service process business plan

How to Write a Business Plan for a Service Business

Noah Parsons

10 min. read

Updated November 13, 2023

Free Download:  Sample Administrative Services Business Plan Templates

If you’re starting a business that sells a service, writing a business plan is one of the first steps you need to take. Whether you are starting a consulting business, a car repair shop, or a construction firm, a business plan will help you figure out your strategy, develop your marketing plan and figure out the all-important financial forecasts so that you can be successful.

Writing a business plan can seem complicated at first. There are multiple topics you have to cover and you want to impress your readers with a complete plan. Whether it’s a loan officer reading your business plan or a potential business partner, you need to make sure you get your plan right.

That’s why we put this guide together. Business planning doesn’t have to be intimidating and we’ll guide you through the process of pulling everything together for your new service business.

• What is a service business?

A service business typically focuses on selling services to customers instead of products. For example, a consultant or lawyer typically sells their time and expertise to customers. A repair business typically is selling the service of fixing broken equipment and appliances. Event planners are selling the service of planning and managing events such as weddings and corporate retreats. 

Service businesses don’t just have to sell services. Many service businesses sell a mix of products and services. Take a car repair shop, for example. They’ll sell the service of repairing your car in addition to the parts required to get your car serviced. Even though the repair shop sells parts, it’s different from an auto parts store that only sells parts and doesn’t sell any repair services. 

• Why you should write a business plan for a service business

It’s tempting to just dive right in and start building your business. A business plan can seem like a waste of time and it’s certainly more fun to start working on things like logos, business cards, and finding office space. But, it’s important to remember that a business plan is a vital step in the process that will prevent you from wasting precious time and money as you get your business up and running. 

Taking a little time to plan now can save you from  making critical mistakes  and prevent you from wasting thousands of dollars. Even though it may not be as “fun”, it’s worth every minute. Here’s why you’ll want to plan:

1. Clearly define your offering

Although you may have a good idea in your head for the services you’ll be offering, it’s important to write down exactly what you plan to offer to your customers and what you plan to charge. Especially for service businesses where you may be selling your time, it can be tempting to take on any job. That can lead to distractions and lead you away from your core business. You also want to ensure that business partners are on the same page as you and that you agree on the services you are providing, what you’re going to charge, and how you are going to deliver those services.

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2. Create a marketing plan

A clear  marketing plan  is crucial for getting your service business up and running. You’ll need to know not only how you plan on landing your first customers, but also your hundredth customer. Taking the time to describe your ideal customer and craft a marketing plan to reach them in a  smart and cost-effective way  is the key to a business that can grow efficiently over time.

3. Know your numbers

Before you start any business, understanding what it’s going to take to make money is a crucial first step. As you create a sales forecast and expense budget, you’ll be able to see what it will take to become profitable. Understanding how much it’s going to  cost to start your business  is also a critical number to know. For some service businesses, startup costs can be high. Looking back at our car repair service business example, startup costs may be significant. This business will need to purchase a workspace, tools, and other equipment before it can offer any services. In contrast, a consulting business may not have many startup costs. You may be able to simply  work from home  and offer your  services online , avoiding the need for any physical overhead costs. Regardless of whether your startup costs are low or high, understanding what level of sales you’ll need to make money is something a business plan will tell you.

4. Build your business strategy

A business plan helps you outline  your business strategy . Knowing your strategy before you start helps you focus on building your business the right way from the beginning. Figuring out your strategy while you’re trying to build your business is somewhat like building an airplane while you’re headed down the runway. It’s potentially possible but very difficult to do. 

Your business plan will force you to think through and answer the questions you need to answer to have a successful business.

• How is a business plan for a service business different from a product business plan?

Although business plans for service businesses are fairly similar to plans for product businesses, there are a few key differences.

Often, service businesses have fairly low  cost of goods sold . This is how much it costs you in parts, products, or other tangible items to make a sale. Most service businesses have low costs to deliver the service and therefore have fairly high-profit margins.  Software-as-a-service  businesses are a perfect example of this because the incremental cost of a new customer is so low.

Service businesses often have little or no inventory as they are focused on selling their service, not a product. That said, this isn’t always the case. Any kind of repair service usually has to have replacement parts on hand. But, lawyers and accountants almost never have any kind of physical inventory.

For some service businesses, overhead expenses can also be very low. Many service businesses don’t need storefronts, warehouses, or other expensive real estate.

• What you should include in your business plan

A good business plan includes six key chapters. Following this  business plan outline  will ensure that you have a complete and effective business plan.

1. Executive Summary

Every business plan should have a short  executive summary . Your executive summary is an overview of your entire business and a preview of the rest of your plan. Ideally, your executive summary can be used as a stand-alone document that you can use to  introduce your business  to investors who don’t have the time to read a complete business plan. Your executive summary should describe the services that you are offering, who your target market is, and provide a snapshot of your sales goals and profit projections for the coming year. If you’re  raising money  to launch your business, be sure to include how much money you need to get the business launched. Write your executive summary last, after you’ve written the rest of your plan. Because it’s just a brief summary – two or three pages at most – writing it last will ensure that you cover all the key points in the rest of your plan.

2. Problem and Solution

The first major chapter of your business plan will cover the  problem that you solve  for your clients and describe the services that you provide. If you’re starting a landscaping service, the problem you’re solving is your customers’ desire for a well maintained, beautiful lawn and garden when they don’t have the time to do it themselves. A headhunting firm helps businesses find and recruit new employees without having to have a large HR department. When you describe the services you provide, make sure to describe your pricing and how you stack up against the competition. What makes your services better than other businesses that provide similar services? What sets you apart?

3. Target Market

The  target market  chapter of your business plan focuses on the customers that you are selling to. A good business plan describes your business’s ideal customer very specifically. No business sells to “everyone”. Instead, good businesses know the type of customer that they are after and where to find them. For example, a financial planning service business might target millennials that work in technology companies who like to communicate mostly online. When you describe your target market, make sure to  indicate how large the market is . You’ll want to make sure that there are enough potential customers for your services out there so that you can grow your business.

4. Marketing and Sales

Once you’ve defined the problem you are solving for people, how you solve that problem for them and described exactly who your customer is, you’ll have a great platform for creating a  marketing and sales plan . With your target market information, you should know where and how to reach your ideal customer so that you can come up with a marketing plan to reach them. If your business is local, focusing on local advertising and social media groups might be a good idea. If your services are expensive, you’ll also want to describe your sales plan since customers most likely won’t just sign up for your services immediately after hearing about you. You’ll most likely need to deliver information about your services, create bids, and have a follow-up strategy for closing deals. Use this chapter of your business plan to create your marketing and sales roadmap so that you can start executing on your marketing plan when your business is up and running and have sales processes in place so you make sure that you maximize your marketing efforts.

5. Company & Team

Your idea is surprisingly not the most important part of your business. It’s actually the  people that build the business  and run it that are the most important. Even the best idea that’s poorly executed is likely to fail, so it’s critical that you assemble the right people to make your business a success. In this chapter of your business plan, describe who is behind the business and why this team is the right team to build it. Investors often focus more on the team than the idea because they assume that a smart and motivated team will adjust and refine an idea to make it successful, even if the first iteration isn’t perfect.

6. Financial Plan

Finally, your business plan needs a  financial plan . This plan should include:

• Sales forecast
• Profit and Loss
• Cash Flow Forecast
• Balance Sheet

If you’re starting a subscription service, include a forecast for subscriptions, renewals, and cancellations — otherwise known as “churn”. Your Profit and Loss statement will show your sales and expenses so that you can calculate your predicted profits. The Cash Flow Forecast will predict how cash moves in and out of your business and will help you identify  potential cash flow problems  that may occur in the future. The Balance Sheet will detail the assets and liabilities that your business is predicted to have over time.

• Free business plan examples & templates

It might be helpful to explore how other service-based businesses have written their business plans. Check out our  free library of sample plans and templates for service businesses . You can download any of these documents in Word form and get some structure for your own plan.

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

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.

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What is a Service Blueprint: Brief Definition and Examples

Over the last few decades, service blueprints have evolved as a useful method to address the many challenges in service design and innovation. It was first introduced by Lynn Shostack, a banking executive in 1982 in the Harvard Business Review.

In this guide, we’ll be taking a deep dive into the topic of service blueprints; at the end of it, you’ll know what is a service blueprint, how to create one as well as how to read one. You can start blueprinting your own service process right away with the templates provided.

What is a Service Blueprint

Key elements of the service blueprint, benefits of a service blueprint, applications of a service blueprint, how to read the service blueprint, how to create a service blueprint using creately, service blueprint examples.

• Ready to Create Your Own Service Blueprint?

The service blueprint is a diagram/ map that visualizes a service offering accurately. It provides a clear picture of the service process to those who are involved in service production as well as service consumption.  

Its purpose is to help understand the service delivery process from the customers’ perspective in order to assist the service design and improvement processes. It highlights the complexity and divergence of the service process and helps to upgrade the efficiency and effectiveness in customer service.

They are particularly used during the design stage of service development to break a service down to its logical components such as points of customer contacts, physical evidence, etc. and analyze the steps in the service process in detail.  

They are usually represented with a diagram with swimlanes which represent the different categories of the service blueprint.

Service Blueprint vs. Customer Journey Map

Customer journey map and service blueprints are two complementary methods used in service/ product design.

Customer journey maps visualize the customer experience across different touchpoints along with what they are doing, thinking, and feeling. It focuses more on the surface customer experience and reveals less service process details.

On the other hand, service blueprints offer a detailed look at the service delivery process across the different touchpoints, including the onstage and backstage contact employee actions.

So the service blueprint offers more information on the internal processes and support systems that deliver the service to the customers more than the experience of the customer. The blueprint uses the customer journey as a starting point.

Effectively visualize your services to gain a more holistic perspective and better understand all of the moving parts with Creately.

The service blueprint distinguishes between onstage and backstage employee activities which are represented with its key components.

Customer actions: this component is central to the creation of the service blueprint and therefore is laid out first. It includes the steps, actions, choices, and interactions the customer performs while evaluating, purchasing or using the service delivery process. These actions are displayed chronologically across the top of the blueprint.

Onstage/ visible contact employee actions: this component appears on the diagram after customer actions, separated by the line of interaction. These actions include what frontline contact employees do when they encounter customers face-to-face.

Backstage/ invisible contact employee actions: this refers to the backstage or behind the scene actions taken by contact employees that are not visible to the customer. They include non-visible interactions with the customer such as telephone calls and other activities backstage contact employees carry out to support the onstage activities.

Support processes: this includes all the actions, interactions, internal services carried out by individuals or units (not contact employees) within the company to support contact employees deliver the service. They are not visible to the customers.

Physical evidence: this comes at the top of the diagram and represents the physical evidence of the service. They are typically listed above each point of contact. For example, the physical evidence of a face-to-face meeting can be listed as office decor.

Lines: Each component of the service blueprint is separated by a line. First comes the line of interaction which represents direct interaction between the customer and the organization; every time the line of interaction is crossed by a link from the customer to the contact employee, a moment of truth occurs. During these moments of truths, the customer judges the quality of the service and makes decisions about future purchases.

Then comes the line of visibility. All components that come above this line are visible to the customer while the ones that come below it are invisible.

The last is the internal line of interaction. This separates contact employee activities from other service support activities and people. Vertical lines cutting across the line of internal interaction represent internal service encounters.

Arrows: These represent the relationships/ dependencies. A single arrow indicates a one-way exchange, and a double arrow indicates the need for agreement from both parties or codependence.

Some secondary elements you can include in a service blueprint are,

Time: If time is an essential part of your service, you can use a timeline to represent the estimated time duration for each step of the process.

Emotions: Similar to the way a customer journey map reveals the emotions customers go through during each step of their journey, you can indicate the various emotional states your employees are in during each step of the service delivery process.

Metrics: You can also include success metrics in your service blueprint to track the progress toward your goals.  

The service blueprint helps organizations to effectively understand their services – the resources and the underlying processes. There are several other benefits of service blueprints

• Streamlined service delivery: A service blueprint provides a clear overview of the different processes, activities, and touchpoints involved in delivering a service. It helps organizations identify redundancies, bottlenecks, and areas of inefficiency, allowing for process optimization and streamlining. A service blueprint also helps check the process’s logical flow and evaluate its effectiveness and productivity.
• Enhanced customer experience: Service blueprints allow organizations to identify pain points and areas for improvement in the customer journey. It helps to understand customer needs and wants and the impact of a failed delivery service. By mapping out the entire service process, organizations can identify moments of truth, optimize interactions, and design better customer experiences.
• Improved service design and innovation: By visualizing the service process, organizations can spot opportunities for innovation and new service offerings. Using a service blueprint, you can isolate service systems that are slow, repetitive, overly complex, waste resources and are toxic to the customer. Service blueprints enable service designers to identify areas where technology, automation, or new approaches can be implemented to enhance the service and provide additional value to customers.
• Measurement and performance evaluation: Service blueprints provide a framework for measuring service performance and evaluating key metrics at each step of the process. By tracking and analyzing data related to service delivery, organizations can identify areas for improvement, set benchmarks, and monitor progress over time. A service blueprint helps with measuring the cost of service delivery and identifying opportunities for improving the service delivery system.
• Cross-functional collaboration: Service blueprints involve multiple stakeholders and departments, facilitating team collaboration and communication. It helps break down silos and fosters a shared understanding of the service process, allowing for coordinated efforts in delivering an exceptional service experience. You can also use them to understand cross-functional relationships in your organization and align front-stage and back-stage actions.
• Training and employee empowerment: Service blueprints can be used as training tools for employees, providing a step-by-step guide to service delivery. They help employees understand their roles and responsibilities and how their actions impact the service experience. This empowers employees to make informed decisions and deliver consistent, high-quality service.
• Service recovery and problem-solving: When service failures or issues occur, service blueprints serve as a valuable tool for identifying the root causes and developing solutions. By pinpointing the specific steps and touchpoints where problems arise, organizations can implement effective service recovery strategies and prevent similar issues in the future.

