business plan ideas for entrepreneurs

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

50 Best Small-Business Ideas to Start in 2024

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

The best small business to start is one that fills a market need or offers a unique product, service or solution. But a winning idea also plays to your strengths and interests.

This list of business ideas can help you brainstorm your next move. From there, you can take preliminary steps, like conducting a market analysis and calculating potential startup costs .

Potentially easy business ideas may have smaller price tags; consulting, tutoring, personal training and pet sitting are businesses you can likely launch with less than $1,000 in your pocket. Other endeavors will require significant capital. Either way, expect to work hard and invest a lot of time — so choose an idea you’re passionate about.

» MORE: How to start a business in 15 steps

50 best small businesses to start

1. accounting and bookkeeping.

Are you a licensed CPA or a business accounting software wizard? Use your expertise to help other entrepreneurs keep their personal and business finances in order.

As a bookkeeper, you'll process invoices and payroll, compile expense reports and more. If you have a CPA license, you can help business owners file taxes, generate balance sheets and other accounting documents and make your professional recommendations about your client’s bottom line.

2. Business consulting

If you’ve been in the business world for a long time, folks might be clamoring for your knowledge and expertise within your industry. Why not turn all that know-how into a new career as an independent consultant? You can get paid to speak at industry conferences or events, serve on a board of advisors for a fledgling business or lend your expertise to shape the strategy of an existing business on a contract basis.

» MORE: How to start a consulting business

3. Marketing services

As an independent marketing professional, you can work with small businesses who don’t have the in-house bandwidth to execute their marketing plans. Write their blogs, firm up their SEO strategy, generate ad campaigns and deploy inbound marketing tactics.

4. Real estate business

If property is your passion, start your own real estate agency, working with businesses or private citizens to find the office space, house or apartment that's right for them.

You can also buy property of your own (if you have the business funding, of course) and become a property manager or landlord, renting out residential or office space to tenants, maintaining the property and serving as their point of contact for any potential issues.

5. Event planning

Event planners manage the design, logistics and coordination of a variety of major events, from corporate retreats and fundraisers to weddings and birthday parties. If you’re detail-oriented and have a roster of vendor connections, offer your services to businesses and families in your community or personal network.

6. Video production

Demand for those who can shoot, edit and package videos is high. And a video production business can meet many needs — like wedding or event videos, brand and marketing content or social media videos for TikTok or Instagram — or focus on one specific niche.

7. Podcasting

For those who have something to say or important stories to tell, you might consider starting a podcasting business. With the popularity of podcasts from newspapers and other media providers, private individuals have been able to jump on the trend — turning a hobby into a fully fledged business.

Podcasting will require an initial investment in some audio equipment and editing software. But once you get started, you'll be able to grow as fast as you can talk, produce, and of course market your podcast. Moreover, if you're specifically interested in online business ideas , podcasting can be done from home, and completely online.

8. IT consulting

Do you have experience with computers and other types of technology? If so, use this knowledge to your advantage and consider starting an IT consulting business. With limited budgets and resources, many small businesses are apt to hire an outside consultant to help assist them with installing, managing, updating, and troubleshooting their technology. As an IT consultant, you can offer remote services as well as on-site assistance, giving you freedom and flexibility while working in a field that's in high demand.

9. Catering

If you're a professional chef but tired of the restaurant grind, starting a catering service is a great opportunity to strike out into the world of self-employment. You’ll need access to a commercial kitchen, a part-time staff of servers and a couple of assistant cooks to start. But compared to opening your own restaurant, the overhead costs of starting and running a catering company are much more manageable.

10. Social media management

Social media marketing is a marketing specialty that most business owners know they need, but few are capable of doing well. If you’re on top of the latest TikTok and Instagram trends, have a knack for creating viral videos or can convert social views into sales, consider cultivating a client base of business owners who need help managing their brand’s social media platforms.

» MORE: 5 simple ways to step up your business’s TikTok game

11. Business planning service

One of the best small-business ideas for seasoned business owners ready for their next venture is a business planning service. You can offer guidance and networking connections as businesses seek funding or scale, and provide services for startups like writing a business plan — including business funding plans, market analysis and competitor research.

12. Tax consulting

Filing and staying on top of business taxes can be one of the most complicated parts of running a business, so if you have experience in all things tax-related (and are a CPA or enrolled agent), business owners will be willing to hire you for your services. Plus, unlike individual taxes, many businesses are going to need a tax advisor to support them year-round, meaning your services will be in demand through tax season and beyond.

Ready to get started? Here's what to do next

Open a business bank account.

Start keeping the books.

Build your website.

Protect yourself from liability.

13. PR agency

Have a background in public relations and an extensive network of media and business contacts? Consider striking out on your own and offer your services to other small businesses. Your agency can assist entrepreneurs and companies with their public image and presence — including business marketing, events, press releases, outreach and more. If you have a network of contacts in a specific industry, your services will be even more attractive to businesses in that industry.

Plus, you can start your own PR business without too much initial financial investment and can bring on employees or rent office space as it grows.

14. Professional organizing

Organizing professionals work with businesses and individuals alike to offer tips and strategies for organization based on their space, as well as get hands-on and help them sort through the clutter. With the time and effort it often takes to clean up a room, house or office, professional organizing has become a service that people are willing to pay for.

15. Photography

Professional photographers are in high demand for weddings, corporate events, family portraits and more. Plus, because you can build this business out of your home (with the right tools, of course), a freelance photography business has relatively low startup costs. Moreover, you're in charge of your client load and schedule, so professional photography is a great way to build a side hustle while working full time elsewhere.

» MORE: How to start a photography business

16. Event space

Take a look at your local market: If there's a demand for weddings, birthdays, corporate events and fundraisers, but few venues to host those events, seize the opportunity and start an event space yourself. You can offer planning services along with the venue, or partner up with another local event-planning business to become the ultimate party-planning team.

17. Interior decorating

Rather than redecorating your living room for the 14th time, apply your love of design to an interior decorating business . To start out, leverage your personal network to offer help decorating residential and commercial spaces. You can charge an hourly fee to clients for your work, partner with your favorite furniture stores or manufacturers to work on commission or do a combination of the two.

18. Woodworking or furniture building

Do you love working with your hands to build beautiful, custom furniture? Start your own custom woodworking business. You can take commissions, focus on a set of in-demand items or sell semi-custom options via Etsy or another online platform. You might start working weekends out of your garage, but as your business takes off, you’ll be well on your way to your own shop and a brand new, full-time career doing what you love.

» MORE: How to start an Etsy shop in 8 steps

19. Graphic design

With just a few handy computer programs — think Adobe, Sketch or Canva — you could be operating this lucrative business out of your home in weeks. You do need to find clients though, so try networking with small businesses in your community. Everyone could use a well-designed website, online materials, email campaigns, physical print work and more.

20. Clothing boutique

For the fashion-forward entrepreneurs out there, consider opening your own clothing boutique. Although you'll need some startup funding for this business idea , it can be successful if you find the perfect inventory and right market. Competing against large clothing retailers can be challenging, but if you can find a specific niche, like starting a T-shirt business or locally based store, you can use your creativity to stand out amongst all of the other generic options out there.

21. Bed and breakfast

Do you live in an interesting tourist destination? Does your home have a guest house, mother-in-law suite or even just a spare bedroom? Do you love to cook and entertain guests? If so, one of the best small business ideas for you might be to turn your home into your own B&B. Sites like VRBO and AirBnB have made it easier than ever to market your home to travelers in need, and you may even make new friends along the way.

