compliant water company sewage treatment works to be brought back into compliance
• target completing 4,000 agriculture outcomes and farm inspections

We will reduce the impact of regulated and illegal waste on the environment.

We will target at least 90 high-risk illegal waste sites ( IWS ). They will be ‘stopped’ which means either:

• there is subsequently no activity for a minimum of 28 days
• that site has been brought into compliance

8.8 Habitat restoration

We will deliver environmental enhancement and restoration where we have a statutory duty.

We will target creating or restoring 1,250 hectares of wildlife-rich habitat, delivering Environmental Net Gains to benefit people and wildlife.

8.9 Sustainability

We will deliver our corporate sustainability commitments to meet government targets.

• reduce our carbon emissions to 250,697 tonnes
• become a net zero organisation by 2045 to 2050

8.10 Transformation

As part of a wider transformation programme, we shall review and revise our end-to-end services and the use of digital technology to support our people to deliver.

We will target the equivalent of £15m savings in grant-in-aid and £8m savings in charges income.

8.11 People

Our people’s safety is our top priority. We also want people to be their best selves when working at the Environment Agency and strive to ensure our people reflect the diversity of the communities we serve.

• a 0.11 Lost Time Incident ( LTI ) frequency rate limit per 100,000 hours
• a rate of 50% of executive managers who are female, and 7.6% of staff from minority ethnic backgrounds

9. Our funding

The Environment Agency’s total budget for 2024 to 2025 is £2,086m. This is an increase of £125m compared to our £1,961m budget in 2023 to 2024 and includes:

• government approval to invest up to £53m to deliver the Plan for Water
• a £9m increase in water resources charges relating to Kielder Water in Northumberland (the largest man-made lake in Northern Europe)

As shown in the table, funding to deliver:

• our flood related outcomes is predominately received from government
• environment protection outcomes is predominately generated through our fees and charges

This budget has been allocated across the business to:

• maximise our ability to deliver as one organisation
• enable the delivery of our priorities set out in this business plan

We are committed to efficiencies as a public body. We will deliver £15m of efficiencies this financial year to fulfil our Spending Review commitment. We have also committed to provide an additional £8m from existing resources to fund the commitments set out in the Plan for Water. We aim to deliver these savings by efficiencies. As such a new corporate scorecard measure has been included to capture this commitment. 

Our budget will also change throughout 2024 to 2025 as we are expecting to receive £5.8m to fund water quality enforcement. Our charge income may also increase depending on the outcome of charge reviews in progress.

We are also looking to the future and will develop an over-arching funding strategy to prepare us for future years. This will include proposals such as:

• a commercial plan
• maximising cost-recovery
• work to a prioritised fees and charges programme
• gaining agreement to have greater flexibility in our funding

The aim is to enable us to be more agile and responsive to fast evolving priorities so we can deliver the expectations placed upon us.

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Cost of living help and a future made in Australia

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Addressing housing pressures

This Budget invests a further $6.2 billion in specific housing initiatives, taking the Government’s total new investment since 2022 to $32 billion.

This investment expands on initiatives already being delivered through the National Housing Accord, Housing Australia Future Fund and Social Housing Accelerator.

Supporting more homes

The Government is making available a further $1 billion to states and territories to deliver new housing – including for connecting essential services such as water, power, sewerage and roads.

This investment expands on the $500 million already committed through the Housing Support Program to support enabling infrastructure to unlock more homes.

More help for renters

A $1.9 billion investment will increase the maximum rates of Commonwealth Rent Assistance by a further 10 per cent to further alleviate rental stress.

This builds on the 15 per cent increase already made in September 2023, taking the increase to Commonwealth Rent Assistance maximum rates to over 40 per cent since May 2022 including indexation. Nearly 1 million households receiving the maximum rate of Commonwealth Rent Assistance, around one quarter of all renters, will be better off.

More housing for students

To deliver more accommodation for students and to reduce pressure on the private rental market, the Government will work with the higher education sector to develop regulations requiring universities to increase their supply of student accommodation.

More housing support for vulnerable Australians

The Budget includes funding for a new five‑year, $9.3 billion National Agreement on Social Housing and Homelessness with states and territories. This represents an increase of $423 million.

Under the agreement, the Commonwealth will double its dedicated funding for homelessness services to $400 million a year – funding that states and territories must match.

The Government is targeting the $1 billion increase to the National Housing Infrastructure Facility to better support housing for women and children experiencing domestic violence and for youth. The funding is being rebalanced to provide more up‑front grants to support states and territories and community housing providers to deliver more housing for these cohorts.

Other measures to support housing

The Government is:

• Providing $88.8 million for 20,000 new fee‑free TAFE places, including increased access to pre‑apprenticeship programs, in courses relevant to the construction sector.
• Providing an additional $1.9 billion in concessional loans to community housing providers and other charities to support delivery of new social and affordable homes under the Housing Australia Future Fund and National Housing Accord.
• Making a landmark $4 billion joint investment with the Northern Territory Government to improve conditions and address overcrowding in remote housing in the Northern Territory.
• Allowing foreign investors to purchase established Build to Rent developments with a lower foreign investment fee, conditional on the property continuing to be operated as a Build to Rent development.