Service blueprints have various applications across industries and sectors. Here are some common applications of service blueprints,

• Service Design: Service blueprints are used to understand the customer journey, identify pain points, and design customer-centric experiences.
• Customer Experience Management: Service blueprints help manage and improve customer experiences by aligning processes, policies, and resources to meet customer expectations.
• Process Optimization: Service blueprints identify inefficiencies, bottlenecks, and redundant activities, improving efficiency, reducing costs, and enhancing service quality.
• Service Innovation: Service blueprints act as a foundation for identifying opportunities and implementing innovative solutions to enhance the service experience.
• Employee Training and Onboarding: Service blueprints are used as training tools to help employees understand their roles, responsibilities and how their actions contribute to the overall service experience.
• Service Recovery: Service blueprints assist in analyzing service failures, identifying root causes, and developing effective strategies for service recovery.
• Cross-functional Collaboration: Service blueprints promote collaboration and communication among departments by providing a shared understanding of the service process and interdependencies.
• Performance Measurement and Evaluation: Service blueprints provide a framework for measuring and evaluating service performance, allowing organizations to identify areas for improvement, set benchmarks, and monitor progress.

A service blueprint can be read in multiple ways. In this section, we will show you how to read and understand them for different purposes.

To understand the customers’ view of the process or of their experience; read the service blueprint from left to right while tracking the elements in the customer action category. You can understand the view of the customer by focusing on how they initiate the service, the choices they make, how involved they are in creating the service, the physical evidence of the service from their point of view and whether the evidence is consistent with the strategy and positioning of the evidence.

To understand the role of the contact employees; read the diagram horizontally focusing on the activities that are directly above and below the line of visibility. Here you can look into how effective and efficient the process is, who interacts with the customer and how often they do so and whether there is one or several people to deal with a customer.

To understand how the various elements of the service process are integrated; Here you need to analyze the blueprint vertically. This analysis will help you identify which employees and which tasks are essential to effectively deliver the service to customers. Focus on what actions are performed backstage to assist the critical customer interaction points, what the supporting actions are, and how the handoffs between employees are taking place.

To redesign the service process; Here you can analyze the service blueprint as a whole. By doing so you can understand its complexity, how it can be changed and how changes in the customer’s point of view may affect the contact employee actions and internal processes. You can also use the blueprint to evaluate inefficiencies and failure points and identify opportunities for improvement and redesign.

The process of building a service blueprint itself has many benefits. It’ll help develop a shared vision of the service process among everyone involved, identify complexities of the service that were never apparent and understand the roles and responsibilities of the task owners.

The development of the service blueprint requires a cross-functional team consisting of members from marketing, operations, HR, and in some cases, even customers.

You can simplify the process of creating a service blueprint by using an online diagramming tool like Creately. It enables you and your team to work on the same canvas with infinite space in real-time.

And using comments and discussion threads you can monitor feedback from stakeholders. There are many pre-made templates as well, and you can use them right away to start your project.

Step 1: Identify the service process to be blueprinted

Whether it is a main process or sub-process, it’s important to have identified what it is beforehand. Once you have determined the underlying purpose for creating the service blueprint, you can identify which process to start with. Focus on blueprinting one process at a time.

Gather everyone on your team to the Creately platform to brainstorm and identify the service process. Use Creately’s integrations with Microsoft Teams to conduct online meetings seamlessly. Track the participation of the team with multi-cursors for any number of participants.

Step 2: Identify the customer segment

Different customer segments may have different needs and requirements, therefore your service may change from segment to segment. If your service process varies across different customer segments you cater to, then it’s important to blueprint these processes separately.

Dedicate the second step to identifying the particular customer segment the identified service process caters to. Once that’s specified, you need to get an idea about the interactions of the customers during each step of the process. For this you can use Creately’s pre-made templates to get a quick start.

A good way to understand the customer interactions or the choices and the actions they perform across the various service touchpoints is the customer journey map. Since the service blueprint is primarily about the employee actions, your customer journey map for this step doesn’t have to be a comprehensive one – one that highlights the touchpoints and the parallel actions would suffice.

However, it is important to thoroughly understand who the customer is, which may require considerable research.

If you already have customer profiles for different segments, you can use them at this point; if not consider creating one for they may come in handy when you are blueprinting service processes anytime.

This will help you get an idea about the process from the point of view of the customer. And it will also help you identify and avoid process steps that have no customer impact.

Step 3: Map onstage/ backstage contact employee actions

This step starts with mapping the service process from the point of view of the contact employee both frontstage and backstage. You can question operations employees to gather the relevant information on the activities they perform in full view of the customer and which are carried out behind the scenes.

If technology is involved in delivering the service, you can map the actions on the technology interface.

Ask your team members to provide their input. Use sticky notes, shapes, notes and data panel to note down all information and to start sketching out the service blueprint.

Step 4: Link contact activities to needed support functions

Map the support processes the employees rely on to carry out the actions you identified above the line of interaction. These activities may involve employees from different departments of the organization, even those who are don’t directly interact with customers.

Once the support functions are identified, link the contact activities to them. This step will help you understand the direct and indirect impact of internal actions on the customers.

Use the dynamic connectors to link activities. You can also color code and customize the connectors.

Step 5: Add physical evidence of service at each customer action step

Finally, add the physical evidence to the map. This highlights what the customer sees or receives as tangible evidence of the service during each step of their experience.

Step 6: Fine-tune and share

In the final step of creating a service blueprint, you can add additional elements such as time indicators, metrics, or employee emotions to refine your diagram even further.

Then share it across the organization to communicate your take on how the internal organizational processes work.

With Creately, you can simply do this by exporting your diagrams in PDF, SVG, PNG, JPEG formats, which you can then publish or embed in your internal wikis, websites or take printouts.

You can also share it through Slack where anyone in the channel can easily preview the blueprint without having to log in to Creately first.  

Or you can use the Creately Google Drive integration to create, share, store and manage permissions to your service blueprints right within the application.  

If you rely on Confluence for project management, you may also find the Creately Plugin for Confluence useful as it works natively inside your on-premise Confluence server and lets you add visuals and diagrams as attachments to your pages and posts.

Restaurant Service Blueprint

Hospital Service Blueprint

Hotel Service Blueprint

Movie Theater Service Blueprint

Commonwealth Bank Service Blueprint

Finance Industy Service Blueprint

New Service Blueprint for a Coffee Shop

Example Uber Service Blueprint

Ready to Create Your Own Service Blueprint?  

As the name suggests, a service blueprint offers a blueprint of your service process. It simplifies the task of mapping out everything from each step of the process to the different roles in it, making it easier to design a new service delivery system or improve an existing one. This guide explains how to do this in detail.

Got anything to add? Let us know in the comments section below.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

FAQs About Service Blueprints

While service blueprints are valuable tools, there are a few limitations and challenges to consider.

• It can be challenging to capture the complexity and variability of the service process accurately.
• Service blueprints may not fully capture emotional or intangible aspects of the customer experience.
• Creating and maintaining service blueprints require collaboration among various stakeholders, which can be challenging in organizations with siloed departments or limited resources.

Organizations should follow a few key steps to effectively implement and maintain service blueprints.

• Firstly, identify the scope and objectives of the blueprint.
• Involve relevant stakeholders from different departments to ensure a comprehensive understanding of the service process.
• Collect and analyze data on customer interactions and experiences to inform the blueprint.
• Regularly review and update the blueprint to align with service offerings or customer expectations changes.
• Finally, communicate the blueprint to all relevant employees to ensure a shared understanding.

Here are some best practices for creating impactful service blueprints:

• Involve cross-functional teams to gain diverse perspectives and insights.
• Engage with customers through research methods like interviews, observations, and surveys to understand their needs and expectations.
• Use clear visual representations, such as diagrams or flowcharts, to make the blueprint easy to understand.
• Include relevant details in each step, such as customer actions, employee actions, and support processes.
• Pay attention to touchpoints where customer interactions occur, and analyze the emotions and expectations associated with those touchpoints.
• Iterate and refine the blueprint based on feedback and data from real-world service experiences.
• Regularly review and update the blueprint to ensure its accuracy and relevance.

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

Service Business Plan: Everything You Need to Know

A service business plan guides you through the complete operations of your service business. 3 min read updated on February 01, 2023

A service business plan guides you through the complete operations of your service business. It includes everything from service description through setup, marketing, management, and financial plans for your business.

According to a recent survey, less than 25 percent of business owners created a business plan for their new business. The topmost reason surveyed business owners gave for not having a business plan was that they didn't know how to create it.

Creating a Business Plan: An Opportunity in Itself

In the United States, more than half-a-million new businesses are set up every year. These new businesses create an enormous opportunity to start a service company to create business plans for new business owners. You can market your services using one or more of the following methods:

• Networking through business associations and meetings.
• Obtaining a list of applicants who have applied for a new business license.
• Partnering with business training schools to reach out to their students.

Benefits of Having a Business Plan

A business plan offers the following benefits among others:

• It gives you an opportunity to think through the whole process of your business.
• You can discover if there are any weaknesses in your ideas, identify the opportunities you might have missed earlier, and make a better plan to deal with potential challenges.
• A good business plan can help you get funds for your business by convincing investors or lenders.
• A business plan gives you a pathway to profit. A path with clear goals and actions helps you run your business smoothly.
• Others can judge your success potential on the basis of your business plan.
• You can use your business plan as a communication tool to orient your sales team, vendors, and others to your business goals and operations.
• A business plan helps you become a skillful manager. It makes you think about your competition, promotion, and advantageous situations. Over a period, it increases your ability to make adjustments.

What Does a Business Plan Include?

Your business plan should not be longer than 30 or 40 pages. It usually includes the following sections:

• Executive summary
• Business or company description
• Description about your products or services
• Marketing plan
• Operational Plan
• Business management and organization
• Setup expenses and funding
• Financial plan
• Refining your plan: This section provides for ways to modify your plan for certain specific purposes (for instance, for applying for a bank loan) or for certain industries (e.g., for retail).

Questions to Ask Yourself

To develop an effective business plan, ask yourself the following questions:

• What is the nature of your business?
• What services do you provide?
• Where is your market?
• Who are the buyers of your services?
• Who are your competitors?
• What will be your sales strategy ?
• How will you merchandise?
• How much money will you need to operate your business?
• How will you manage your work?
• How will you control the operations?
• When should you revise your plan?
• Where can you get help?

You should answer these questions yourself as you sit down to develop your service business plan.

Writing an Effective Business Plan: Products and Services

The Products and Services section should clearly describe your products and services. Based on the type of business, this section of your business plan can be long or short.

If you are into a product-focused business, you may want to describe your product in more detail. If you sell a product that is readily available in the market, you may want to focus more on your core strength (for example, competitive pricing) rather than the product itself. However, if you are producing a new commodity, it may be more important to explain the product and its uses thoroughly.

Avoid getting too detailed or technical. Keep it simple and avoid using industry jargons. You can list out the trademarks, patents, and copyrights you have obtained or applied for.

You should answer the following questions while writing the products and services section:

• Are your products in the development stage or they are already available on the market?
• When will you bring the new products to the market?
• How are your products different?
• How will pricing affect your profit margin?
• How will you purchase or manufacture the products?

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

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

• Sample of a Good Business Plan
• Creating a Business Plan
• Business Plan for Existing Company
• LLC Business Plan Template
• Do I Need a Business Plan
• Details of a Business Plan
• Business Plan for New Company
• Parts of Business Plan and Definition
• Purpose of Business Plan Sample: Everything You Need To Know
• Business Plan Contents Page

Table of contents

How to make effective service blueprints

How to make a service blueprint — with examples.

Imagine it’s your first day at a new job. A request comes in from a customer asking for your company’s product or service. It should be easy enough to authorize what they’ve asked for. But as you dig into the tools and processes you need to work with, reality hits: to finish a single task, it turns out you need to navigate through several types of systems and at least half a dozen different departments.

Before you know it, your day-to-day tasks become confusing, slow, and filled with unnecessary details. Service blueprints can help your team map a way forward if you find yourself here. Their purpose? To shine a light on hidden weak spots in your business operations and help you solve them.

How do you create one? Keep reading to learn more about service blueprinting.

What is a service blueprint?

A service blueprint is a tool that helps teams understand how the customer sees or experiences a business’s service process. It’s a diagram that visualizes relationships between people, processes, and physical and digital touchpoints tied to a specific customer journey.

Think of a service blueprint like a treasure map. Some golden business opportunities may be hidden – even in plain sight. By creating a map, you’ll discover a path to achieving business goals by solving real needs, removing redundancies and silos, or improving an employee’s experience. Service blueprints are designed to reveal the multi-layered nature of how lots of different types of people and technologies either work together or – in some cases – don’t in a business setting.

Wondering when you’d use a service blueprint? For example, with a hotel, you might map out the entire service experience of your check-in process.

View this template in Miro

Every service blueprint, maps out:

The step-by-step of a specific customer journey

The channel-based touchpoints, one by one.

The backstage processes, across different stakeholders and actions.

You’ll know a service blueprint is doing its job when it creates a shared understanding in cross-functional teams who develop products and services for their customers.

When to make a service blueprint

A service blueprint is a useful tool for teams to create together. But when should you make one? Here are the most popular use cases for a service blueprint:

When many departments contribute to a single customer service experience.

When a company would like to check whether its key processes are sufficiently human-centered.

When a service improvement is needed to improve the customer experience.

When a service is changing or needs to be re-designed.

When an organization is transitioning from a high-touch service to a low-touch service (e.g., when you want to design a new cost-effective model with lower audience volume).

Service blueprint benefits

Service blueprints can be a time-consuming and expensive process, but when planned out, they can transform your relationship with your customers. It can also act as a way to bring people and teams across your entire organization together.

“It's a strategic tool. It's also a collective empathy tool.”

“It’s a strategic tool. It’s also a collective empathy tool,” says Kimberly Richards, a senior service designer in the Customer Service Department of the New South Wales Government. “It's a tool that does a lot of things, not just mapping out an organization or what technology is being used,” Richards adds. “I also use it to create alignment and understanding.”

Even if you feel daunted by the task that lies ahead of you, service blueprints can offer these key benefits to your team:

Reminds employees how important it is to have a customer-focused point of view. Connects the ‘this is what I do’ employee mindset to part of a much larger process (‘how what I do impacts everyone around me’)

Establishes opportunities for continuous improvement. Map-base diagrams can point out weaknesses or failures that can be the basis of a process to be refined

Informs your service design decisions. Creates points of shared interactions between employees and customers, to show where the customer experiences value

Encourages a rational approach to service design. Visibility-based mapping means common sense decisions can be made about what customers should see and how employees will interact with customers

Helps you assess how much the business has invested in each process or touchpoint. By seeing which processes create duplicate services, teams can begin to map out where revenue comes from, and suggest efficiencies and cost-saving measures

Offers a rationale to external or internal marketing teams you’ve hired. An external ad agency or the organization’s in-house marketing team can use a service map to identify what they key messages are to be communicated to customers, and keep their language aligned for a consistent experience

Enables managers and frontline workers to better communicate to improve the customer experience. Improving the quality of service can be a shared responsibility as employees communicate their experiences, and managers find and support opportunities for improvement across channels

How to create your own

Service blueprints come in all sorts of shapes and sizes. The blueprints can be quick sketches or incredibly detailed and heavily illustrated visual representations, depending on if they’re being used as an internal tool for shared understanding, or an external tool for leadership buy-in.