22. Food truck

Food trucks are hugely popular, often offering unique, specialty foods that might not sell as easily in brick-and-mortar restaurants. Take your mom’s famous dumpling recipe or your off-the-wall dessert idea and hit the road to local events, farmer’s markets, your local town square, large corporate complexes at the lunchtime rush — wherever you’re likely to draw a crowd. Keep in mind that to run a food truck , you usually have to meet a special set of ordinances and safety compliance standards, so contact your local health department to determine what your mobile restaurant will require.

» MORE: Best point-of-sale systems for food truck businesses

23. Restaurant or cafe

Opening a restaurant is one of the more risky and expensive business ideas on our list. But if you're truly culinarily (and entrepreneurially) ambitious, the risk may be worth the rewards. Restaurateurs can test the waters with popups or a ghost kitchen before investing in a full-fledged brick-and-mortar deli, diner, cafe or full-service restaurant. Or you can open a franchise of an established restaurant chain, and reap the benefits of an already popular brand.

24. Craft brewery

Craft breweries, aka microbreweries, are booming in the United States. So, if you've been tinkering with beer-brewing in your garage, calling it official and opening up a microbrewery can be a great way to monetize your hobby.

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.

25. Ice cream shop

Ice cream shops are the perfect small town or neighborhood business idea — though this type of business can be prone to big seasonal revenue fluctuations. You will need some funding to get this kind of endeavor started, but an ice cream shop typically requires less of an investment than other food-service businesses.

26. Personal chef

Similar to a catering business, but less involved and perhaps more flexible, you might start your own business as a personal chef. You can use your culinary expertise to cook for families or individuals, as well as help them with meal planning and recipes. With this kind of service business, you'll get more personal with your cooking, giving you the opportunity to work one-on-one with all different kinds of people and navigating their dietary restrictions, likes and dislikes.

27. Landscape services

If you have a green thumb and an eye for design, starting a landscaping business could be your next move. You'll mow lawns, plant and maintain flowers, trees and shrubs, and even design elaborate landscape plans for homes and office complexes.

28. Pet grooming

Animal enthusiasts can probably think of nothing better than hanging out with pets all day. It might take some time to build up the funding to open up your own pet-grooming facility. So, keep overhead low in the beginning by offering a mobile service, and bring your grooming skills and tools directly to your clients' homes. You can also offer dog walking services to supplement your grooming business.

29. Florist

If you have a green thumb and eye for arrangements, open a flower shop and use your skills to connect with your community. In addition to creating beautiful bouquets, florists can also design big-ticket arrangements for weddings and events, or host in-person or virtual flower arranging classes.

» MORE: How to start a florist business

30. Massage therapist

As an occupation, massage therapy is in high demand: The U.S. Bureau of Labor Statistics predicts an 18% growth in massage therapy jobs between 2022 and 2032, a much higher rate than average.

You’ll need special training and licensing to legally operate as a massage therapist, so check your state requirements to make sure you’re operating within local laws. But once you’ve jumped through the licensing hoops, you’ll be free to open an in-home studio, travel to your clients or eventually open your own facility.

» MORE: Business insurance for massage therapists

31. Nutritionist

Nutritionists can help clients improve their relationship with food and build health goals and habits. Launching a nutrition business requires first getting trained and certified as a registered dietician. From there, you can offer custom meal plans or virtual nutrition coaching to help people achieve their nutrition goals.

32. Personal trainer or fitness instructor

If you're the first one in the gym every morning, or dream of taking over from your yoga instructor, the next step might be to take that physical energy and put it toward becoming a licensed trainer. As a licensed personal trainer, you can offer private training sessions in your own home or in clients’ homes, lead group sessions in local parks, become a certified instructor for a whole host of workouts (Zumba, anyone?) and, eventually, even open your own fitness studio or gym.

» MORE: A step-by-step guide to starting a fitness business

33. Beauty services

The beauty profession isn’t just for trained cosmetology graduates (though a degree can help). Thanks to social media, even self-taught makeup artists can develop a following — and build a business — giving makeup tutorials on TikTok and YouTube. Opening or working in a salon, or hiring out your services for events, typically requires you to have the appropriate licenses.

34. Life coach

If you have a passion for helping people reach their true potential, becoming a life coach might be the perfect small-business idea for you. As a life coach, you'll work with clients to sort through problems or parts of their lives that they'd like to change and help them create plans to move forward and reach their goals. Although you don't necessarily need a certification to become a life coach, getting certified can help you as you start out looking for clients.

Once you've marketed your services, and your clients can attest to your skills, however, you'll be well on your way to a successful business.

» MORE: How to become a life coach

Private tutors can earn between $40 to $80 an hour, depending on your location, as well as factors like the subjects and grade levels you’re teaching. You can opt to be a solopreneur, offering freelance in-person or online tutoring. Or enlist some equally qualified, eager-to-teach partners and establish a full-service tutoring business.

36. Daycare provider

Opening a home-based daycare or full-fledged daycare center can be a solid business idea for someone who has a passion for early childhood development. You can focus on a specific teaching approach, such as Montessori, or offer language immersion if you’re fluent in another language. Read up on the licensing and reporting requirements in your area before diving in; these can vary by state, city and municipality.

» MORE: How to start a daycare

37. Senior care provider

As the baby boomer population ages, more and more senior citizens are in need of at-home care. These needs range from medically specific requirements to simple companionship or help with cooking, tidying up or transportation to and from appointments. This is a great option for anyone with nursing experience who would like to move into working for themselves.

38. Interpreter or translator

If you can speak multiple languages, this is an easy and inexpensive way to start a small business where you can utilize those skills. If you become an interpreter or translator, you can work with individuals, businesses or even simply online clients — translating meetings, phone calls, articles and more. As you work successfully with more and more clients, they'll continue to turn to you when they require these kinds of services — and you'll be continuing to grow your language abilities on top of it all.

39. Housecleaning

Everyone wants to keep a clean house. If you have a great work ethic and you’re willing to get your hands dirty, you could start a cleaning business on the cheap. Or, if you have dreams of a larger enterprise, hire a few employees or contractors and you can manage several cleaning teams. Overhead might include equipment, marketing costs and wages for personnel, but otherwise starting a cleaning service is a relatively low-cost enterprise.

Start Your Dream Business

40. Automotive repair

From oil changes and engine repairs, to tire services and bodywork, to interior and exterior deep-cleans, automotive repair businesses run the gamut of all things car-care. Alternatively, car repair businesses can focus on an automotive specialty, such as foreign cars, antique cars or specific brands. Whatever niche you choose for your car repair business, watch out for state licensing or insurance requirements to make sure your venture complies with local laws.

41. Handyman services

With a handyman (or woman) business, you can offer services ranging from small repairs and painting to more specialized trade work like plumbing, electrical, locksmith, home security installment or HVAC work. It all depends on your skill set, and on whether you have, or are willing to earn, special licensing (your state might require a contractor's license to do certain repair work). Once you've established a client base, you can hire a team of handymen with complementary skills to your own.

» MORE: How to get handyman business insurance

42. Dry cleaners

Starting a dry cleaning business will certainly require a storefront, some startup funding and supplies. But you can quickly become a go-to service in an area, especially with the right marketing and word-of-mouth recommendations.

43. Hardware store

Another local small-business staple, if you want to extend your handyman services into a storefront, you should consider opening a hardware store . When residents are doing home projects or spring cleaning, they're always going to find themselves in need of certain tools or supplies — and probably won't want to wait for online delivery. Your hardware store can service your local area and all the better if you can offer advice and tips along with the physical products you sell.