Better transport for cities, regions and suburbs

Investing in infrastructure

The Government is committed to investing in the infrastructure Australia needs by providing $9.5 billion over the forward estimates, and $16.5 billion over 10 years, for projects that improve productivity, liveability, and sustainability. All while maintaining focus on ensuring the deliverability of the over $120 billion, ten‑year infrastructure investment pipeline.

For a breakdown of state-by-state infrastructure investments, refer to pages 24 and 25 of the Budget overview .

Better transport for Western Sydney

The Government is committed to unlocking the potential of Western Sydney, investing $2 billion into planning and delivering more efficient regional transport networks that will transform the way communities live and move within Western Sydney and connect people to jobs in the region. This includes:

• $1.9 billion to plan and build roads and rail
• $100 million for rapid bus infrastructure and $20 million additional funding for planning to extend the rail line from the Aerotropolis to Macarthur
• $302.6 million to enable operations for Western Sydney International (Nancy-Bird Walton) Airport

Meeting the infrastructure needs of South East Queensland

The Government is investing $2.2 billion in well‑planned infrastructure to better integrate the South East Queensland region, accommodate future growth, and support economic development. This includes:

• $1.4 billion to enhance rail connectivity between Brisbane and the Sunshine Coast
• $431.7 million for the Coomera Connector Stage 1 project and $39.4 million for the relocation of the Loganlea Station

Better connections for regional and remote communities

A further $101.9 million is committed to upgrade regional airports and remote airstrips, delivering better connections and more resilient infrastructure for communities. A further $40 million will be invested to support the roll‑out of additional community wi‑fi in remote and regional Australia.

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Restaurants, Food & Drink | Orlando-based Red Lobster files for bankruptcy…

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Things to do, restaurants, food & drink | orlando-based red lobster files for bankruptcy but will stay open.

The bankruptcy, filed in U.S. District Court in Orlando, will allow the company to continue operating after restructuring amid nearly $300 million in outstanding debt.

While Red Lobster’s headquarters will probably remain in Central Florida, San Diego-based restaurant analyst John Gordon said whether it stays in downtown Orlando and how its corporate workforce will be affected remains to be seen.

“They will look at that lease,” Gordon said Monday of the three-story space at CNL Center on South Orange Avenue. “I’m not saying there will be additional headquarters staff layoffs, though there certainly could be. But there are hundreds of suburban Orlando office parks where they could just as easy have a corporate headquarters.”

In  a news release late Sunday, the company said the plan is to “simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets.”

“This restructuring is the best path forward for Red Lobster,” said CEO Jonathan Tibus in the release. “It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.”

Tibus also said the company would be sold.

“The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests,” the CEO said.

The filing listed company assets of $1 billion to $10 billion and liabilities of $1 billion to $10 billion.

Red Lobster began as a single restaurant started by Bill Darden in Lakeland in 1968 before joining General Mills, which later spun off Orlando-based Darden Restaurants in 1995. Darden then sold Red Lobster to Golden Gate Capital for $2.1 billion in 2014.

The company shuttered as many as 80 locations last week, including at least six in Central Florida. It has about 650 restaurants. An online auction of the entire contents of some restaurants was held.

Affected Central Florida restaurants, still listed as “temporarily closed” on the company’s website early Monday,  include three in Orlando at 3552 E. Colonial Drive, 7373 W. Colonial Drive and 8003 Golden Sky Lane; in Altamonte Springs at 340 State Road 436; in Sanford at 20 Towne Center Circle; and Kissimmee at 4010 W. Vine Street.

The company’s decision last year to make its $20 endless shrimp special a permanent menu item has taken a lot of the blame for the filing, Gordon said deep-seated issues went back years.

“Yeah, they lost money with it, but it’s just one of a whole series of management problems that occurred under the Thai Union watch,” Gordon said.

Thai Union, a Thailand-based seafood company, took control of Red Lobster in 2020 with a $575 million stake but earlier this year disclosed it was shedding its shares.

Before that, the Golden Gate Capital hedge fund sold off the real estate beneath the restaurants, Gordon said.

“Practically all of the Red Lobsters had to start paying rent,” Gordon said. “And that became a negative hit to the profit-and-loss statement.”

Former CEO Kelli Valade leaving the company after less than a year in 2022 also contributed to Red Lobster’s volatility, he said.

“We all know in the industry, what that means is [that] she got there, observed the situation, and she said, ‘Wow, the circumstances here are such that I’m never going to be able to make it work. So I’m out of here.’ And they never got a full-fledged CEO in afterwards.”

The most important thing for the company, he said, is to get the word out that most of its locations are still open for business.

“A lot of people are going to see this … and say, ‘Oh my God, Red Lobster is closed everywhere.’ And that’s not the case. … The company’s intent is to make Red Lobster a slimmed-down version of itself.”

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