To get started, create your canvas using a template, and learn the important elements of a service blueprint.

The elements of a service blueprint

Here are four puzzle pieces you need to have when creating a service blueprint.

The customer’s actions : If you’ve already made a customer journey map, you can extract the steps, choices, activities and interactions a customer may go through to reach their goals.

Frontstage actions : These actions happen in front of the customer. They are usually either human-to-human (for example, a customer interacting with an employee at a cash register) or human-to-computer (for example, a customer dealing with an ATM transaction) interactions.

Backstage actions : Behind-the-scenes activities to support frontstage activities, which can either be carried by a backstage employee (a head chef in the kitchen) or a frontstage employee who completes a task not visible to the customer (printing out a bill before bringing it to the table).

Support processes : These are a series of steps and interactions that support employees in delivering a service to their customers.

Physical evidence : This is the proof that the interaction actually happened. Examples can include the product itself, receipts as proof of purchase, physical storefronts, or websites.

Service blueprints also tend to have three key lines:

The line of interaction : direct interactions between the customer and the organization.

The line of visibility : separates what’s visible and invisible to the customer – everything visible is above the line; everything backstage is below the line.

The line of internal interaction : separates employees who have direct customer contact with those who don’t directly support customer interactions.

Depending on your context and business goals of the organization you’re blueprinting for, you might also add:

Timing : if you’re offering a time-based service, you should keep track of how long each action takes

Rules and regulations : this is anything that dictates – by law – what can and can’t be changed, as teams look to optimize the customer experience

Emotion : by understanding how employees and customers are feeling throughout the process, you can start to identify pain points

Metrics : if buy-in is your ultimate goal, you’ll need these. Collect any data and visually represent how time and money is wasted due to miscommunications or other operational inefficiencies.

It is easier to reach a shared understanding and achieve a smooth service process when working in collaboration. Different departments can get to know each other’s responsibilities and challenges and see how they influence each other’s deliverables. Service blueprints made in collaboration can help the service provider teams create not only a service roadmap, but also an aligned action plan for each department involved in the service process.

Tips for service blueprinting

If you’re blueprinting a complex organization or your work has a global impact, Kimberly Richards recommends these tips.

1. Identify how you’d like to use the blueprint—and who it’s for.

“Ultimately, no one wants to create artifacts that don't get used,” Richards says. “If a team is committing to making a blueprint, we’re doing it to make the lives of the employees in an organization easier. As a result of us making this map, they shouldn’t be relying on infinite folders and share drives to make sense of where they are. The aim is to make their working life as quick and easy as possible.”

As workplaces and organizations are figuring out how to keep operating in the new world order, service blueprints can be useful to visualize how the current state of things is different to the past. For example, most offices were not designed to accommodate a pandemic. And it’s likely that most frontline workers are adapting to hyperawareness around increased hygiene, health and safety standards to keep both themselves, and their customers, safe.

For a business owner audience, service blueprints can help...

Figure out what processes and actions are actually needed when you pivot to serving customers in new ways quickly – for example, curbside pick-up or weekly home delivery services across several neighborhoods

Create a phase-based approach for a gradual reopening: after the initial phase, what does phase two, three, four, and so on, look like as restrictions ease or come into place again?

Walk-through several scenarios to prevent the less ideal outcome – for example, reducing capacity in limited space, or managing foot traffic during opening hours

For a frontline worker audience, service blueprints can help...

Create alignment between customer expectations and employee standards – for example, measuring how long it takes to wipe down and sanitize a table service between each customer interaction.

For a leadership audience, blueprints can help...

Executive-level leadership to visualize how their business operations and customer experience are changing. New safety measures and precautionary procedures add time to the overall customer experience, so these new realities need to be apparent across the organization.

2. Make scrappy versions to get buy-in for larger ones

Demonstrate the value of blueprints to your organization by starting small. “Once people see what it is, and understand that’s what a blueprint looks like,” Richards says, “you can start to get buy-in.”

Try producing small multiple blueprints that can be joined together into a longer on later. This can help you identify that some processes – channels such as onboarding and off-boarding – will never meet or interact.

2. Blueprint collaboratively

Blueprints are best made collectively. “In my role, I’m often interrogating the group about the whole sequence of events in chronological order,” says Richards. Groups are important so that you can gain understanding of customer flows, and also identify knowledge gaps between every department of an organization. Make sure you:

Have representatives from across the whole organization – from engineers through to directors of specific functions – who speak to their part of the operational puzzle.

Interrogate every step of a process at every level: for example, what does this step look like for an engineer? For a customer service representative? For an executive?

Ask everyone in the room “What’s your opinion of how that affects the customer?”

Document when people agree across the board, and when there’s alignment.

Retarget or recruit customers, or research, or re-identify someone else in the organization who has the information you need when inconsistency or misunderstandings come up.

Be current-state focused, rather than solutions-focused

Service blueprints can encourage people to time travel decades ahead of where they’re supposed to be, but more importantly, it’s a tool to understand where a company is right now. People want to go into solution mode. But really, it's all about capturing the current state. A blueprint is a snapshot in time of your organization across all levels. You can't move forward without an agreement. You need to get aligned to create holistic change.”

Realistically, a customer’s end-to-end journey with an organization can last for over a couple of decades. As such, Richards recommends kicking off a blueprinting project with a scoping session or a workshop to figure out what the start point and end point of the blueprint is.

Service blueprint examples

Now that you’ve learned about how service blueprints work, why not try making your own? Service blueprints can be adapted for any kind of service-based industry, including restaurants, hotels, banks, and hospitals. Here are a few simple examples to get you started.

1. Restaurant service blueprint

In a restaurant environment, you may have different processes for takeaway meals or a dining-in experience. Either way, a consistent, frictionless experience is key for patrons.

2. Bank service blueprint

In banking, customers are increasingly interacting with their financial services provider via non-physical touchpoints such as internet banking apps or on the phone.

3. Hospital service blueprint

In a hospital, customers may be experiencing high levels of stress or uncertainty, which means that every step or process they encounter has to be designed for ease of service, clarity and reassurance.

Try it yourself

Now that you’ve seen examples of service blueprints for different industries, try creating one yourself! Use this  free service blueprint template , or check out these two templates made by real teams in Miro.

Looking to read more about remote collaboration? Start at  Chapter 1  of our guide!

Nathania Gilson, Contributing Writer

Nathania Gilson is a writer and editor based in Melbourne. She's interested in interactive storytelling, building products that can change the way audiences think and interact for the better, and developing tools for social good and public awareness.

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Products & Services Section in a Business Plan (+ Examples)

• March 21, 2024
• Business Plan , How to Write

In this blog post, we’ll guide you through writing the products and services section of your business plan. We’ll cover how to describe what you’re selling and why it’s important in your business plan.

Whether you’re launching a new startup or creating a business plan for an existing business, this section is crucial for showing the value you bring to customers. Let’s get started!

Why do we include them in a business plan?

The products and services section of a business plan is more than just a list of what a company sells; it’s a vital narrative that tells the story of the business’s core offerings and their significance to the market.

This section is paramount for readers (especially potential investors) to grasp the essence of what the business is about, the unique problems it solves, or the specific needs it addresses.

A meticulously crafted products and services segment does much more than describe offerings. Indeed, it lays the groundwork for comprehensive marketing strategies , informs operational planning, and financial projections.

Moreover, understanding the business’s offerings in depth enables stakeholders to envision the company’s value proposition and competitive edge.

Where should you include them?

In a business plan, the Products and Services section is typically included within the business overview section.

This allows you to first introduce the business model and what it offers to customers. Only after this you can provide more details of the products and services.

The Products and Services section should clearly detail what you are selling, highlight the unique value proposition . It should also ideally explain how it meets the needs of your target market if it isn’t obvious. T

What to include: 2 Examples

Begin with a clear, engaging description of each product or service you offer. For services, describe the process, customer experience, and outcome. For products, discuss the materials, technology, and any unique features.

Services example: a Cryotherapy business plan

Products example: a Brewery business plan

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

with Fundera by NerdWallet

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

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

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

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

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

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

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How to Write the Business Plan Products and Services Section

Get tips on writing the products and services part of your business plan

• The Products and Services Section
• What to Include
• Tips on Writing the Section

The products and services section of your business plan is more than just a list of what your business is going to provide. This section of your business plan should include details about how you'll price products and services, how you'll fulfill orders, and other details that investors need to hear before you can get funding . Learn more below.

Key Takeaways

• Business plans include details about products and services you'll offer, including exactly how you plan to market, sell, and deliver on customer orders.
• The best business plans are clear and concise.
• The products and services section of your plan should show off why your product or service is needed.
• The products and services section should also convey the expertise and experience you have to succeed.

Why You Need a Products and Services Section in a Business Plan

The business plan products and services section is the centerpiece of your plan. While other sections of your business plan are important, the products and services section is the essence of your business and the point around which every other part of the business plan is built .

What to Include in a Products and Services Section

The products and services section of your business plan outlines your product or service, why it's needed by your market, and how it will compete with other businesses selling the same or similar products and services.

Your products and services section should include a description of the products or services you are offering or plan to offer (including future products or services). You should explain how your products and services will be priced and a comparison of the products or services your competitors offer in relation to yours.

You should also include the sales literature you plan to use. Detail your marketing materials, and clarify the role your website will play in your sales efforts.

The products and services section will include a paragraph or so on how orders from your customers will be processed or fulfilled, as well as any needs you have to create or deliver your products, such as up-to-date computer equipment. If your process depends on intellectual property or legal issues, such as trademarks , then those need to be addressed.

Tips on Writing the Products and Services Section

This section of your business plan should excite those you're hoping will fund your business or work with you. To that end, here are a few tips to create a products and services section that appeals to the reader.

Indicate Why Your Product or Service Is Needed

Especially if you're venturing into a new concept or invention, or a place where there is no current market, you need to explain the need for your product or service.

Highlight the Features of Your Product or Service

A crucial part of business success is the ability to set yourself apart from other businesses that sell the same or similar products and services. What features, such as price point or level of service, do you offer that are unique to you?

Focus on Benefits

Unique features are important, but even more vital is how those features provide value to consumers. Translate your features (i.e., faster or cheaper) into benefits (i.e., get it now or save money). The goal is to highlight how your product or service will fix a problem or improve a client or customer's life.

Be Clear and Concise

Don't let your business plan get bogged down in too much description and information. Use bullets or numbered lists to quickly and easily highlight important information.

Show Off Expertise, Experience, and Accolades

You not only want to describe your products and services but also share why you're the best person to provide them. Include anything in your education or experience that makes you an expert in this business. If you have testimonials, awards, or endorsements, share those. Finally, if you've applied for a patent, copyright, or trademark, include that as well.

Be the Expert, But Use Layman's Terms

You should know your product, service, and industry well, but don't expect your potential funders and partners to have the same level of knowledge. Assume the reader doesn't know as much as you when you explain what you're offering.

Avoid acronyms and jargon when outlining your products and services.

Indicate What's Special About Your Products or Services

Will you be offering a special guarantee or refund policy? Do you have a quicker or more unique way of delivering your product or service? 

Speak to Your Customer

While you don't want to write an advertorial, you do want to be customer-oriented when you write your products and services section.

Examples of a Products and Services Section

The Small Business Administration offers business plan examples that you can draw from to help guide your writing. Here's an example of a products section for someone creating "Wooden Grain Toys."

Wooden Grain Toys will sell wooden toys made from solid hardwoods (maple, beech, birch, cherry, and oak) and steel rivets. The toys are handcrafted and designed for small children to easily use. Our line currently includes the following nine models:

• All-Purpose Pick-Up Truck w/movable doors and tailgate
• Dump Truck w/functioning dumping mechanism and box
• Biplane (two-seater) w/movable propeller
• Steam engine with coal tender - additional cars available separately: caboose, flat car w/logs, box car, tank car, coal car
• Flat-Bed Truck w/logs

Wooden Grain Toys will offer its products for the following prices:

• All-Purpose Pick-Up Truck w/movable doors and tailgate - $25
• Dump Truck w/functioning dumping mechanism and box - $30
• Biplane (two-seater) w/movable propeller - $20
• Additional train cars (single car) - $5
• Additional train cars (three cars) - $12
• City Bus - $12
• Tow Truck - $18
• Flat-Bed Truck w/logs - $35
• Sports Car - $20
• Sedan - $20

What Is Product and Service in a Business Plan?

A products and services section of a business plan clarifies exactly what your business will produce , how much it'll sell for, and other details along those lines.

What Are Examples of Products and Services?

A product or service can be anything a business creates to turn a profit. Some businesses have both products and services. For example, a restaurant's services include cooking for and serving customers. The restaurant's products are the dishes and drinks it creates.

The 7 Steps of the Business Planning Process: A Complete Guide

In this article, we'll provide a comprehensive guide to the seven steps of the business planning process, and discuss the role of Strikingly website builder in creating a professional business plan.

Step 1: Conducting a SWOT Analysis

The first step in the business planning process is to conduct a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analysis will help you understand your business's internal and external environment, and it can help you identify areas of improvement and growth.

Strengths and weaknesses refer to internal factors such as the company's resources, capabilities, and culture. Opportunities and threats are external factors such as market trends, competition, and regulations.

You can conduct a SWOT analysis by gathering information from various sources such as market research, financial statements, and feedback from customers and employees. You can also use tools such as a SWOT matrix to visualize your analysis.

What is a SWOT Analysis?

A SWOT analysis is a framework for analyzing a business's internal and external environment. The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Strengths and weaknesses include internal factors such as the company's resources, capabilities, and culture. Opportunities and threats are external factors such as market trends, competition, and regulations.

A SWOT analysis can help businesses identify areas of improvement and growth, assess their competitive position, and make informed decisions. It can be used for various purposes, such as business planning, product development, marketing strategy, and risk management.

Importance of Conducting a SWOT Analysis

Conducting a SWOT analysis is crucial for businesses to develop a clear understanding of their internal and external environment. It can help businesses identify their strengths and weaknesses and uncover new opportunities and potential threats. By doing so, businesses can make informed decisions about their strategies, resource allocation, and risk management.