44. Self-storage business

Starting a self-storage business can be lucrative, especially close to a city — where apartments are small and people are going to need access to space to store their extra belongings. You'll certainly need the capital and real estate to get started in the self-storage game, but once you've gotten set up, it can be relatively simple to maintain this kind of business, especially once you've started bringing in clients and filling up your space.

45. Freelance copywriting and content creation

A copywriting or content creation business can be a great option for self-motivated wordsmiths who want to work from home full time. The startup cost for this business idea is low, but the time investment can be high as you build up a roster of regular clients to keep a steady income.

46. Rideshare driver

As a rideshare driver, you use your own car and mobile device and choose your own hours. If you don't mind driving, this can be a quick and easy way to make money—whether on the side or as a full-time gig.

47. Website development and design

Every business needs at least a basic website to succeed, but many business owners don’t know how to set one up for themselves. So, if you're an IT and design wizard, you'll have endless opportunities to custom-build websites. Use a platform like Upwork or Envato to gain your first clients, then use your portfolio and word-of-mouth recommendations to grow your client base (and eventually boost your prices).

48. Sell clothes online

Thanks to online marketplaces like eBay, Amazon and Etsy, and apps like Poshmark, it's easier than ever to sell custom-made, vintage or secondhand clothing online. Opening an e-commerce clothing store helps minimize overhead costs — you don’t need to lease or staff a storefront — and you can reach customers beyond your immediate area.

49. SEO consultant

Search engine optimization (SEO) is the process of improving a website or webpage's rank for specific keywords in organic search engine results. An SEO agency is tasked with improving a client's organic search results to generate more inbound visitors and thus leads for top-of-funnel keywords by optimizing the client's website, building links to the website and/or optimizing the website technically.

50. App development

Launching a successful app is no easy task — but there have never been more resources at your disposal to help you get started, including AI tools that can help with potential technological roadblocks. Whether you want to develop apps for Android or iOS, there are large markets available for games, productivity tools and much more.

Want to start a business?

NerdWallet has rounded up some of our best information on starting a business, including structuring and naming your company, creating a solid plan and much more. We’ll help you do your homework and get started on the right foot.

On a similar note...

How to make a business plan

Table of Contents

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

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

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

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

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

What is a business plan?

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

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

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

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

Business plan vs. business model canvas

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

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

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

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

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

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

Why is a business plan important?

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

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

Helps to define the business goals and objectives

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

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

Guides decision-making

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

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

Attracts investors and secures funding

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

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

Identifies potential challenges and risks

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

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

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

Provides a basis for measuring success

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

Are we where we want to be at this point?

Did we achieve our goals?

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

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

How to make a business plan step by step

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

1. Create an executive summary

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

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

2. Write your company description

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

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

3. Conduct a market analysis

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

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

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

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

4. Describe your products and services

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

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

5. Design a marketing and sales strategy

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

Pricing strategy

Advertising and promotional tactics

Sales channels

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

6. Determine budget and financial projections

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

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

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

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

8. Make an action plan

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

Types of business plans

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

Startup business plan

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

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

Strategic business plan

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

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

Operational business plan

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

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

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

Growth-business plan

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

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

One-page business plan

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

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

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

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

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

Be practical

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

Be specific

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

Be thorough with your research

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

Get input from others

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

Review and revise regularly

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

Create a winning business plan to chart your path to success

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

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

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

Get on board in seconds

Join thousands of teams using Miro to do their best work yet.

• Business Essentials
• Leadership & Management
• Credential of Leadership, Impact, and Management in Business (CLIMB)
• Entrepreneurship & Innovation
• Digital Transformation
• Finance & Accounting
• Business in Society
• For Organizations
• Support Portal
• Media Coverage
• Founding Donors
• Leadership Team

• Harvard Business School →
• HBS Online →
• Business Insights →

Business Insights

Harvard Business School Online's Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.

• Career Development
• Communication
• Decision-Making
• Earning Your MBA
• Negotiation
• News & Events
• Productivity
• Staff Spotlight
• Student Profiles
• Work-Life Balance
• AI Essentials for Business
• Alternative Investments
• Business Analytics
• Business Strategy
• Business and Climate Change
• Design Thinking and Innovation
• Digital Marketing Strategy
• Disruptive Strategy
• Economics for Managers
• Entrepreneurship Essentials
• Financial Accounting
• Global Business
• Launching Tech Ventures
• Leadership Principles
• Leadership, Ethics, and Corporate Accountability
• Leading with Finance
• Management Essentials
• Negotiation Mastery
• Organizational Leadership
• Power and Influence for Positive Impact
• Strategy Execution
• Sustainable Business Strategy
• Sustainable Investing
• Winning with Digital Platforms

How to Come Up with an Innovative Business Idea

• 21 Jul 2020

Entrepreneurship is the pursuit of opportunity beyond currently controlled resources. By definition, entrepreneurs seek to fill a need in a new way.

For aspiring entrepreneurs, however, generating strong, novel business ideas can be challenging.

If you’re interested in being an entrepreneur , brainstorming ways you can satisfy needs and solve problems is a good place to start.

Remember the golden rule of brainstorming: There are no bad ideas. As your thoughts flow, jot them down so you can later prune the list to focus on your strongest concepts.

Here are some thought-starters for coming up with innovative business ideas and examples of how entrepreneurs have used them to build successful companies.

Access your free e-book today.

How to Come Up with a Business Idea

Is there an easier way.

One place to start brainstorming potential business ideas is by asking yourself, “What task can I make easier?”

A common denominator for successful businesses is their ability to fulfill customer needs . In this case, the need is to create a product or service that makes people’s lives easier.

Related: How to Identify an Underserved Need in the Market

The most innovative businesses have flourished from simple ideas. For example, HelloFresh has taught people how to cook and provided tools to prepare meals more efficiently. It started with a need to make meal planning and grocery shopping easier. By preparing meal kits that directly fulfill busy people’s needs, this idea has seen major growth.

Check out our video on how to come up with innovative business ideas below below, and subscribe to our YouTube channel for more explainer content!

This method of creating a product to fill a need can be viewed through the lens of Harvard Business School Professor Clayton Christensen’s jobs to be done theory , which he presents in the online course Disruptive Strategy .

“A ‘job to be done’ is a problem or opportunity that somebody is trying to solve,” Christensen says. “We call it a ‘job’ because it needs to be done, and we hire people or products to get jobs done.”

Look for these kinds of opportunities in your own life. Every “job” presents an opportunity to create an easier way to get it done.

By centering your business plan on a particular need, you can increase your chances of building a profitable business.

Related: Jobs to Be Done: 4 Real-World Examples

Can I Make This More Accessible?

There are many useful products and services that aren’t readily available to the entire market, creating an opportunity to produce a similar, more accessible product offering.

The founding of Airbnb by Brian Chesky and Joe Gebbia is an example that HBS Professor William Sahlman uses in the online course Entrepreneurship Essentials .

“Chesky and Gebbia observed how hard it was to find housing during big local events,” Sahlman explains. “They decided to list online three air beds in their apartment for people coming to San Francisco for a design conference.”

From there, they added a third member to their founding team, Nathan Blecharczyk, who built the platform for connecting people with spare rooms to travelers needing a place to stay. They called it AirBed and Breakfast, which later became Airbnb .

Chesky and Gebbia noticed hotel rooms weren’t easy to book during large events, recognized a business opportunity, and devised a solution to fulfill a need for accessible, short-term lodging.

There are countless industries and companies whose offerings are inaccessible to certain market segments or during specific periods. Consider how you might fill those needs.

Related: 10 Characteristics of Successful Entrepreneurs

What Can I Improve About This?