A SWOT analysis can also help businesses identify their competitive position in the market and compare themselves to their competitors. This can help businesses differentiate themselves from their competitors and develop a unique value proposition.

Example of a SWOT Analysis

Here is an example of a SWOT analysis for a fictional business that sells handmade jewelry:

• Unique and high-quality products
• Skilled and experienced craftsmen
• Strong brand reputation and customer loyalty
• Strategic partnerships with local boutiques
• Limited production capacity
• High production costs
• Limited online presence
• Limited product variety

Opportunities

• Growing demand for handmade products
• Growing interest in sustainable and eco-friendly products
• Opportunities to expand online presence and reach new customers
• Opportunities to expand product lines
• Increasing competition from online and brick-and-mortar retailers
• Fluctuating consumer trends and preferences
• Economic downturns and uncertainty
• Increased regulations and compliance requirements

This SWOT analysis can help the business identify areas for improvement and growth. For example, the business can invest in expanding its online presence, improving its production efficiency, and diversifying its product lines. The business can also leverage its strengths, such as its skilled craftsmen and strategic partnerships, to differentiate itself from its competitors and attract more customers.

Step 2: Defining Your Business Objectives

Once you have conducted a SWOT analysis, the next step is to define your business objectives. Business objectives are specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with your business's mission and vision.

Your business objectives can vary depending on your industry, target audience, and resources. Examples of business objectives include increasing sales revenue, expanding into new markets, improving customer satisfaction, and reducing costs.

You can use tools such as a goal-setting worksheet or a strategic planning framework to define your business objectives. You can also seek input from your employees and stakeholders to ensure your objectives are realistic and achievable.

What is Market Research?

Market research is an integral part of the business planning process. It gathers information about a target market or industry to make informed decisions. It involves collecting and analyzing data on consumer behavior, preferences, and buying habits, as well as competitors, industry trends, and market conditions.

Market research can help businesses identify potential customers, understand their needs and preferences, and develop effective marketing strategies. It can also help businesses identify market opportunities, assess their competitive position, and make informed product development, pricing, and distribution decisions.

Importance of Market Research in Business Planning

Market research is a crucial component of the business planning process. It can help businesses identify market trends and opportunities, assess their competitive position, and make informed decisions about their marketing strategies, product development, and business operations.

By conducting market research, businesses can gain insights into their target audience's behavior and preferences, such as their purchasing habits, brand loyalty, and decision-making process. This can help businesses develop targeted marketing campaigns and create products that meet their customers' needs.

Market research can also help businesses assess their competitive position and identify gaps in the market. Businesses can differentiate themselves by analyzing their competitors' strengths and weaknesses and developing a unique value proposition.

Different Types of Market Research Methods

Businesses can use various types of market research methods, depending on their research objectives, budget, and time frame. Here are some of the most common market research methods:

Surveys are a common market research method that involves asking questions to a sample of people about their preferences, opinions, and behaviors. Surveys can be conducted through various channels like online, phone, or in-person surveys.

• Focus Groups

Focus groups are a qualitative market research method involving a small group to discuss a specific topic or product. Focus groups can provide in-depth insights into customers' attitudes and perceptions and can help businesses understand the reasoning behind their preferences and behaviors.

Interviews are a qualitative market research method that involves one-on-one conversations between a researcher and a participant. Interviews can be conducted in person, over the phone, or through video conferencing and can provide detailed insights into a participant's experiences, perceptions, and preferences.

• Observation

Observation is a market research method that involves observing customers' behavior and interactions in a natural setting such as a store or a website. Observation can provide insights into customers' decision-making processes and behavior that may not be captured through surveys or interviews.

• Secondary Research

Secondary research involves collecting data from existing sources, like industry reports, government publications, or academic journals. Secondary research can provide a broad overview of the market and industry trends and help businesses identify potential opportunities and threats.

By combining these market research methods, businesses can comprehensively understand their target market and industry and make informed decisions about their business strategy.

Step 3: Conducting Market Research

Market research should always be a part of your strategic business planning. This step gathers information about your target audience, competitors, and industry trends. This information can help you make informed decisions about your product or service offerings, pricing strategy, and marketing campaigns.

There are various market research methods, such as surveys, focus groups, and online analytics. You can also use tools like Google Trends and social media analytics to gather data about your audience's behavior and preferences.

Market research can be time-consuming and costly, but it's crucial for making informed decisions that can impact your business's success. Strikingly website builder offers built-in analytics and SEO optimization features that can help you track your website traffic and audience engagement.

Step 4: Identifying Your Target Audience

Identifying your target audience is essential in the business planning process. Your target audience is the group of people who are most likely to buy your product or service. Understanding their needs, preferences, and behaviors can help you create effective marketing campaigns and improve customer satisfaction.

You can identify your target audience by analyzing demographic, psychographic, and behavioral data. Demographic data include age, gender, income, and education level. Psychographic data includes personality traits, values, and lifestyle. Behavioral data includes buying patterns, brand loyalty, and online engagement.

Once you have identified your target audience, you can use tools such as buyer personas and customer journey maps to create a personalized and engaging customer experience. Strikingly website builder offers customizable templates and designs to help you create a visually appealing and user-friendly website for your target audience.

What is a Target Audience?

A target audience is a group most likely to be interested in and purchase a company's products or services. A target audience can be defined based on various factors such as age, gender, location, income, education, interests, and behavior.

Identifying and understanding your target audience is crucial for developing effective marketing strategies and improving customer engagement and satisfaction. By understanding your target audience's needs, preferences, and behavior, you can create products and services that meet their needs and develop targeted marketing campaigns that resonate with them.

Importance of Identifying Your Target Audience

Identifying your target audience is essential for the success of your business. By understanding your target audience's needs and preferences, you can create products and services that meet their needs and develop targeted marketing campaigns that resonate with them.

Here are reasons why identifying your target audience is important:

• Improve customer engagement. When you understand your target audience's behavior and preferences, you can create a more personalized and engaging customer experience to improve customer loyalty and satisfaction.
• Develop effective marketing strategies. Targeting your marketing efforts to your target audience creates more effective and efficient marketing campaigns that can increase brand awareness, generate leads, and drive sales.
• Improve product development. By understanding your target audience's needs and preferences, you can develop products and services that meet their specific needs and preferences, improving customer satisfaction and retention.
• Identify market opportunities. If you identify gaps in the market or untapped market segments, you can develop products and services to meet unmet needs and gain a competitive advantage.

Examples of Target Audience Segmentation

Here are some examples of target audience segmentation based on different demographic, geographic, and psychographic factors:

• Demographic segmentation. Age, gender, income, education, occupation, and marital status.
• Geographic segmentation. Location, region, climate, and population density.
• Psychographic segmentation. Personality traits, values, interests, and lifestyle.

Step 5: Developing a Marketing Plan

A marketing plan is a strategic roadmap that outlines your marketing objectives, strategies, tactics, and budget. Your marketing plan should align with your business objectives and target audience and include a mix of online and offline marketing channels.

Marketing strategies include content marketing, social media marketing, email marketing, search engine optimization (SEO), and paid advertising. Your marketing tactics can include creating blog posts, sharing social media posts, sending newsletters, optimizing your website for search engines, and running Google Ads or Facebook Ads.

To create an effective marketing plan , research your competitors, understand your target audience's behavior, and set clear objectives and metrics. You can also seek customer and employee feedback to refine your marketing strategy.

Strikingly website builder offers a variety of marketing features such as email marketing, social media integration, and SEO optimization tools. You can also use the built-in analytics dashboard to track your website's performance and monitor your marketing campaign's effectiveness.

What is a Marketing Plan?

A marketing plan is a comprehensive document that outlines a company's marketing strategy and tactics. It typically includes an analysis of the target market, a description of the product or service, an assessment of the competition, and a detailed plan for achieving marketing objectives.

A marketing plan can help businesses identify and prioritize marketing opportunities, allocate resources effectively, and measure the success of their marketing efforts. It can also provide the marketing team with a roadmap and ensure everyone is aligned with the company's marketing goals and objectives.

Importance of a Marketing Plan in Business Planning

A marketing plan is critical to business planning. It can help businesses identify their target audience, assess their competitive position, and develop effective marketing strategies and tactics.

Here are a few reasons why a marketing plan is important in business planning:

• Provides a clear direction. A marketing plan can provide a clear direction for the marketing team and ensure everyone is aligned with the company's marketing goals and objectives.
• Helps prioritize marketing opportunities. By analyzing the target market and competition, a marketing plan can help businesses identify and prioritize marketing opportunities with the highest potential for success.
• Ensures effective resource allocation. A marketing plan can help businesses allocate resources effectively and ensure that marketing efforts are focused on the most critical and impactful activities.
• Measures success. A marketing plan can provide a framework for measuring the success of marketing efforts and making adjustments as needed.

Examples of Marketing Strategies and Tactics

Here are some examples of marketing strategies and tactics that businesses can use to achieve their marketing objectives:

• Content marketing. Creating and sharing valuable and relevant content that educates and informs the target audience about the company's products or services.
• Social media marketing. Leveraging social media platforms like Facebook, Twitter, and Instagram to engage with the target audience, build brand awareness, and drive website traffic.
• Search engine optimization (SEO). Optimizing the company's website and online content to rank higher in search engine results and drive organic traffic.
• Email marketing. Sending personalized and targeted emails to the company's email list to nurture leads, promote products or services, and drive sales.
• Influencer marketing. Partnering with influencers or industry experts to promote the company's products or services and reach a wider audience.

By using a combination of these marketing strategies and tactics, businesses can develop a comprehensive and effective marketing plan that aligns with their marketing goals and objectives.

Step 6: Creating a Financial Plan

A financial plan is a detailed document that outlines your business's financial projections, budget, and cash flow. Your financial plan should include a balance sheet, income statement, and cash flow statement, and it should be based on realistic assumptions and market trends.

To create a financial plan, you should consider your revenue streams, expenses, assets, and liabilities. You should also analyze your industry's financial benchmarks and projections and seek input from financial experts or advisors.

.jpg)Image taken from Strikingly Templates

Strikingly website builder offers a variety of payment and e-commerce features, such as online payment integration and secure checkout. You can also use the built-in analytics dashboard to monitor your revenue and expenses and track your financial performance over time.

What is a Financial Plan?

A financial plan is a comprehensive document that outlines a company's financial goals and objectives and the strategies and tactics for achieving them. It typically includes a description of the company's financial situation, an analysis of revenue and expenses, and a projection of future financial performance.

A financial plan can help businesses identify potential risks and opportunities, allocate resources effectively, and measure the success of their financial efforts. It can also provide a roadmap for the finance team and ensure everyone is aligned with the company's financial goals and objectives.

Importance of Creating a Financial Plan in Business Planning

Creating a financial plan is a critical component of the business planning process. It can help businesses identify potential financial risks and opportunities, allocate resources effectively, and measure the success of their financial efforts.

Here are some reasons why creating a financial plan is important in business planning:

• Provides a clear financial direction. A financial plan can provide a clear direction for the finance team and ensure everyone is in sync with the company's financial goals and objectives.
• Helps prioritize financial opportunities. By analyzing revenue and expenses, a financial plan can help businesses identify and prioritize financial opportunities with the highest potential for success.
• Ensures effective resource allocation. A financial plan can help businesses allocate resources effectively and ensure that financial efforts are focused on the most critical and impactful activities.
• Measures success. A financial plan can provide a framework for measuring the success of financial efforts and making adjustments as needed.

Examples of Financial Statements and Projections

Here are some examples of financial statements and projections that businesses can use in their financial plan:

• Income statement. A financial statement that shows the company's revenue and expenses over a period of time, typically monthly or annually.
• Balance sheet. A financial statement shows the company's assets, liabilities, and equity at a specific time, typically at the end of a fiscal year.
• Cash flow statement. A financial statement that shows the company's cash inflows and outflows over a period of time, typically monthly or annually.
• Financial projections. Forecasts of the company's future financial performance based on assumptions and market trends. This can include revenue, expenses, profits, and cash flow projections.

Step 7: Writing Your Business Plan

The final step in the business planning process is to write your business plan. A business plan is a comprehensive document that outlines your business's mission, vision, objectives, strategies, and financial projections.

A business plan can help you clarify your business idea, assess the feasibility of your business, and secure funding from investors or lenders. It can also provide a roadmap for your business and ensure that you stay focused on your goals and objectives.

Importance of Writing a Business Plan

Writing a business plan is an essential component of the business planning process. It can help you clarify your business idea , assess the feasibility of your business, and secure funding from investors or lenders.

Here are some reasons why writing a business plan is important:

• Clarifies your business idea. Writing a business plan can help you clarify your business idea and understand your business's goals, objectives, and strategies.
• Assesses the feasibility of your business. A business plan can help you assess the feasibility of your business and identify potential risks and opportunities.
• Secures funding. A well-written business plan can help you secure funding from investors or lenders by demonstrating the potential of your business and outlining a clear path to success.
• Provides a roadmap for your business. A business plan can provide a roadmap and ensure that you stay focused on your goals and objectives.

Tips on How to Write a Successful Business Plan

Here are some tips on how to write a business plan successfully:

• Start with an executive summary. The executive summary is a brief business plan overview and should include your business idea, target market, competitive analysis, and financial projections.
• Describe your business and industry. Provide a detailed description of your business and industry, including your products or services, target market, and competitive landscape.
• Develop a marketing strategy. Outline your marketing strategy and tactics, including your target audience, pricing strategy, promotional activities, and distribution channels.
• Provide financial projections. Provide detailed financial projections, including income statements, balance sheets, and cash flow statements, as well as assumptions and risks.
• Keep it concise and clear. Keep your business plan concise and clear, and avoid using jargon or technical terms that may confuse or intimidate readers.

Role of Strikingly Website Builder in Creating a Professional Business Plan

Strikingly website builder can play a significant role in creating a professional business plan. Strikingly provides an intuitive and user-friendly platform that allows you to create a professional-looking website and online store without coding or design skills.

Using Strikingly, you can create a visually appealing business plan and present it on your website with images, graphics, and videos to enhance the reader's experience. You can also use Strikingly's built-in templates and a drag-and-drop editor to create a customized and professional-looking business plan that reflects your brand and style.

Strikingly also provides various features and tools that can help you showcase your products or services, promote your business, and engage with your target audience. These features include e-commerce functionality, social media integration, and email marketing tools.

Let’s Sum Up!

In conclusion, the 7 steps of the business planning process are essential for starting and growing a successful business. By conducting a SWOT analysis, defining your business objectives, conducting market research, identifying your target audience, developing a marketing plan, creating a financial plan, and writing your business plan, you can set a solid foundation for your business's success.

Strikingly website builder can help you throughout the business planning process by offering a variety of features such as analytics, marketing, e-commerce , and business plan templates. With Strikingly, you can create a professional and engaging website and business plan that aligns with your business objectives and target audience.

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Service Process

Services are Intangible products such as accounting, banking, cleaning, consultancy, education, insurance, expertise, medical treatment, or transportation. Services deal with processes rather than with thing are experienced rather than consumed.

According to Quinn, Gagnon, ‘Services are actually all those economic activities in which the primary output is neither a product nor a construction’.

Learn about:-

1. Meaning of Service Process 2. Characteristics of Service Process 3. Steps for Managing Service Processes 4. Elements

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5. Planning a Service Process 6. Phases 7. Service Blueprinting 8. Challenges in Designing the Service Process.

Service Process: Meaning, Characteristics, Steps, Elements, Phases, Challenges and Other Details

Service process – meaning.

When manufacturing goods, the process involved takes place in the factory’s premises, keeping the customers at bay. The customer rarely comes in contact with the manufacturing process, as those processes that lie with the factory premises, lie in the sole domain of operations.

Interaction of the customers with the system should be a part of the service creation and hence this makes the customer be a part of the service process. The service failures often are the result of inadequately and inappropriately designed service processes.

Services which depend on customer contact or customers are the recipient of service actions, the customer side of the process can be mapped by identifying service delivery process. A chart that draws and lists the various contact points when the system and the customer come in contact to create a value is known as a flow chart.

Service production and consumption are inseparable, and therefore the customer acts as a co-producer of many services. The service delivery is the outcome of the service process. The process constitutes the service itself. The service characteristics of inseparability and par­ticipation often make the customer, interact and become a part of the process.

Despite such importance of the service process, sometimes service organisations pay very little systematic attention to this aspect of business. As a result, service processes evolve on their own with internal bias or no focus at all. Therefore, it is not surprising that many service organisations are not adequately equipped to serve the customer well and such processes limit the efficiency of the operations.

It is a process to deliver requested service to the end user. Let us take an example of a company which is known for its service processes – DTDC begin its operations in the year 1990 and since then, year by year they have achieved various milestones based on their service quality.

This company thrives on its quick service and the reason it is able to do so is its confidence in its processes. To top it, the demand of these services is such that they have to deliver optimally without a loss in quality or in quantity. Thus, the process of a service company in delivering its product is of utmost importance.

Quality of a service is defined by the way it is been processed thus detailing the service process becomes very important for all service provider. Service processes intensely interact with the customer. Production processes differ from service processes. The customer only perceives the output of a production process he selects it and pays for it.

Process is an element of the extended marketing-mix of services marketing. A process outlines the procedures and methods to be followed to produce and deliver a service. It also determines the extent of customer involvement and participation required in service creation and delivery. Therefore, process explains a series of activities, their sequence and the role to be played by the service provider, the intermediaries and the customer. It plays an important role in determining the quality of service design, production and delivery.

It is not possible to differentiate production from delivery in services as they are inseparable in nature. Therefore, process includes all the activities related to production as well as delivery of the service. Further, processes need complete dedication and commitment of the service personnel in order to be completed successfully.

Companies, not only in the manufacturing sector, but in the service sector as well, gain competitive advantage over other players with improved processes. A well-designed and well-executed process increases operational efficiency, offers convenience to customers, reduces the cost of offering services, and improves the efficiency of service delivery. Effectively, it helps in achieving the goal of customer satisfaction.

Service Process – 5 Main Characteristics

1. Divergence:

Often, service providers adapt their services to match customer needs, as a single service might not cater to all. The degree, to which a service provider can vary services, deviating from the standard service, is known as divergence. Divergence provides an opportunity for the service provider to customise services for his customers, and serve them better. For example, many tourism companies customise their holiday packages according to customer needs.

2. Complexity:

The process of creating and delivering a service involves many activities. While some activities might be quite simple, others can be quite complex. The complexity of a process should take into consideration the contribution of the different activities to service quality.

The activities that contribute to service quality in an interaction between a banker and a customer may include the friendliness shown by the banker, his knowledge about the products, the speed at which the service is offered to the customer, etc. At the same time, the number of activities in the production and delivery of a service increase with the increase in divergence, i.e., complexity increases with divergence.

3. Service Location:

The nature of the service being offered largely determines the service location. Services can be delivered at the service provider’s location, at the customer’s location, at a neutral location or virtually, depending on their nature. For example, customers can either visit a hotel to have dinner or they can order home delivery.

In the former case, the service location is the hotel, and in the latter, the customer’s home is the service location. A tourist operator offers his services at the tourist spot, which is a neutral location. A banker offers his services virtually when he provides internet-banking facilities to customers. Therefore, service location depends on the alternatives available to the service provider and the customer.

4. Customer Participation and Interaction:

Service processes should be designed depending on the extent of interaction with the customer and his participation in service production and delivery. The level of customer interaction and participation differs from service-to-service. For example, the level of interaction between a banker and a customer is negligible in mobile banking transactions while the level of customer participation is high in deciding and ordering a menu for a wedding.

It can also differ from channel-to-channel for the same service. The perceived quality of a service is enhanced if a customer has prior knowledge of the service process. For example, a customer who has an idea about the check-in process at an airport will be more comfortable and can appreciate the improvements made by the airline in the process, when compared to a customer who has no knowledge of the check-in process.

5. The Service Itself:

Services can be either process-based or technology-based. Process-based services involve many activities that a customer has to go through before obtaining the service. For example, a student aspiring to join an IIM (Indian Institute of Management) course or any other business institution has to fill-up an application form, take the entrance test and appear for an interview, group discussion, etc., before gaining admission. Process-based services involve many people, with high levels of interaction between them.

The service provider has an opportunity to improve the quality of service at every step and in each interaction. On the other hand, equipment or technology-based services require very little inter-personal communication between a service provider and his customer.

For example, internet banking, offered by many banks like ICICI, HDFC, GTB, etc., has almost eliminated the need for personal interaction between a service provider and his customer. Through technology-based services are efficient and convenient for customers, service providers lose an opportunity to enhance the quality of service through personal interaction. Further, any problem in the teleological systems of the service provider affects the quality of service production and delivery too.

Service Process – Steps for Managing Service Processes : 7 Step Process

Services are experiences from the customer’s point of view. Services are processes that have to be designed and managed to create the desired customer experience from the organisation’s viewpoint. Hence processes become the plan of the services. Processes describe the method and sequence in which the service operating systems work and specify how they link together to create the value proposition promised to customers.

Customers are an integral part of the operation, and the process becomes their experience, in high contact services. If the process has been designed up to the customer’s standards, this will frustrate the customers as the process are often slow and of poor quality.

If the process is not designed properly, it affects the frontline employees also in doing their jobs well, which then results in poor productivity, with an increase in the risk of service failures.

While designing and managing a service process, keep in mind the following steps:

Step # 1. Flowcharting:

Flowcharting, a technique for displaying the nature and sequence of the different steps involved in delivering a service to customers, offers an easy way to understand the totality of the customer’s service experience. We can gain valuable insights into the nature of an existing service by flowcharting the sequence of encounters customers have with a service organisation.

Recognising that a value proposition may embrace all or part of the whole cluster of benefits a firm offers to its target market, service marketers need to create a coherent offering in which each element is compatible with the others and all are mutually reinforcing.

Step # 2. Service Blueprinting:

It is important for an organisation to gain a holistic view of how the elements of the service relate to each other, when the service production processes are complex and involve multiple service encounters.

Blueprinting’ according to Shostack, is a graphical approach, designed to overcome problems that occur where a new service is launched without adequate identification of the necessary support functions.

The three main elements in a customer’s blueprint are:

i. All of the principal functions required to make and distribute a service are identi­fied, along with the responsible company unit or personnel.

ii. Timing and sequencing relationships among the functions are depicted graphically.

iii. For each function, acceptable tolerances are identified in terms of the variation from standard that can be tolerated without adversely affecting customer’s perception of quality.

Step # 3. Identify Failure Points:

A good blueprint will bring out the key elements in service delivery, highlighting risks which can go wrong. The most serious fail points are those that will result in failure to access or enjoy the core product, from the customer’s view point.

They involve:

i. The reservation (could the customer get through by phone? Was a table available at the desired time and date? Was the reservation recorded accurately?)

ii. Seating (was a table available when promised?).

There is also the possibility of delays between specific actions, requiring the customers to wait, since service delivery takes place over time. Too much waiting can irritate customers. Failures often lead directly to delays, reflecting orders that were never passed on, or time spent correcting mistakes.

Step # 4. Failure Proofing:

Once the points that seem negative have been identified then a careful analysis for the reasons for failure need to be evaluated in service processes. The analysis done often points outs the prospect for “failure proofing” certain activities in order to reduce or even eliminate the risk of errors. Poka-Yoke technique is widely used in fail-safe service processes.

Step # 5. Setting Service Targets:

Service managers can learn the nature of customer expectations at each step in the process, through both formal research and on-the-job experience. The expectations of customer’s vary from the desired level to the threshold level of merely adequate service.

At each step service providers should design standards to satisfy and make the customers happy else they will have to modify the customer’s expectations. These standards might include time parameters, the script for a technically correct performance, and prescriptions for appropriate style and demeanor.

Step # 6. Service Process Redesign:

The processes that have been out dated, get a fresh lease of life but this does not mean that in the first place the processes were poorly designed. Rather, changes in technology, customer needs, added service features, and new offerings may have made existing processes crack and creak. Instead of getting rid of outdated services and replacing them with a new innovations, redesigning of existing services should be considered.

These are the following types of service redesign:

i. Eliminating Non-Value Adding Steps:

With the goal of focusing on the benefit- producing part of the service encounter, some activities at the front-end and back- end processes of services can be streamlined. By trying to eliminate non-value-adding steps, service redesign streamlines these tasks. The outcomes are typically increased productivity and customer satisfaction.

ii. Physical Service:

Physical re-design involves changing the customer’s experience through the tangibles associated with the service or the physical surroundings of the service. Midway Express Airlines has changed the entire airline flight experience primarily through re-designing the interior of its airplanes. Leather seats, two-by-two seating, China plates, and cloth napkins are all ways of creating a new experience through tangibles and services cape re-design.

iii. Pre-Service:

This type of re-design involves streamlining or improving the activation of the service, focusing on the front-end processes. An example can be express check-in at a hotel or car rental, pre-admission processes at a hospital and pre-payment of tolls on highways. Making the front-end of the service more efficient can dramatically change the customer experience during actual service delivery.

iv. Direct Service:

Direct service means bringing the service to the customer rather than asking the customer to come to the provider. This might mean delivering the service to the customer in his or her home or workplace.

Restaurant food and dry cleaning delivery to the office, pet grooming in the home, auto repair in one’s driveway, and computer distance education and training services are examples of firms bringing services directly to their customers rather than customers travelling to the service provider.

v. Self-Service:

Moving the customer into a production mode rather than a passive, receiving mode is another approach to redesign. Re-designing the service process in this way increases benefits for the customer in terms of personal control, accessibility, and timing. Prime examples of self-service occur when companies offer their services via the Internet, as in the case of Internet banking.

vi. Bundled Service:

Grouping, or bundling, multiple services together is another way to re-design current offerings. The benefit to customers is in receiving greater value, combined with convenience, than they might have received by hiring each service independently.

Step # 7. Managing Customers Effectively:

Managing customers effectively as partial employees is another way to enhance customer performance in service processes and to reduce customer-induced service failures.

The following steps need to be followed:

i. Recruitment and Selection:

For a human resource management to be effective, the first plan is to start with recruitment and selection. The same approach should hold true for “partial employees”. So if co-production requires specific skills, firms should target their marketing efforts to recruit new customers who have the competency to perform the necessary tasks.

ii. Job Analysis:

A “job analysis” of the customer’s roles in the business needs to be in place, which should be compared against the roles that the firm wants them to play. Find out if the customers are capable enough to have the skills needed to perform.

iii. Education and Training:

Once the job has been analysed, the next step would be education and training, especially if the job analysis identified significant misalignment of customers’ role perceptions. If the customers are expected to work more, then the information which be needed by them to perform better would be greater.

This type of training and education can be given to them in different ways. Automated machines often contain user-friendly operating instructions. Many websites include a Frequently Asked Questions (FAQ) section. Advertising for new services often contains significant educational content, and brochures and posted instructions are two widely used approaches.

iv. Motivate:

Motivation is an essential part for managing customers effectively. They must be motivated by rewarding them for performing well.

v. Appraise:

Appraisals should be done at regular intervals. If the performance is unsatisfactory, then make sure to improve the customer’s knowledge by giving him proper training.

vi. Ending:

When a relationship is not working out, ending it remains an option of last resort. Physicians have a legal and ethical duty to help their patients, but the relationship will succeed only if it is mutually cooperative. Having to terminate customer relationships may indicate problems in the recruitment process that needs to be addressed.

Service Process – Elements

The service process is a part of the extended 3 Ps of services. They are an addition to the existing or traditional 4 Ps of services. The traditional Ps are important in defining and understanding services, however, they are not sufficient for the same. Hence, for a comprehensive understanding of services, the additional 3 Ps – People, Process and Physical Evidence are introduced and studied.

We shall study each element of this extended marketing mix in detail. Process is referred to the procedures, mechanisms and flow of activities by which the service is delivered or the service delivery and operating systems. For example, the process of travelling with a budget airline, is very different from that with a full- fledged premium airline. The process of dining at an up-scale restaurant is different from eating at a local restaurant.

Services are performances or actions done for or with the customers, that is the reason, they typically involve a sequence of steps and activities. The combination of these steps constitute a service process which is evaluated by the customers. Furthermore, in a service situation customers are likely to have to queue before they can be served and the service delivery itself is likely to take a certain length of waiting time.

For example, at a customer service counter of your local telephone service provider, there is a queue of customers waiting for their turn to register their inquiry, complaint or grievance. A doctor’s office has patients waiting for their turn in the ‘waiting room’. There are numerous such examples where, the customers have to wait for the service to be delivered, how fast, effective and efficient is this waiting period is a task for any marketer.