For every successful product offering, there's a multitude of ways to make it better. Think of companies you admire and imagine how you could improve their products. As you do so, consider the following four factors.

1. Delivery Process

Your business idea doesn’t have to be entirely new—it just has to fill a need. If you can identify a more convenient way of delivering an existing service, it could be an opportunity for your business.

Uber is used as an example in Entrepreneurship Essentials . Taxis have existed for decades, but Uber delivered its services in a new, innovative way by linking drivers in their own cars to customers via an app.

This example also shows there are no limits to what type of business you can create. Your business’ ability to fulfill a need will matter more than whether it’s a brick-and-mortar or online business.

Related: 3 Effective Methods for Assessing Customer Needs

2. Location

One of the simplest improvements to a product or service is bringing it to a new location.

Returning to the Uber example in Entrepreneurship Essentials , ride-sharing company Didi was founded in China—a location Uber hadn’t yet reached. Didi used a similar platform and model as Uber but filled a location gap Uber had left open.

What products, services, or concepts have you experienced in other places that you’d like to bring to your community?

One improvement that can make a significant impact is cost. Determining how to make a high-quality equivalent to a leading product and offer it for a fraction of the price has great potential.

Home security brand Wyze was founded using this logic. After four ex-Amazon employees discovered they could produce high-quality security cameras and sell them for one-tenth the cost of leading competitors, they sold one million security cameras in their first year as a company.

It takes testing to ensure product quality isn’t sacrificed for a lower price, but finding a way to reduce the cost of an in-demand item could jumpstart your entrepreneurial journey.

4. Customer Experience

Taking an existing offering and improving the customer experience for all or a segment of the market can be a valuable way to fill a need.

One example of an organization that’s done this well is Wanderful , a platform that, similar to Airbnb, connects travelers to locals who can offer lodging and travel advice—with the provision that all users are women.

Beth Santos, founder and CEO of Wanderful, noticed that female solo travelers made up 11 percent of the travel industry , which failed to take into consideration the safety, gender norm, and cultural concerns of women traveling alone.

She improved this experience by creating a network of women that can be tapped into for lodging, travel advice, or just a friendly face in a new location. Wanderful has since expanded its mission to give female and non-binary travelers voices in the travel industry through conferences, communities, and recognition programs.

If there’s an opportunity to improve the experience of a specific group of people, act on it and see where the opportunity leads.

Related: 6 Questions to Ask Before Starting a Business

Is It Time to Pivot?

When starting a business, you may need to pivot from your original idea as new needs arise in the market.

For instance, Jebbit , a tech startup that originally offered a platform to pay students for the advertisements they watched, saw a rising need for privacy and consent in the consumer data space. It pivoted to create a platform for secure, declared customer data.

Another instance in which it makes sense to pivot is during technological evolution.

In Disruptive Strategy , Christensen explains that technological advancements can be either sustaining or disruptive innovations , depending on how they impact your company.

Take Netflix : The service was created to allow people to watch movies without going to the video store and accomplished this by mailing DVDs to customers’ homes with prepaid return envelopes.

When streaming came on the scene in 2007, Netflix implemented the new technology into its business model and has continued to adapt as it’s evolved. Because Netflix was able to adopt new technology to continue serving its customers, streaming was a sustaining innovation.

In the case of video store Blockbuster , streaming was a disruptive innovation that it tried but couldn’t affordably adopt. It ultimately led the business to shut down.

When technological advancements arise, think of how your current business model could shift to use innovation as a sustaining force.

More Examples of Innovative Business Ideas

As you think of ideas for businesses, take inspiration from the world around you. Analyze the foundational needs other businesses have fulfilled for society and how they’ve adapted to what customers want.

Remember: As a future business owner, it’s critical to understand your company’s core mission. Focusing on that can help align your startup ideas and provide a greater chance for success.

To gain even more insight and inspiration, consider the following examples, which show how diverse your business model and mission can be.

Notarize , the first online platform for legally signing and notarizing documents is just one example of an online startup that discovered an overlooked need. For many, it’s a hassle to find a notary public to sign a document in person. This prompted Pat Kinsel, founder and CEO of Notarize, to make this difficult, but necessary, task more convenient.

"It really struck me that notarized documents are often some of the most important things people sign, and yet, we have this system that’s 100 years old," Kinsel said in an interview with Inc .

Kinsel designed the Notarize app to connect people to licensed notary publics via video chat so they can see their documents signed in real time.

This need for notarized documents seemed to be a common, but overlooked, need for many professionals. By thinking outside the box, Notarize seized a business opportunity and brought it to its fullest potential.

The development of Starbucks under former chairman and CEO Howard Schultz is another example that highlights how to efficiently choose locations for your brick-and-mortar.

“Schultz admired the sidewalk coffee shops he’d visited in Italy and decided he would introduce the same basic idea in the United States,” Sahlman says in Entrepreneurship Essentials. “That venture became Starbucks.”

Now, it’s rare to walk a few blocks without seeing a Starbucks on a corner. Strategic locations within high traffic routes created a customer base that’s made Starbucks an essential part of their lives.

Perhaps one of the most well-known companies in the world, Amazon is a prime example of fulfilling people’s need for convenience.

This e-commerce business made it the norm to buy items online—including books, music, movies, housewares, and electronics—and have them quickly and conveniently delivered.

Think Like an Entrepreneur

Coming up with an innovative business idea isn’t difficult if you’re observant. By asking yourself key brainstorming questions, you can generate a list of business ideas that fill market needs, improve existing products, and make daily life easier and more enjoyable.

Do you want to turn an idea into a viable venture? Explore our four-week Entrepreneurship Essentials course, six-week Disruptive Strategy course, and other online entrepreneurship and innovation courses to discover how you can harness the power of innovation. Download our free course flowchart to determine which best aligns with your goals.

This post was updated on September 19, 2022. It was originally published on July 21, 2020.

About the Author

11.4 The Business Plan

Learning objectives.

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

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

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

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

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

Business Plan Overview

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

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

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

Purposes of a Business Plan

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

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

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

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

Link to Learning

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

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

Types of Business Plans

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

Brief Business Plan or Executive Summary

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

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

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

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

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

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

Are You Ready?

Create a brief business plan.

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

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

Full Business Plan

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

Executive Summary

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

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

Business Description

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

Industry Analysis and Market Strategies

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

Competitive Analysis

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

Operations and Management Plan

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

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

Marketing Plan

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

Financial Plan

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

Entrepreneur In Action

Laughing man coffee.

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

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

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

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

What Can You Do?

Textbooks for change.

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

Work It Out

Franchisee set out.

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

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

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

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

As an Amazon Associate we earn from qualifying purchases.

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/entrepreneurship/pages/1-introduction

• Authors: Michael Laverty, Chris Littel
• Publisher/website: OpenStax
• Book title: Entrepreneurship
• Publication date: Jan 16, 2020
• Location: Houston, Texas
• Book URL: https://openstax.org/books/entrepreneurship/pages/1-introduction
• Section URL: https://openstax.org/books/entrepreneurship/pages/11-4-the-business-plan

© Jan 4, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

Business Plans: A Step-by-Step Guide for Kid Entrepreneurs

• March 21, 2024

Embarking on an entrepreneurial journey is exciting for kids, offering them a unique opportunity to learn valuable life skills such as problem-solving, financial literacy, and creativity. Creating a business plan is a foundational step in this journey, helping young entrepreneurs transform their ideas into actionable plans. This guide is designed to make the process engaging and accessible for kids and their parents, laying the groundwork for successful kidpreneur ventures.

Why Creating a Business Plan Matters for Kidpreneurs

A business plan is more than just a document; it’s a roadmap that guides Kidpreneurs through the stages of developing and growing their business. It encourages them to think critically, set realistic goals, and plan for the future. Crafting a business plan helps Kidpreneurs understand the basics of entrepreneurship and financial management, fostering a mindset geared towards growth and innovation.

Step 1: Discover Your Passion and Identify a Business Idea

The first step is for Kidpreneurs to explore their interests and talents, leading them to a business idea that excites them. Encourage them to think about problems they’d like to solve or hobbies they enjoy that could be turned into a business. This ideation process is crucial for finding a venture they’re passionate about and committed to developing.

Step 2: Research Your Market

Once a business idea is in place, the next step is understanding the market. Kidpreneurs should research who their potential customers are, what needs or wants their business could fulfill, and who their competitors might be. This step is about validating the idea and ensuring there’s a demand for what they plan to offer.

Step 3: Set Clear Goals and Objectives

Goals and objectives give direction and purpose to the business plan. Help your kid set specific, measurable, achievable, relevant, and time-bound (SMART) goals. These could range from learning new skills to achieving a certain number of sales within a specified time frame.

Step 4: Plan Your Product or Service

This stage involves detailing the product or service the business will offer. Kidpreneurs should think about what makes their offering unique and how it benefits their target customers. Encouraging creativity at this stage can lead to innovative ideas that set their business apart.

Step 5: Outline Your Marketing and Sales Strategy

Marketing and sales are how businesses attract and retain customers. Kids can brainstorm fun and engaging ways to promote their business, such as through social media, flyers, or word of mouth. They should also think about how they will sell their product or service, whether it’s online, at a local market, or through another channel.

Step 6: Create a Financial Plan

A basic financial plan is essential, even for small-scale kidpreneur ventures. This includes estimating startup costs, setting prices for products or services, and planning for future expenses. It’s a great opportunity for kids to learn about budgeting, profit, and financial management.

Step 7: Draft an Action Plan

The action plan breaks down the steps needed to launch and grow the business. It should include a timeline of activities, responsibilities, and milestones. This helps kids stay organized and focused on their goals.

Step 8: Review and Adjust

A business plan is a living document that should evolve as the business grows. Encourage kidpreneurs to review their plan regularly, celebrate achievements, and adjust their strategies as needed.

Creating a business plan is an exciting step for kidpreneurs, full of learning and growth opportunities. By following these steps, kids can turn their entrepreneurial dreams into reality, building a solid foundation for their business ventures.

To further explore entrepreneurship and financial literacy, Kidpreneurs can dive into the Kidpreneurs Academy. It’s a gamified online program designed to teach kids aged 6-12 the basics of entrepreneurship through engaging courses, games, and activities. Join today!

Related Posts

7 Essential Tools For Kidpreneurs

How Kidpreneurs Can Create a Business Teaching Other

Book Rentals: Business Idea For Kids

6 Challenges Kidpreneurs Face & How To Overcome Them

How Kids Can Create a Garage Sale

How Kids Can Start a Podcast

Subscribe to raising empowered kids® for free tips and kid-friendly resources.

Our weekly newsletter bringing you the latest and greatest in entrepreneurial parenting.

By clicking "Subscribe" below, you Agree to our Terms of Use and Privacy Policy .

You will also be subscribed to Kidpreneurs news and updates.

3120 W Carefree Hwy Suite 1-128 Phoenix, AZ 85086

• +1 (689) 244-4332
• [email protected]
• Cookie Policy (EU)
• Certification

The future of our children begins with us! Most people say, “It’s never too late.”

The Torens say, “It’s never too early to start learning the principles of entrepreneurship and money management.”

• 1-689-244-4332

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

Published: June 07, 2023

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

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

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

What is a business plan?

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

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

What is a business plan used for?

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

Business Plan Template [ Download Now ]

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

Purposes of a Business Plan

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

1. Securing financing from investors.

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

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

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

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

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

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

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

Free Business Plan Template

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

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

You're all set!

Click this link to access this resource at any time.

Free Business Plan [Template]

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

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

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

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

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

4. Getting an A in your business class.

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

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

What does a business plan need to include?

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

1. Business Plan Subtitle

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

2. Executive Summary

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

3. Company Description

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

4. The Business Opportunity

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

5. Competitive Analysis

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

6. Target Market

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

7. Marketing Plan

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

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

8. Financial Summary

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

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

10. Funding Requirements

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

Types of Business Plans

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

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

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

1. Startup Business Plan

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

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

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

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

2. Feasibility Business Plan

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

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

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

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

3. Internal Business Plan

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

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

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

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

4. Strategic Business Plan

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

These types of business plans may include:

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

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

5. Business Acquisition Plan

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

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

A business plan for an existing company will explain:

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

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

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

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

6. Business Repositioning Plan

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

This plan will:

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

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

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

7. Expansion or Growth Business Plan

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

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

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

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

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

Getting Started With Your Business Plan

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

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

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

Don't forget to share this post!

Related articles.

24 of My Favorite Sample Business Plans & Examples For Your Inspiration

How to Write a Powerful Executive Summary [+4 Top Examples]

Maximizing Your Social Media Strategy: The Top Aggregator Tools to Use

The Content Aggregator Guide for 2023

7 Gantt Chart Examples You'll Want to Copy [+ 5 Steps to Make One]

The 8 Best Free Flowchart Templates [+ Examples]

16 Best Screen Recorders to Use for Collaboration

The 25 Best Google Chrome Extensions for SEO

Professional Invoice Design: 28 Samples & Templates to Inspire You

Customers’ Top HubSpot Integrations to Streamline Your Business in 2022

2 Essential Templates For Starting Your Business

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

5 Consequences of Skipping a Business Plan

9 min. read

Updated May 10, 2024

You’ve got a great business idea, something that could be truly special. 

You’re ready to dive in, ditch the day job, and build it yourself.

But you keep being told you need to write a business plan .

It feels like an unnecessary roadblock when all you want to do is go, and you’re tempted to skip it entirely.

After all, what’s the worst that could happen? 

That’s the question we’re tackling in this article. 

I spoke with seasoned planning experts Tim Berry , Sabrina Parsons , and Noah Parsons to uncover the consequences of starting a business without a plan. 

1. An idea isn’t always a business

That initial rush of excitement when a business idea hits is intoxicating. You imagine the possibilities, the potential…but the journey from concept to reality is where things get tricky.

“Without a business plan, you won’t know if your idea can be turned into a business,” Sabrina cautions. “To transform an idea into an actual business, you need to test if it’s viable .”

The problem? Most people lack a framework for that testing. 

The idea remains trapped in your head. You lack answers to critical questions, like:

• Does it solve a real problem ? Who are your ideal customers, and what pain point are you addressing?
• Is there a market? Are enough people willing to pay for your solution?
• How will you make money? What’s your basic business model for turning a profit?

Creating a one-page plan gives you a structured way to answer these questions. It could save you from wasting time and resources chasing a dream that was never meant to be a business. 

Or it might just reveal that your idea has potential and deserves more research.

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

2. If you build it, they don’t always come

Even a seemingly good idea may not actually work . 

It could be too expensive to execute, face overwhelming competition, or simply not appeal to enough customers. 

“If you build it, they will come” is one of the biggest myths in business,” says Sabrina. “You need to attract people who actually want to buy what you are selling.”

This means finding product-market fit—the sweet spot where your solution meets a real customer need.

“It’s the single most important factor in the early stages of a business,” explains Noah. “If your product doesn’t solve a problem for your customers, you don’t have a business.”