It helps if marketers ensure that customers understand the process of acquiring a service and the acceptable delivery times. Creating and managing effective service processes are essential tasks for service firms. This is the reason behind customer care department of various companies give a 24 hours’ time window (or more depending on the efficiency of the service provider) to address the customer complaint or to visit the customer personally to provide necessary corrective service.

Managing the process factor is essential due to the perishability of services which means that services cannot be inventoried, stored for reuse or returned. We have studied this under capacity constraints and demand variation. As services are performances that cannot be stored, it is a challenge for service businesses to manage situations of over or under demand.

Another distinctive characteristics of the service process that provide evidence to the customer is the standardized or customized approach based on customer’s needs and expectations. Since services are created as they are consumed, and because the customer is always involved in the process, there are more opportunities for customizing the service to meet the needs of the customers.

The first concerns the extent to which the characteristics of the service and its delivery system lend themselves to the scope of customization; the second relates to the extent of flexibility the contact employees or front line staff are able to exercise in meeting the needs of the customers.

Service Process – Important Decisions to be Taken by a Service Provider in Planning a Service Process

A service provider has to take many decisions regarding the use of technology, people, materials and equipment in serving clientele. Most of these decisions are taken while planning the service process, which is in turn determined by the type of service offered and customer requirements.

Let us now discuss the important decisions to be taken by a service provider in planning a service process:

1. Layout Design:

Layout involves decisions regarding both production process and front/office layout. An ideal design uses the space available to the maximum extent, minimizing the movement of goods/people, and increasing customers’ convenience. Finally, it should be pleasant and encouraging for the service employees as well as the customers.

For example, the layout at an airport should place the luggage weighing equipment, ticketing counters, check-in counters, security check equipment, passenger and visitor lounges, and coffee shop in such a way that it increases the productivity of airport personnel by reducing the time and efforts involved, and also offers convenience to customers.

2. Organisational Structure:

Decisions under organisational structure determine the extent to which processes need to be standardised. They also determine whether an informal or formal organisational structure is to be adopted, whether decision-making is to be centralised or decentralised and how the organisation is to be structured.

Service Process – 4 Important Phases

A product is manufactured away from a customers and the time lag between manufacturing and consumption is more. But most of the service is processed just few steps away from customers. Other peculiarity of service processes is that throughout the process there are interactions between service provider and customers.

There may be duties of the customer that are critical for success or failure of the service process. For example, it may be necessary that the customer provides some information to allow the further proceeding of the process. It is important to emphasize that a service process must describe the interaction between customer and service provider.

Another vital factor is that the services offered can be divided into two stages namely:

1. Front stage

2. Back stage

Those activities of the service providers and that of the customers which are visible are referred to as front stage. On the other hand, those activities which cannot be seen are referred to as back stage.

Yet another key property in services is that the processes will have to signify the transfer of resources and related information from customer to the service provider and the compensation vice versa. Furthermore, service processes are often cross- organizational. The top-management service providers, who are responsible for providing the service to the customer coordinates several of sub-processes.

The definition of the lifecycle for service processes is based on the lifecycle which contains the design phase, the deployment phase, the operation and the evaluation phase.

1. Design Phase:

Today’s customers are very demanding not only in terms of better quality services but also how fast they are served. If a company does not want to lose the customers base they have to design their service process is in such a way that service is delivered fast and with quality. Service quality is very important for service providers to build customer loyalty and to achieve competitive edge.

The design phase help to formalize the interaction between the customer and service provider it helps to define the contacts and the information exchanged in this contacts. For example a person entering in a restaurant who are the people who will have first-hand interaction with customers is it the door keeper, the manager who will guide customers to here table or the waiter who will give the menu card or is it directly the manager who will take the order.

Service process is divided into two stages, namely, front stage and back stage to have appropriate execution of interactions. For example, in a restaurant front stage activities are welcoming the customers, taking order from the customers, serving food to the customers, collecting plates after customers are done and in the end bringing the bill whereas, back stage activities are taking order from waiter with regard to what customer has ordered, cooking, decorating the food, preparing the bill and payment work.

Both front stages and back stage are so much interlinked that companies should clearly define the roles and regulations of each and every individual.

The process of design phase is not only concerned with interaction of customer with the service provider, it is also about designing the interaction that the service provider has with suppliers. Many service providers use suppliers to provide sub- services for example many companies are buying space is social networking sites to increase their sales so the contract with these suppliers have to be taken into account as well so that they also are accountable for better service delivery.

Estimating the demand of a service is very tough as they are manufactured the moment they are consumed. Therefore, to assure the customers about the reliability of the service provider, certification and documentation of the service to be provided is an important means.

Such a certificate is based on the compliance with rules and structures assuring an adequate service quality as per requirement. An example for such a surrogate is the certification of ISO 20000 compliance, which is an essential benefit for a service provider.

2. Deployment Phase:

The planning which has been defined in the design phase is verified by the deploying the process. The interactions between the client and the supplier will have to be identified in order to avoid clashes and problems between them during the process.

There are many parallel activities which happen in interacting with an employee such as other customers trying to interact with other service providers outside noise etc. Particular attention should be paid to synchronize the deployment process in order to avoid such disturbances.

The certification of the designed process requires a sealing of the process during deployment. Once the certification is obtained, changes of any kind cannot be performed as this may result in losing the certificate. To fulfill the service level requirements concerning readiness and dependability, appropriate resources and substitute systems have to be allocated and prepared.

3. Operation Phase:

During the operation of the service process, it is essential to record a number of facts and figures to prove to the customer that the level agreements relating to the service process have been met.

To begin with, the availability and dependability of the services will have to be recorded. This log will also include the time required for repair and other broken services. In case the service providers have experienced failure in the past, caution will have to be taken to prevent such failure from reoccurring.

Interaction between the client and customer will have to be logged which serves as a proof of whether the customer’s requests has been catered to, the time taken to provide the service and other such information. The same applies for the handing over and restitution of resources at the end of the service process; the customer’s resources have to be returned to the customer.

This process will have to done by using specified techniques guaranteeing that formal requirements such as receipts, protocols etc. are used and a suitable documentation is generated which proves the restitution of the resources.

As the broken services cannot be replaced from the available stock, the service providers of broken services will have to suggest a remedy wherever possible to ensure the customers are not affected by the same. In order to achieve this, suitable backup and retrieval procedures will have to be made available.

Suppose there is a failure during the service process, the agreements entered into by the parties will play a vital role which safeguards the interest of the customers at first. There may be different service level agreements for different customers defining much shorter recovery times for one customer. Thus, this customer should be supported first.

The challenge here is the tracking of the process status, because the process is cross-organizational. Several service process certificates such as ISO/IEC 20000 require that quality control and upgrading mechanisms are stimulated throughout the operation phase to allow a future estimation and enhancement of the process.

4. Evaluation Phase:

The evaluation phase is also prejudiced by the exceptional features of service processes and services. The service providers will have to be in a position to prove to the customers that the service level agreements have been fulfilled and satisfied all the provisions stated in the agreement.

Besides this, the details about failures, if any, will be used for recognizing actions for improvement in the service process. Therefore, the availability and reliability achieved and the failures occurred have to be compared with the service level agreement, mal-formed interactions shall be traced and violations of the handover and restitution protocols shall be exposed.

Service Process – Elements of Blueprinting

A service blueprint depicts the entire service process on a map and shows the various stages of customer interaction with the service provider, and provides minute details of the service delivery processes, the tangible evidence of the service, and the people involved in carrying it out. Blueprinting helps in breaking up the service delivery process into a series of logical steps. Blueprinting can be used in either designing or redesigning service products. Let us now discuss the various elements of blueprinting.

Elements of Blueprinting :

These elements are discussed by Zeithaml and Bitner in “Services Marketing”. The complexity of the service determines the type of symbols used and the number of lines in the blueprint. However, the rules in sketching the blueprint are not rigid.

The following are the various elements of a blueprint:

1. Customer Role:

This element involves all the steps a customer goes through in selecting a particular service, purchasing it, consuming that service, and finally rating it. For example, a customer visits a restaurant depending on the type of food he wants to eat and his financial position, he interacts with the service personnel in the restaurant and orders the food, he consumes the food, pays the bill, offers a tip, and finally he evaluates the whole experience.

2. Onstage and Backstage Employee Actions:

Onstage employee action can be any activity performed by the service employees that can be seen by the service personnel. Onstage employees’ action may include the manner in which a waiter takes the order, the way he serves, etc., which can be seen by the customer. On the other hand, backstage employees’ actions include those activities performed by the service personnel, which are necessary to support the onstage service personnel. Backstage employees are involved in preparing the food for the customers, arranging them, billing the service, etc.

3. Support Processes:

A service blueprint maps all the support services, activities, or processes that help the service personnel in producing and delivering the services. For example, a hotel may provide training for its service personnel (both onstage and backstage) on the aspects of service creation and delivery. This training is a support process.

4. Technology:

A service provider needs to look into different aspects of the available technology and the extent to which it needs to be upgraded for delivering the desired services at the expected quality. For example, banks that are planning to introduce internet banking should analyse the available technologies, and upgrade their systems to offer services through the internet.

5. Conversion Process:

A service provider is required to choose a method of converting inputs into the desired output from the pool of alternatives available. For example, a bank can communicate with its customers through direct mail, facsimile, telephone, courier, internet, mobile phone, etc. The choice should be based on the organisation’s ability to bear the costs involved, customer preferences, the service quality level offered by each alternative, user friendliness of each alternative and the speed at which it delivers the services.

6. Equipment:

A service provider should opt for equipment that is compatible with the other systems in the process. He should also analyse the extent to which it is useful in the process, compare its operating costs with the resultant benefits, assess the knowledge required by the operators to work with the equipment and finally, estimate its maintenance costs. This will help in choosing the right equipment for the process.

7. Flow of Process:

Process flow determines the flow of work from one stage to another to produce the final output. It involves the logical arrangement of service personnel and equipment to perform the operations according to the process. For example, McDonalds has a well-laid process flow with service personnel operating the equipment to deliver the standard services on time. Generally, companies use flow charts to develop the process flow.

8. Service Personnel:

Service personnel play an important role in production and delivery of services. In fact, they provide a competitive advantage to the service provider. A service provider should therefore be careful to hire the right people in terms of qualification and skills. He should then give them the right jobs to do, train and develop them continuously, and motivate them to deliver the best quality service.

9. Service Location:

As services are intangible in nature, customers attach importance to the service location. They perceive it as an evidence of the quality of service offered Therefore, service providers should choose a location that is easily accessible to customers, has a good infrastructure and the right atmosphere. For example, foreign banks and private banks in India today look entirely different from the old nationalised banks.

Service Process – 4 Major Challenges in Designing the Service Process

Since the services are intangible, there is a difficulty in describing them and it becomes a challenging task for the service originators.

Lynn Shostack, author of a Marketing Management column for ‘The American Banker’ identified four risks inherent in describing services-

1. Over Simplification:

Shostack writes, “To say that ‘portfolio management’ means ‘buying and selling stocks’ is like describing the space shuttle as ‘something that flies.'” Many a times, the key points in the service process remains unnoticed or is overlooked in the designing phase, which will be identified only when the customers on a later date when they criticize about the process.

2. Incompleteness:

Customers can provide a clear picture of the services with which they have direct contact and are familiar to such service. Hence, the service designers will have to program the functioning services in such a way that they can be altered without much difficulty to accommodate the customers.

3. Subjectivity:

People are influenced by their personal experiences and they can relate the same to services, irrespective of whether they are connected to such experiences or not. For instance, if you had a tough day at work, even your favorite food eaten the same day will not leave you contented.

4. Biased Interpretation:

When the users of services describe the services to the others, a prejudice is formed and in addition to that, it creates bias in the minds of the listeners with the use of words and their interpretation of the use of the words. For example, the perspective of a person for the terms “well-mannered and receptive” may be different from what another perceives it to be.

Related Articles:

• Customer Retention Strategies in Service Marketing: Top 4 Stages
• Major Steps that Company Should Embark on for Reengineering its Process
• Service Recovery: Meaning, Recovery Paradox Theory and Stages | Service Marketing
• Bench­marking a Company: Concept and Process | Company Management

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What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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How to Do Payroll for a Small Business

Table of Contents

Processing payroll by yourself can be complex, and if you’re doing it for the first time, it’s crucial to consult an expert before you get started.

The challenge of processing your payroll is what you may miss. For example, entering deductions or filing payroll taxes incorrectly could expose your business to severe liability. However, you can still process payroll manually – in eight steps – and if you’re a small business owner who employs only a few people, it may be worth learning how to do payroll independently.

Employee compensation can cost between 40 and 80 percent of your gross revenue, according to FreshBooks. Read more must-know business stats if you want to be successful.

How to do payroll: 8 easy steps

Step 1: find your employer identification number..

Your first step is to set up an employer identification number (EIN) with the IRS. The IRS issues this number so it can identify your business. If you’re a new business, you must apply for an EIN. You can read about how to apply for an EIN and learn more about the EIN program and process on the IRS website.

Applying is free, and the IRS prefers that you apply online, though you can also apply by fax or mail. International applicants may also apply by phone. Online applications, if approved, result in instant EIN assignment, whereas fax and mail applications take four business days and one month, respectively.

You’ll also need to check with your state and local (city and/or county) tax office for those tax ID numbers.

Editor’s note: Looking for the right online payroll service for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Step 2: Collect employee tax information.

Once you have your EIN, you must collect relevant tax information from your employees. This means having all employees fill out a W-4 and an I-9 . If you have contract or freelance workers, you’ll have to collect 1099s. On these payroll forms, employees provide legal information about their work status, elect to take out certain deductions and fill out other important information.

You can’t process payroll without the details provided on these forms. There are laws on when you must submit this paperwork to the IRS, depending on the information your employees provide. You can read more about submitting W-2s and I-9s to determine what’s required of your business.

Remember that 1099s have a different set of rules for how to prepare them and submit them to the IRS and your employees. Since most of the work done for these forms falls to the employees, your business will spend only a short time – 15 minutes – distributing these forms to your employees and contractors, collecting them, and submitting them to the IRS.

Step 3: Choose a payroll schedule.

Once you’ve established all the relevant tax information for your business and its employees, you must decide how to pay your workers. There are four types of pay schedules: weekly, biweekly, semiweekly and monthly. All four schedules have their advantages and disadvantages. Carefully consider how often you’ll pay employees, but don’t take so long that your employees go without pay for unreasonable periods. You should devote 15 to 30 minutes to reviewing state laws about your payroll schedule.