True product-market fit requires testing. It means getting out there, talking to potential customers, and getting honest feedback:

• Do they truly need what you offer?
• Is the price point appealing?
• Are you even targeting the right audience?

You can’t meaningfully ask these questions without first outlining the assumptions baked into your idea. Who are your customers? What problem do you solve? What’s your basic business model?

Again, creating a one-page plan forces you to address these assumptions from the start. It lays the groundwork for the kind of testing that separates successful startups from those that fizzle out because they misread the market.

3. You won’t know how much money you need

You hear about bootstrapping success stories—entrepreneurs building empires from scratch. But the reality is every business requires some investment, even if it’s your own .

“You need to know how much it will cost to start and keep the business running—and then what it will take to become profitable,” Noah stresses. 

If you lack a business plan, you’ll have no idea of your revenue and expense categories. These are the starting points for creating sales, expense, and cash flow forecasts that help you understand:

• Startup Expenses : How much cash do you need to make your business operational?
• Operating Costs: How much will it take to run your business for the first year?
• Hidden Fees: Have you considered every potential expense, from licenses to marketing?
• Cash Flow : How long will it take for enough money to come in to cover your ongoing expenses?

Trying to figure this out in real-time is a recipe for disaster. 

As Sabrina puts it, “It’s like playing high-stakes poker blindfolded. You’re risking everything without a clear picture of what you’re working with.”

A plan brings clarity. It helps you determine whether you have the funds to succeed, how quickly you might become profitable, and how to allocate your cash wisely. 

Without it, you risk running out of money before your business has a fighting chance.

4. You won’t know what is and isn’t working

“Tracking your business performance— reviewing how your actual results measure up to your plan—is the key to running a successful business,” Noah emphasizes. 

Without a business plan and financial forecasts, you’ll lack the foundation to build a business strategy. That ‘blindfold’ that Sabrina mentioned before will stick with you throughout the life of your business.

Here’s what that means:

• Inefficiencies bleed profits: You won’t be able to identify the areas where you’re losing money.
• “Big decisions” are risky: You won’t know when it’s the right time to make critical decisions (like hiring team members or expanding).
• Profitability is a mystery: Without tracking towards specific business goals, “what it will take to be profitable” remains unknown.
• No data for decisions: When do you need to change course? Without the clarity a business plan provides, it’s impossible to say.

“Managing your business against your plan leads to better decisions,” says Sabrina. 

It doesn’t have to be complicated—again, with a simple one-page plan, you’ll have a tool “to better understand your financial drivers and revenue opportunities.” 

This plan becomes your roadmap. It lets you make data-driven decisions, minimize risk, and proactively steer your business toward success. With this knowledge, surprises become fewer, and your understanding of your business will grow deeper.

• 5. You will struggle to raise money

Investors and banks live in the world of business and financial plans . 

As Tim states, “Don’t get caught thinking investors just want pitches and summaries. They expect a plan and will want to go over every detail.” Without these documents, you’ll face serious hurdles in securing funding. Tim adds: “I’ve seen investors reject a startup from just summaries without reading a business plan document. But I’ve never seen them invest without having seen a plan.”  

Think of it this way: If you don’t have a plan, you either scramble to assemble one or walk into investor meetings unprepared. 

“I’ve seen it countless times in actual investor pitches,” Tim recounts. “Things seem promising until investors start digging into specifics like marketing spend or administrative costs. Those without a well-thought-out plan freeze up. Investors can smell that a mile away.”

The very process of creating a business plan primes you for the questions investors will undoubtedly ask. “The planning process forces you to answer questions about your business that you may not have thought to ask yourself,” explains Noah. 

This includes the critical question: How much funding do you truly need?

“Getting the right amount of financing for your business will save you heartache and money,” says Sabrina. “Do yourself a favor and create a full financial forecast to understand exactly how much funding you need.” Otherwise, you risk under or overestimating, damaging your credibility with investors.

TLDR: If you’re seeking outside funding, a formal business plan isn’t just helpful—it’s essential. While a more detailed plan is likely necessary, the one-page plan we’ve discussed will form the foundation.

• Failing to plan is planning to fail

Writing a business plan will make you a better business owner.

It’s not just about avoiding pitfalls; it’s about unlocking your business’s full potential. The planning process forces you to dig deep, examine your ideas, and refine them into a powerful strategy built for long-term success.

The best part? You don’t need a complex, time-consuming document to reap these rewards. 

“We’re talking about a lean one-page plan to run your business,” Tim emphasizes. It’s easy to develop, keep updated, and build on bullet points, lists, and tables. If you know your business, you can do it quickly.”

So, whether you’re a new or existing business—don’t face the consequences caused by skipping out on your business plan.

Download our free one-page business plan template and write it in as little as 30 minutes . You and your business will be glad you did.

What are the consequences of not having a business plan?

Skipping the business planning process can lead to several negative consequences:

• Your idea might not be viable: You risk wasting time and money on a product or service that nobody wants or isn’t profitable.
• You could miss your target market: A plan helps you understand your ideal customer and ensure you’re offering something they truly need.
• You’ll be financially unprepared: You won’t know your true startup and operational costs or how to reach profitability.
• You’ll lack a roadmap: Without a plan, it’s difficult to track progress, identify problems, or make strategic decisions.
• You’ll struggle to get funding: Investors and lenders rely on business plans and financial statements to assess the potential of your venture.

Remember, even a simple one-page plan can help you avoid these pitfalls and set your business up for success.

Can a business survive without a business plan?

Technically, yes, a business can survive without a plan. There are examples of businesses that found success without traditional planning—but they are the outliers.

The reality is that businesses without a plan face significantly greater obstacles. They’re more likely to:

• Make costly mistakes due to a lack of foresight.
• Miss out on opportunities due to a lack of direction.
• Struggle to obtain funding from investors and lenders.
• Fail to understand their full financial picture.

While survival is possible, a business plan dramatically increases the odds of not just surviving but thriving.

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

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

Table of Contents

• 1. An idea isn’t always a business
• 2. If you build it, they don’t always come
• 3. You won’t know how much money you need
• 4. You won’t know what is and isn’t working

Related Articles

10 Min. Read

14 Reasons Why You Need a Business Plan

3 Min. Read

5 Fundamental Principles of Business Planning

5 Min. Read

Business Plan Vs Strategic Plan Vs Operational Plan—Differences Explained

12 Min. Read

Do You Need a Business Plan? Scientific Research Says Yes

The Bplans Newsletter

The Bplans Weekly

Subscribe now for weekly advice and free downloadable resources to help start and grow your business.

We care about your privacy. See our privacy policy .

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

• Advertise with us
• Tuesday, May 14, 2024

Most Widely Read Newspaper

PunchNG Menu:

• Special Features
• Sex & Relationship

ID) . '?utm_source=news-flash&utm_medium=web"> Download Punch Lite App

BMI plans support for young entrepreneurs

Kindly share this story:

• ‘Mentorship will help women entrepreneurs succeed’
• Foundation empowers S’East entrepreneurs with skills
• Entrepreneurs support vulnerable Nigerians amid economic hardship

Anozie is a Chief Correspondent with PUNCH. He has over 13 years experience covering entertainment, maritime and transport sectors

• Business Matters Incubators
• entrepreneurs

All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.

Contact: [email protected]

Stay informed and ahead of the curve! Follow The Punch Newspaper on WhatsApp for real-time updates, breaking news, and exclusive content. Don't miss a headline – join now!

ONLINE FOREX, BITCOIN AND BINARY MANAGER. Do you require the service of a tested and trusted experienced trader who can help you trade your online Forex, Bitcoin and Binary accounts for minimum 10-20% weekly profit?. Click here for details WhatsApp: +2348030797998

VERIFIED: Nigerians can now earn US Dollars with premium domains just like Americans, acquire for as low as $1200 and you profit $19000 (₦23million). Click here to start.

Latest News

Nigerians compare sparkling ‘prison’ service’ hotel with nation’s infamous dilapidated cells, man arrested for invading plateau bank with bomb, poll results: netizens bicker over atiku, obi pairing ahead of 2027 election, n12m school fees: late herbert wigwe’s university may become nigeria’s most expensive varsity in august, late access bank ceo’s varsity, wigwe university to kick off august.

FG may need supplementary budget to pay minimum wage – IMF

Lorem ipsum dolor sit amet, conse adipiscing elit.

More From Forbes

7 High-Profit Business Ideas Worth Exploring

• Share to Facebook
• Share to Twitter
• Share to Linkedin

When it comes to building a profitable business, there's no shortage of innovative ideas. The key is to identify opportunities that align with market demand, leverage emerging trends, and match your expertise or interest.

Revenue and profit are often used interchangeably, but understanding their distinction is crucial for business success . Revenue, or sales, is the total amount of money generated from selling products or services. Profit, however, is what remains after subtracting all expenses (including production costs, salaries, taxes, and overhead) from that revenue.

Making a lot of sales might seem like a win, but without managing costs, the business could still be unprofitable. To maximize profitability, focus on the three profit drivers: increasing sales volume, optimizing pricing strategies, and reducing costs through efficient operations. By carefully managing these drivers, businesses can ensure that strong sales translate into higher profits .

If you’re considering venturing into entrepreneurship or expanding your business, here are seven high-profit business ideas to explore:

1. subscription box services.

Subscription boxes are a booming industry, offering curated experiences right to customers' doorsteps. From gourmet snacks and beauty products to niche hobbies like books or gardening, subscription services meet the growing demand for personalization. The recurring revenue model is attractive, especially with a loyal customer base.

Apple iPhone 16 Pro Design Upgrade Shines In New Leak

‘fallout’ dethroned in amazon prime video’s top 10 list by a new offering, netflix marvel dud among movies new on streaming service this week, 2. digital marketing agency.

With businesses increasingly shifting online, digital marketing agencies are in high demand. Specializing in SEO, content marketing, social media management, and PPC advertising can generate substantial profits. Small to mid-sized businesses often outsource these services to experts, providing a steady client base.

3. Online Education and Coaching

As remote learning continues to grow, creating courses or coaching programs can be a lucrative business. Whether it’s professional skills, language learning, or fitness, online education can reach global audiences. Develop courses that provide tangible value and offer certification for enhanced credibility.

4. eCommerce Store

The eCommerce sector is flourishing, especially with specialized or handcrafted products. Launching your online store using platforms like Shopify or Etsy provides a scalable way to reach customers. Niche markets like eco-friendly products, pet supplies, or tech gadgets can prove highly profitable.

5. Software as a Service (SaaS)

SaaS businesses have low overhead costs and high scalability. If you have technical expertise, consider developing software solutions for business needs like project management, accounting, or customer support. Subscriptions offer recurring revenue and companies are willing to pay for productivity-enhancing tools.

6. Real Estate Investment and Management

Real estate remains a timeless wealth-building tool. While buying properties and flipping them can yield quick returns, managing rental properties can provide a consistent cash flow. Commercial real estate also offers opportunities, but it’s essential to have a sound investment strategy.

7. Health and Wellness Services

Health and wellness have gained significant traction, creating opportunities for nutrition consulting, fitness coaching, or holistic therapies. The pursuit of healthier lifestyles is universal, and online platforms enable wider reach. Specializing in a particular niche can further boost profitability.

The bottom line is that a high-profit business needs more than just a great idea; thorough market research, strategic planning, and adaptability to market trends are crucial. Choose an idea that aligns with your skills or passion while staying mindful of market demand. With dedication and the right strategy, you can build a thriving enterprise that offers substantial returns.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and I also guide established business owners to grow their businesses to more profitably.

The opinions expressed in this article are not intended to

replace any professional or expert accounting and/or tax advice whatsoever.

• Editorial Standards
• Reprints & Permissions

Join The Conversation

One Community. Many Voices. Create a free account to share your thoughts. 

Forbes Community Guidelines

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.

In order to do so, please follow the posting rules in our site's  Terms of Service.   We've summarized some of those key rules below. Simply put, keep it civil.

Your post will be rejected if we notice that it seems to contain:

• False or intentionally out-of-context or misleading information
• Insults, profanity, incoherent, obscene or inflammatory language or threats of any kind
• Attacks on the identity of other commenters or the article's author
• Content that otherwise violates our site's  terms.

User accounts will be blocked if we notice or believe that users are engaged in:

• Continuous attempts to re-post comments that have been previously moderated/rejected
• Racist, sexist, homophobic or other discriminatory comments
• Attempts or tactics that put the site security at risk
• Actions that otherwise violate our site's  terms.

So, how can you be a power user?

• Stay on topic and share your insights
• Feel free to be clear and thoughtful to get your point across
• ‘Like’ or ‘Dislike’ to show your point of view.
• Protect your community.
• Use the report tool to alert us when someone breaks the rules.

Thanks for reading our community guidelines. Please read the full list of posting rules found in our site's  Terms of Service.

Entrepreneurship and Start-Ups in Africa

The Role in African Business of German Companies

• First Online: 17 November 2023

Cite this chapter

• Philipp von Carlowitz 4  

75 Accesses

Entrepreneurship plays a role both for the development of African countries and for foreign companies with market entry plans. The infrastructural and institutional conditions for entrepreneurship are still difficult, but the advancing digitization leads to an increasingly active start-up scene in many African countries. There is still a mismatch between the areas where start-ups are created and the areas where foreign companies are looking for partners for market entry. Thus, despite positive developments in entrepreneurship, it remains difficult to find suitable partners in the foreseeable future.

Entrepreneurship is an essential driver of societal health and wealth, and a formidable engine of economic growth. from: Global Entrepreneurship Monitor (Bosma et al., 2020 , S. 13)

ESB Business School (Reutlingen University) and Institute for New Markets (InNeMa)

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

• Available as PDF
• Read on any device
• Instant download
• Own it forever
• Available as EPUB and PDF
• Compact, lightweight edition
• Dispatched in 3 to 5 business days
• Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

The EDAI identifies five key indicators, namely IT, affordability, education, quality, and internet usage (IMF 2020 , p. 2).

The TEA measures the number of entrepreneurs who are actively involved in starting a business or already own a new business that has been in existence for less than 42 months. TEA is expressed as a percentage of established companies (more than 42 months old).

Acs, Z., Szerb, L., & Autio, E. (2015). Global entrepreneurship and development index 2014 . Springer.

Google Scholar  

Acs, Z., Szerb, L., & Lloyd, A. (2017). Global entrepreneurship and development index 2017 . Springer. https://doi.org/10.1007/978-3-319-65903-9

Book   Google Scholar  

Adom, K., & Williams, C. (2012). Evaluating the motives of informal entrepreneurs. Journal of Developmental Entrepreneurship, 17 (1).

AfriLabs & Briter Bridges. (2019). Building a conducive setting for innovators to thrive—A qualitative and quantitative study of a hundred hubs across Africa. https://static1.squarespace.com/static/5ab2a4d655b02c29746fc58c/t/5db6ec5fc494f4106d713e26/1572269613096/4.0_AFRILABS_REPORT+FINAL-compressed.pdf . Accessed 25 Nov 2020.