Most companies choose either a biweekly or semimonthly pay period, depending on how they want to approach their yearly schedules. However, some states require hourly workers to be paid weekly.

Step 4: Calculate gross pay.

Calculating gross pay is simple: Just multiply the number of hours an employee has worked in a given pay period by their hourly rate.

The easiest way to track employee hours is via spreadsheet. Once you have the total hours for a pay period, multiply that by the employee’s hourly rate, and you’ll have that employee’s gross pay. You must complete all of the steps discussed here for each employee in your company.

Here’s a quick example: An employee has worked 85 hours in your biweekly pay period and is paid $10 per hour. Your pay period this time around is 80 hours.

• 80 hours x $10/hour = $800
• 5 hours x $15/hour (overtime pay) = $75
• Gross pay = $875

If you use a spreadsheet to determine your employees’ gross pay, you can likely make all the required calculations in just a few minutes with your software. If you plan to calculate all your employees’ gross pay by hand, you may need a few minutes for each calculation, and this time adds up quickly when you have an entire team of workers.

Step 5: Determine deductions, allowances and other withholdings.

One of the most important steps in processing payroll is determining each employee’s deductions and allowances.

As a quick refresher, exemptions and allowances are the same: They refer to how much money is taken out of your paycheck during the year. Allowances are specified on a W-4. Deductions, specified by the employee on a 1040 or 1040-SR form , are the things you can deduct from your income when you do your taxes. This is where you must pay close attention to how employees fill out their tax-related forms and withhold the proper amounts.

On top of deductions and exemptions, factor in other aspects of payroll processing and withholdings from each paycheck. Depending on your business’s situation, you may have to consider the following:

• Federal taxes
• Social Security
• State taxes
• Local taxes
• 401(k) contributions
• Workers’ compensation contribution
• Other benefits

Since the rate by which you must multiply your employees’ paychecks for each of these deductions and allowances varies by category and employee, this step can be quite time-consuming – potentially on the order of hours – if done by hand. However, if you’ve stored and meticulously organized all your information in a spreadsheet, it takes mere minutes.

Storing and organizing employee tax deductions and withholdings with a spreadsheet or payroll software can expedite this process.

Step 6: Calculate net pay and pay your employees.

After tallying the deductions, allowances and other taxes, subtract what’s being withheld from each employee’s gross pay. The resulting number is net pay.

Gross pay – deductions = net pay

Net pay is what each employee is paid at the end of each pay period. This is also known as take-home pay. Create a pay stub for each employee and track what you’re withholding. Tracking payment and maintaining the right records benefits your business in the long run. It also helps you track how an employee is progressing at your company.

Once you’ve calculated net pay for each employee, pay each one by their preferred payment method.

Payroll is a big expense for businesses, and while using a payroll solution costs money, it can cut down on the time required to handle all these steps. It also means your employees can receive their paychecks in various forms, including checks, direct deposits and payroll cards .

As the prominence of payroll solutions suggests, calculating net pay – like determining deductions and allowances – can take hours by hand. Even if you can quickly determine net pay using a spreadsheet, delivering your payments to your employees without an automated system can likewise take hours.

Step 7: Keep payroll records and adjust to fix mistakes.

Maintaining honest and organized payroll records is essential. You want to be able to reference your records if there’s ever a discrepancy between an employee’s net pay and what they expect to receive. It’s also important from a tax perspective to have these records on hand in case you have to work with the IRS. Mistakes happen, and as long as you correct them quickly and honestly, you’ll recover quickly.

Recordkeeping is also essential for payroll taxes you have to pay out regularly. Most electronic methods of gross pay, deduction and net pay calculation generate automatic records if you upload the files you used to cloud storage. Save a separate copy of any spreadsheets you used after executing your payroll.

You’ll need to keep written, tangible ledgers and mailing receipts for paper calculations and paychecks delivered by postal mail. While each of these steps can take seconds, the time adds up when you handle these processes for several employees.

Step 8: Withhold, report and pay payroll taxes.

Part of processing your own payroll is calculating the payroll taxes that you have to withhold from employee paychecks. This includes income taxes, Social Security and Medicare taxes. Your business may also need to pay federal unemployment tax (FUTA), state unemployment tax (SUTA) , state unemployment insurance (SUI) and Federal Insurance Contributions Act (FICA) taxes without deducting these funds from your employees’ paychecks.

These are all important aspects of payroll. Luckily, some online calculators let you crunch FUTA, FICA, SUTA and SUI numbers. Find out when you have to issue payroll tax payments in adherence with your state laws. Also, you must report new hires to the IRS and file your federal business taxes quarterly and annually. These steps, combined with the calculations involved in withholding, reporting and paying payroll taxes, can take several hours per pay cycle, especially when the process isn’t automated.

Payroll checklist: What you need to process payroll

With a road map to follow and an overview of the important steps involved, it’s also important to understand exactly what payroll forms you need from each employee. Payroll is complicated, and it’s easy to get lost in the details of how everything works. Use the checklist below to overview the information you should gather before processing each pay period’s payroll.

Tax information

• Employer identification number
• State tax ID information
• I-9 for each employee
• W-4 for each employee
• 1099 for each contractor or freelancer (if applicable)

Employee information

• Hours worked
• Hourly wage
• Overtime hours worked
• Preferred payment delivery method (if applicable)

Recordkeeping system

• Reliable storage for pay stubs and tax information

How to do payroll in Excel 

Processing payroll in Excel may take some time, depending on your knowledge of payroll and your familiarity with the software. Many small business owners use Excel to track budgets and other financial information, and it’s a useful tool for processing payroll as well.

Follow these steps to do payroll in Excel:

Step 1: Download a payroll calculator template. 

Step 2: add tabs for every column needed for your specific payroll calculator..

Once you have your spreadsheet downloaded, begin to customize based on your needs. You can also start with a blank Excel sheet if you prefer to start from scratch. Example tabs include:

Step 3: Enter the payroll data for each employee into the appropriate columns.

Start without formulas and then add calculations after all the initial data has been entered.

A few common payroll calculations include:

• Gross pay = (pay per hour x total hours worked) + (overtime pay per hour x total overtime hours)
• Income tax = (gross pay x income tax percentage)
• Net pay = gross pay – (income tax + other deductibles)

Step 4: Once it’s “processed,” create individual pay stubs by using a pay stubs template.

Pay stubs allow you to track how much each employee is paid each pay period.

How to set up payroll in QuickBooks

QuickBooks provides a full payroll suite to add to your services. Should you add this aspect to your QuickBooks accounting program, you can follow these easy steps to process payroll in QuickBooks and manage your financial information in one place. [Read related article: QuickBooks Payroll review ]

If you are not signed up for QuickBooks payroll, you’ll need to do that first through your QuickBooks account. Once signed up, you must know your software tier (Core, Premium or Elite). 

If you don’t know what tier you have, you can sign in to your account, go to settings, and select subscriptions and billing. The payroll plan tier is in the second box.

Elite users can use a QuickBooks expert to guide you through the setup process, or they can even do it for you. Simply call to schedule an appointment.

Step 1: Gather all the information you need before starting to work with QuickBooks.

You should have access to the following:

• Employees’ individual details
• Employees’ pay rates
• Any payroll deductions
• Completed direct deposit authorization forms and voided checks
• Bank account login ID and password for your business
• Basic business information

Gather additional information, such as your federal EIN, state withholding numbers and workers’ comp policies, to ensure your payroll taxes are automatically and accurately deducted from employees’ paychecks.

Step 2: Select “Get started” and follow the prompts.

• Select if you (or someone else) paid employees in the current year.
• Select the date when you want to start paying your employees through QuickBooks.
• Enter your main business address. Enter a physical address (not a P.O. box).  The work location determines your tax responsibilities. If you have multiple work locations, you can add those later when you add your employees. 
• Enter your main payroll contact info. This is generally the person responsible for paying your employees. The payroll contact will get important notifications from you and may speak with your payroll experts about your account. 
• Select how you’ve run your payroll in the past. Depending on your answer, you may be able to import employee and pay history info instead of entering it manually. 

Step 3: Add your employees by choosing “Add your team.”

When you add your employees, you can pay them immediately with a paper check, or you can opt out and pay them later.

If you pay employees immediately, you are responsible for any payroll taxes due until you complete the payroll setup.

If you have paid employees already this year, you must complete additional tasks through the Payroll/Overview tab in QuickBooks before you can run payroll.

Step 4: Finish setup tasks.

To finish setup, you must finish the last three sections: “Get ready to pay your team,” “Let’s handle your taxes” and “Take care of your team.”

• Add your team.
• Enter your tax info.
• Connect your bank.
• Add your payroll history, if you’ve already paid employees this year.
• Set your tax preferences, if you haven’t paid any employees this year.
• Include which taxes you’ve paid this year. 
• Take care of your team.

Step 5: Add a workers’ comp policy to your QuickBooks account.

If you don’t have a workers’ comp policy, QuickBooks can help you find one, or you can choose to add one later.

Workers’ compensation laws vary from state to state. If unsure of your state’s laws, consider contacting a CPA, attorney or insurance agent to meet compliance requirements.

Why do you need a payroll system?

The most obvious reason is that you need to pay people who work for your company. It’s easy to pay employees once a job is complete, but having a proper system mitigates risk and vastly improves your business operations.

It may sound counterintuitive, but payroll systems aren’t just about paying employees. Payroll processing is a detailed documentation system that tracks who works for your company, how long they’ve worked for you and how much money you spend on labor. Terms like “payroll processing” and “payroll system” can complicate this, but it’s quite simple.

If you work with a payroll provider, your “system” is automatically set up through the company. If you’re on your own, you’ll have to set up your own system. The point of this system is documentation.

Here’s a list of things your payroll system should do:

• Track employee hours 
• Track employee wages
• Track deductions and other withholdings
• Keep tax documents organized
• Track direct deposits and payments

How to create your own payroll system

Creating a payroll system with steps to follow is all about organization and planning. Once your system is set up, information and documentation will flow through it, and you can report on important business aspects.

Follow these steps as you plan your payroll system and decide how to structure employee payments:

• Find your EIN through the IRS.
• Establish state and local tax ID numbers.
• Collect employee financial information like W-4 and 1099 forms.
• Choose a weekly, biweekly, semiweekly or monthly payroll system.
• Establish payroll tax payment dates.
• Calculate employee hourly schedules and overtime pay.
• Calculate gross pay for each employee.
• Determine deductions and subtract from gross pay.
• Calculate net pay and issue payment.
• Keep and document payroll records.
• Report new hires to the IRS.
• Stay current on any miscalculations or mistakes, which should be documented and eventually reported to the IRS.

This general road map encapsulates how to set up your payroll system and process payroll. If you’ve created a system that addresses all these needs in an organized fashion, you’re on your way to successful payroll.

Alternatives to processing payroll yourself

Use a payroll service to run payroll..

Even if your company is small, processing payroll can be challenging. It takes time to gather employees’ information, calculate their gross and net pay, and ensure you’re withholding the right amount for state and federal taxes each pay period. It also takes a lot of time and effort to track payroll records organizationally and efficiently.

If you’re a small business owner with several employees, investing in the best online payroll provider that can help you manage this whole process may be useful. Payroll providers take the legwork out of paying your employees. Many also have employee access portals so that your workers can view their pay stubs, track their deductions and make tax adjustments when necessary.

Processing payroll manually may make sense if you have a tiny business with only a few employees and feel confident in your ability to calculate pay, deductions and allowances correctly. If you run a rapidly growing and dynamic small business, it’s likely best to partner with a payroll provider, such as Gusto or ADP. [See Gusto review and ADP Payroll review .] Most companies charge a monthly fee or take a small percentage of your payroll. If you are looking for flexible payroll options, read our review of OnPay .

Hire an accountant to manage payroll.

Whether you run a large or small business, keeping track of your payroll can be tedious and overwhelming. Hiring a professional accountant may seem out of reach, but the costs could be worth the return.

An accountant not only keeps your books up to date but can also manage your tax deadlines and compliance responsibilities – and an accountant who specializes in payroll can minimize costly errors. Plus, having an accountant in place as you scale can add value to your company culture, help you exceed industry standards and help you achieve your overall goals.

Julie Thompson and Max Freedman contributed to this article.

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Delivery Service Business Plan Template

Written by Dave Lavinsky

Delivery Service Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their delivery service companies.

If you’re unfamiliar with creating a delivery service business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a delivery service business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Delivery Service Business Plan?

A business plan provides a snapshot of your delivery service business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.  

Why You Need a Business Plan for a Delivery Service

If you’re looking to start a delivery service business or grow your existing delivery service company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your delivery service business to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.  

Sources of Funding for Delivery Businesses

With regards to funding, the main sources of funding for a delivery service business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for delivery service companies.

How to Write a Business Plan for a Delivery Service Business

If you want to start a delivery service business or expand your current one, you need a business plan. The sample below details the necessary information for how to write each essential component of your delivery service business plan.  

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of delivery service business you are running and the status. For example, are you a startup, do you have a delivery service business that you would like to grow, or are you operating a chain of delivery service businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the delivery service industry.
• Discuss the type of delivery service business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of delivery service business you are operating.

For example, you might specialize in one of the following types of delivery service businesses:

• Courier Delivery Services : This type of business provides air, ground, or combined courier delivery services.
• Express Messenger Services : This type of business provides express messenger and delivery services.
• Package Delivery Services : This type of business delivers parcels, documents. and packages.
• Packing and Sorting Services : This type of business prepares items to be delivered.
• Transporting and Trucking Services : This type of delivery business transports items via truck.

In addition to explaining the type of delivery service business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of delivery drivers you employ, the number of items delivered, reaching X number of clients served, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the delivery service industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the delivery service industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the delivery service industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your delivery service business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your delivery service business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of delivery service business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Delivery Service Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your business plan today.

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other delivery businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other third-party delivery services, ship-to-store services, and other types of delivery services. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of delivery service business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide options for local and long distance delivery?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a delivery service, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of delivery service company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide express delivery, air transit courier services, or long distance delivery services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your delivery service company. Document where your company is situated and mention how the site will impact your success. For example, is your delivery service business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your delivery service marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your delivery service business, including answering calls, scheduling pick up and delivery of items, managing drivers, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to reach your X number of deliveries made, or when you hope to reach $X in revenue. It could also be when you expect to expand your delivery service business to a new city.  

Management Team

To demonstrate your delivery service business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing delivery businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a delivery service business.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.  

Income Statement

In developing your income statement, you need to devise assumptions. For example, will you schedule 5-10 deliveries per driver per day and have 6 drivers? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.  

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your delivery service business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.  

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a delivery service business:

• Cost of equipment and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of geographic locations you serve.  

Writing a business plan for your delivery company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert delivery service business plan; download it to PDF to show banks and investors. You will understand the delivery service industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful delivery service business.  

Delivery Service Business Plan FAQs

What is the easiest way to complete my delivery service business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your delivery service business plan.

How Do You Start a Delivery Service Business?

Starting a delivery service business is easy with these 14 steps:

• Choose the Name for Your Delivery Service Business
• Create Your Delivery Service Business Plan
• Choose the Legal Structure for Your Delivery Service Business
• Secure Startup Funding for Your Delivery Service Business (If Needed)
• Secure a Location for Your Business
• Register Your Delivery Service Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Delivery Service Business
• Buy or Lease the Right Delivery Service Business Equipment
• Develop Your Delivery Service Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Delivery Service Business
• Open for Business

Learn more about how to start your own delivery service business . 

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s business planning advisors can create your business plan for you.  

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Internet data centers are fueling drive to old power source: Coal

CHARLES TOWN, W.Va. — A helicopter hovers over the Gee family farm, the noisy rattle echoing inside their home in this rural part of West Virginia. It’s holding surveyors who are eyeing space for yet another power line next to the property — a line that will take electricity generated from coal plants in the state to address a drain on power driven by the world’s internet hub in Northern Virginia 35 miles away.

There, massive data centers with computers processing nearly 70 percent of global digital traffic are gobbling up electricity at a rate officials overseeing the power grid say is unsustainable unless two things happen: Several hundred miles of new transmission lines must be built, slicing through neighborhoods and farms in Virginia and three neighboring states. And antiquated coal-powered electricity plants that had been scheduled to go offline will need to keep running to fuel the increasing need for more power, undermining clean energy goals.

“It’s not right,” said Mary Gee, whose property already abuts two power lines that serve as conduits for electricity flowing toward the biggest concentration of data centers — in Loudoun County, home to what’s known as Data Center Alley. “These power lines? They’re not for me and my family. I didn’t vote on this. And the data centers? That’s not in West Virginia. That’s a whole different state.”

The $5.2 billion effort has fueled a backlash against data centers through the region, prompting officials in Virginia to begin studying the deeper impacts of an industry they’ve long cultivated for the hundreds of millions of dollars in tax revenue it brings to their communities.

Critics say it will force residents near the coal plants to continue living with toxic pollution, ironically to help a state — Virginia — that has fully embraced clean energy. And utility ratepayers in the affected areas will be forced to pay for the plan in the form of higher bills, those critics say.

But PJM Interconnection, the regional grid operator, says the plan is necessary to maintain grid reliability amid a wave of fossil fuel plant closures in recent years, prompted by the nation’s transition to cleaner power.

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Power lines will be built across four states in a $5.2 billion effort that, relying on coal plants that were meant to be shuttered, is designed to keep the electric grid from failing amid spiking energy demands.

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Cutting through farms and neighborhoods, the plan converges on Northern Virginia, where a growing data center industry will need enough extra energy to power 6 million homes by 2030.

With not enough of those green energy facilities connected to the grid yet, enough coal and natural gas energy to power 32 million homes is expected to be lost by 2030 at a time when the demand from the growing data center industry, electric vehicles and other new technology is on the rise, PJM says.

“The system is in a major transition right now, and it’s going to continue to evolve,” Ken Seiler, PJM’s senior vice president in charge of planning, said in a December stakeholders’ meeting about the effort to buy time for green energy to catch up. “And we’ll look for opportunities to do everything we can to keep the lights on as it goes through this transition.”

A need for power

Data centers that house thousands of computer servers and the cooling equipment needed for them to run have been multiplying in Northern Virginia since the late 1990s, spreading from the industry’s historic base in Loudoun County to neighboring Prince William County and, recently, across the Potomac River into Maryland. There are nearly 300 data centers now in Virginia.

With Amazon Web Services pursuing a $35 billion data center expansion in Virginia, rural portions of the state are the industry’s newest target for development.

The growth means big revenue for the localities that host the football-field-size buildings. Loudoun collects $600 million in annual taxes on the computer equipment inside the buildings, making it easier to fund schools and other services. Prince William, the second-largest market, collects $100 million per year.

But data centers also consume massive amounts of energy.

One data center can require 50 times the electricity of a typical office building, according to the U.S. Department of Energy. Multiple-building data center complexes, which have become the norm, require as much as 14 to 20 times that amount.

The demand has strained utility companies, to the point where Dominion Energy in Virginia briefly warned in 2022 that it may not be able to keep up with the pace of the industry’s growth.

The utility — which has since accelerated plans for new power lines and substations to boost its electrical output — predicts that by 2035 the industry in Virginia will require 11,000 megawatts, nearly quadruple what it needed in 2022, or enough to power 8.8 million homes.

The smaller Northern Virginia Electric Cooperative recently told PJM that the more than 50 data centers it serves account for 59 percent of its energy demand. It expects to need to serve about 110 more data centers by July 2028.

Meanwhile, the amount of energy available is not growing quickly enough to meet that future demand. Coal plants have scaled down production or shut down altogether as the market transitions to green energy, hastened by laws in Maryland and Virginia mandating net-zero greenhouse gas emissions by 2045 and, for several other states in the region, by 2050.

Dominion is developing a 2,600-megawatt wind farm off Virginia Beach — the largest such project in U.S. waters — and the company recently gained state approval to build four solar projects.

But those projects won’t be ready in time to absorb the projected gap in available energy. Opponents of PJM’s plan say it wouldn’t be necessary if more green energy had been connected to the grid faster, pointing to projects that were caught up in bureaucratic delays for five years or longer before they were connected.

A PJM spokesperson said the organization has recently sped up its approval process and is encouraging utility companies and federal and state officials to better incorporate renewable energy.

About 40,000 megawatts of green energy projects have been cleared for construction but are not being built because of issues related to financing or siting, the PJM spokesperson said.

Once more renewable energy is available, some of the power lines being built to address the energy gap may no longer be needed as the coal plants ultimately shut down, clean energy advocates say — though utility companies contend the extra capacity brought by the lines will always be useful.

“Their planning is just about maintaining the status quo,” Tom Rutigliano, a senior advocate for clean energy at the Natural Resources Defense Council, said about PJM. “They do nothing proactive about really trying to get a handle on the future and get ready for it.”

‘Holding on tight’ to coal

The smoke from two coal plants near West Virginia’s border with Pennsylvania billows over the city of Morgantown, adding a brownish tint to the air.

Nearby sits the 502 Junction substation, connected to those plants and a third one about 43 miles away via existing power lines, which will serve as a terminus for a western prong of the PJM plan for new lines that will extend to another substation in Frederick, Md., then south into Northern Virginia.

The owner of one of the Morgantown-area plants, Longview LLC, recently emerged from bankruptcy. After a restructuring, the facility is fully functioning, utilizing a solar farm to supplement its coal energy output.

The other two plants belong to the Ohio-based FirstEnergy Corp. utility, which had plans to significantly scale down operations there to meet a company goal of reducing its greenhouse gas emissions by nearly a third over the next six years.

The FirstEnergy plants are among the state’s worst polluters, said Jim Kotcon, a West Virginia University plant pathology professor who oversees conservation efforts at the Sierra Club’s West Virginia chapter.

The Harrison plant pumped out a combined 12 million tons of coal pollutants like sulfur and nitrous oxides in 2023, more than any other fossil fuel plant in the state, according to Environmental Protection Agency data. The Fort Martin plant, which has been operating since the late 1960s, emitted the state’s highest levels of nitrous oxides in 2023, at 5,240 tons.

After PJM tapped the company to build a 36-mile-long portion of the planned power lines for $392 million, FirstEnergy announced in February that the company is abandoning a 2030 goal to significantly cut greenhouse gas emissions because the two plants are crucial to maintaining grid reliability.

The news has sent FirstEnergy’s stock price up by 4 percent, to about $37 a share this week, and was greeted with jubilation by West Virginia’s coal industry.

“We welcome this, without question, because it will increase the life of these plants and hundreds of thousands of mining jobs,” said Chris Hamilton, president of the West Virginia Coal Association. “We’re holding on tight to our coal plants.”

Since 2008, annual coal production in West Virginia has dipped by nearly half, to about 82 million tons, though the industry — which contributes about $5.5 billion to the state’s economy — has rebounded some due to an export market to Europe and Asia, Hamilton said.

Hamilton said his association will lobby hard for FirstEnergy’s portion of the PJM plan to gain state approval. The company said it will submit its application for its power line routes in mid-2025.

More than 200 miles to the east in Maryland, environmental groups and ratepayer advocates are fighting an effort by PJM to extend the life of two more coal plants — Brandon Shores and Herbert A. Wagner — just outside of Baltimore, which were slated to close by June 2025.

PJM asked the plants’ owner, Texas-based Talen Energy Corp., to keep them running through 2028 — with the yet-to-be determined cost of doing so passed on to ratepayers.

That would mean amending a 2018 federal court consent decree, in which Talen agreed to stop burning coal to settle a lawsuit brought by the Sierra Club over Clean Water Act violations. The Sierra Club has rejected PJM’s calls to do so.

“We need a proactive plan that is consistent with the state’s clean energy goals,” said Josh Tulkin, director of the Sierra Club’s Maryland chapter, which has proposed an alternative plan to build a battery storage facility at the Brandon Shores site that would cut the time needed for the plants to operate.

A PJM spokesperson said the organization believes that such a facility wouldn’t provide enough reliable power and is not ruling out seeking a federal emergency order to keep the coal plants running.

With the matter still unresolved, nearby residents say they are anxious to see them closed.

“It’s been really challenging,” said John Garofolo, who lives in the Stoney Beach neighborhood community of townhouses and condominiums, where coal dust drifts into the neighborhood pool when the facilities are running. “We’re concerned about the air we’re breathing here.”

Sounding alarms

Keryn Newman, a Charles Town activist, has been sounding alarms in the small neighborhoods and farm communities along the path of the proposed power lines in West Virginia.

Newman, who in the late 2000s waged a successful campaign to stop a plan for a 765-kilovolt line extending through the area into Maryland before the data center boom, sees the battle in terms of the more affordable, quieter lifestyle she and her neighbors cherish.

Because FirstEnergy prohibits any structure from interfering with a power line, building a new line along the right of way — which would be expanded to make room for the third line — would mean altering the character of residents’ properties, Newman said.

“It gobbles up space for play equipment for your kid, a pool or a barn,” she said. “And a well or septic system can’t be in the right of way.”

A FirstEnergy spokesperson said the company would compensate property owners for any land needed, with eminent domain proceedings a last resort if those property owners are unwilling to sell.

Some have accepted that more power lines will come through and seem open to selling to FirstEnergy and moving away.

Pam and Gary Gearhart fought alongside Newman against the defeated 765-kilovolt line, which would have forced them to move a septic system near FirstEnergy’s easement. But when Newman showed up recently to their Harpers Ferry-area neighborhood to discuss the new PJM plan, the couple appeared unwilling to fight again.

Next door, another family had already decided to leave, the couple said, and was in the midst of loading furniture into a truck when Newman showed up.

“They’re just going to keep okaying data centers; there’s money in those things,” Pam Gearhart said about local governments in Virginia benefiting from the tax revenue. “Until they run out of land down there.”

In Loudoun County, where the data center industry’s encroachment into neighborhoods has fostered resentment, community groups are fighting a portion of the PJM plan that would build power lines through the mostly rural communities of western Loudoun.

The lines would damage the views offered by surrounding wineries and farms that contribute to Loudoun’s $4 billion tourism industry, those groups say.

Bill Hatch owns a winery that sits near the path of where PJM suggested one high-voltage line could go, though that route is still under review.

“This is going to be a scar for a long time,” Hatch said.

Reconsidering the benefits

Amid the backlash, local and state officials are reconsidering the data center industry’s benefits.

The Virginia General Assembly has launched a study that, among other things, will look at how the industry’s growth may affect energy resources and utility rates for state residents.

But that study has held up efforts to regulate the industry sooner, frustrating activists.

“We should not be subsidizing this industry for another minute, let alone another year,” Julie Bolthouse, director of land use at the Piedmont Environmental Council, chided a Senate committee that voted in February to table a bill that would force data center companies to pay more for new transmission lines.

Loudoun is moving to restrict where in the county data centers can be built. Up until recently, data centers have been allowed to be built without special approvals wherever office buildings are allowed.

“They’re great neighbors, great taxes, all that sort of thing,” Phyllis Randall (D), chair of the county board, said about the industry before a February vote to set that plan in motion. “But somehow, someway, it started to get away from us.”

But such action will do little to stem the worries of people like Mary and Richard Gee.

As it is, the two lines near their property produce an electromagnetic field strong enough to charge a garden fence with a light current of electricity, the couple said. When helicopters show up to survey the land for a third line, the family’s dog, Peaches, who is prone to seizures, goes into a barking frenzy.

An artist who focuses on natural landscapes, Mary Gee planned to convert the barn that sits in the shadow of a power line tower to a studio. That now seems unlikely, she said.

Lately, her paintings have reflected her frustration. One picture shows birds with beaks wrapped shut by transmission line. Another has a colorful scene of the rural Charles Town area severed by a smoky black and gray landscape of steel towers and a coal plant.

“It feels like harassment,” Gee said. “But there’s no one we can call for help.”

A previous version of this article incorrectly reported that Prince William County receives $400 million annually in taxes on the computer equipment inside data centers. It receives $100 million annually. In addition, the article incorrectly stated that two FirstEnergy plants in West Virginia have been equipped with carbon-capturing technology. They do not have such technology in place, The article has been corrected.

About this story

Map sources: Proposed transmission line data provided by Piedmont Environmental Council based on information made available by PJM . The transmission line plan depicts general paths selected by PJM; the final routes will be determined by the utility companies. Existing transmission lines via the EIA U.S. Energy Atlas . Data center locations in Virginia provided by the Data Center Map . Other cartographic data via U.S. Geological Survey and OpenStreetMap.

Story editing by Jennifer Barrios . Copy editing by Thomas Heleba and Shay Quillen. Design and development by Carson TerBush . Design editing by Christian Font and Betty Chavarria . Photo editing by Mark Miller . Visual editing by Tara McCarty . Maps by Laris Karklis . Graphics editing by Kate Rabinowitz .