Atiase, V. Y., Mahmood, S., Wang, Y., & Botchie, D. (2018). Developing entrepreneurship in Africa: Investigating critical resource challenges. Journal of Small Business and Enterprise Development, 25 (4), 644–666. https://doi.org/10.1108/JSBED-03-2017-0084 .

Article   Google Scholar  

Ball, E. B., Bar-Shany, S., & Adereth, M. (2019). To augment tech’s transformation of Sub-Saharan Africa, impact investors should focus on the startup ecosystem. https://ssir.org/articles/entry/to_augment_techs_transformation_of_sub_saharan_africa_impact_investors_should_focus_on_the_startup_ecosystem . Accessed 26 Nov 2020.

Beugré, C. D. (2017). The need for entrepreneurial ecosystems in Sub-Saharan Africa. Building Entrepreneurial Ecosystems in Sub-Saharan Africa, 19–34 . Palgrave Macmillan US. https://doi.org/10.1057/978-1-137-56894-6_3

Biggs, T., & Shah, M. (2003). The problem of African entrepreneurial development. In G. Fields & G. Pfeffermann (Eds.), Pathways out of poverty (pp. 155–189). Kluwer.

Bosma, N., Hill, S., Ionescu-Somers, A., Kelley, D., Levie, J., & Tarnawa, A. (2020). Global entrepreneurship monitor 2019/2020 global report . Global Entrepreneurship Research Association.

Briter Bridges. (2019). Africa’s funding landscape. https://static1.squarespace.com/static/5ab2a4d655b02c29746fc58c/t/5e09b86a41180e2960fb0c54/1577695342984/Africa%27s+2019+Funding+Landscape+PDF-comp.pdf . Accessed 26 Nov 2020.

Carland, J., Hoy, F., Boulton, W., & Carland, J. (1984). Differentiating entrepreneurs from small business owners: A conceptualization. Academy of Management Review, 9 (2), 354–359.

Claesens, S., Frost, J., Turner, G., & Zhu, F. (2018). An overview of market developments and investment opportunities. BIZ-Quartalsbericht, September 2018.

Douglas, K. (2014). 20 thought-provoking quotes by African entrepreneurs in 2014. howwemadeitinafrica.com . Accessed 26 Feb 2016.

EY. (2019). FinTechs in Sub-Saharan Africa—An overview of market developments and investment opportunities. https://hollandfintech.com/wp-content/uploads/2019/02/ey-fin-tech-market-opportunities-2019.pdf . Accessed 1 Nov 2019.

Ferreira, M., Reis, N., & Miranda, R. (2015). Thirty years of entrepreneurship research published in top journals: Analysis of citations, co-citations and themes. Journal of Global Entrepreneurship Research, 5 (17). https://doi.org/10.1186/s40497-015-0035-6 .

Founders Africa. (2020). Meet Cephas Nshimyumuremyi, The Rwandan serial entrepreneur that started his business with 10 dollars. https://foundersafrica.com/meet-cephas-nshimyumuremyi-the-rwandan-serial-entrepreneur-that-started-his-business-with-10-dollars/ . Accessed 22 Dec 2020.

Friederici, N. (2019). Innovation hubs in Africa: What do they really do for digital entrepreneurs? In N. Taura, E. Bolat, & N. O. Madichie (Eds.), Digital entrepreneurship in sub-Saharan Africa: Challenges, opportunities and prospects (pp. 9–28). Springer.

Garcia-Rodriguez, F. J., Gil-Soto, E., Ruiz-Rosa, I., & Sene, P. M. (2017). Entrepreneurship education in Sub-Saharan Africa: Results of a case study in Senegal. Journal of Entrepreneurship Education, 20 (2), 1–15.

Gartner, W. (1985). A conceptual framework for describing the phenomenon of new venture creation. Academy of Management Review, 10 (4), 696–706.

Gnyawali, D., & Fogel, D. (1994). Environments for entrepreneurship development: Key dimensions and research implications. Entrepreneurship Theory and Practice, 18, 43–62.

Gomes, E., Vendrell-Herrero, F., Mellahi, K., Angwin, D., & Sousa, C. M. P. (2018). Testing the self-selection theory in high corruption environments: Evidence from African SMEs. International Marketing Review, 35 (5), 733–759. Emerald Publishing Limited. https://doi.org/10.1108/IMR-03-2017-0054 .

Groh, A., Liechtenstein, H., Lieser, K., & Biesinger, M. (2018). The venture capital and private equity country attractiveness index 2018. https://blog.iese.edu/vcpeindex/files/2018/02/report2018.pdf . Accessed 26 Nov 2020.

GSMA (Group Speciale Mobile Association). (2019). 618 active tech hubs: The backbone of Africa’s tech ecosystem. https://www.gsma.com/mobilefordevelopment/blog/618-active-tech-hubs-the-backbone-of-africas-tech-ecosystem/ . Accessed 25 Nov 2020.

Herrington, M., & Coduras, A. (2019). The national entrepreneurship framework conditions in sub-Saharan Africa: A comparative study of GEM data/national expert surveys for South Africa, Angola, Mozambique and Madagascar. Journal of Global Entrepreneurship Research, 9 (1), 60. https://doi.org/10.1186/s40497-019-0183-1 .

Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations: Software of the mind; intercultural cooperation and its importance for survival . McGraw-Hill.

House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (2004). Culture, leadership, and organizations—The globe study of 62 societies . Sage.

IMF. (2020). Regional economic Outlook Sub-Saharan Africa. COVID-19: An unprecedented threat to development. https://www.imf.org/en/Publications/REO/SSA/Issues/2020/04/01/sreo0420 . Accessed 28 Nov 2020.

Juma, N. A., James, C. D., & Kwesiga, E. (2017). Sustainable entrepreneurship in Sub-Saharan Africa: The collaborative multi-system model. Journal of Small Business & Entrepreneurship, 29 (3), 211–235. https://doi.org/10.1080/08276331.2017.1293949 .

Kew, J. (2015). Africa’s young entrepreneurs: Unlocking the potential for a brighter future . University of Cape Town. https://www.gemconsortium.org/file/open?fileId=49222 . Accessed 22 Nov 2020.

Kiggundu, M. (2002). Entrepreneurs and entrepreneurship in Africa: What is known and what needs to be done. Journal of Developmental Entrepreneurship, 7 (3), 239–258.

Kristiansen, S. (2004). Social networks and business success—The role of subcultures in an African context. The American Journal of Economics and Sociology, 63 (5), 1149–1171.

Kshetri, N. (2011). Institutional and economic foundation of entrepreneurship in Africa: An overview. Journal of Developmental Entrepreneurship, 16 (1). http://ssrn.com/abstract=1947439 . Accessed 15 Mar 2016.

Kuada, J. (2015). Entrepreneurship in Africa—A classificatory framework and a research agenda. African Journal of Economic and Management Studies, 6 (2), 148–163.

Legit. (2018). 5 African young entrepreneurs and their inspirational success stories. https://www.legit.ng/1198846-5-african-young-entrepreneurs-inspirational-success-stories.html . Accessed 22 Dec 2020.

Lerner, J., & Sahlman, W. (2012). Reviewing entrepreneurship: Policy decisions in 12 areas could nurture or cripple America’s greatest asset. Harvard Business Review, März, 116–119.

Mitchell, R., Busenitz, L., Lant, T., et al. (2002). Toward a theory of entrepreneurial cognition: Rethinking the people side of entrepreneurship research. Entrepreneurship Theory and Practice, 27 (2), 93–104.

Mitchelmore, S., & Rowley, J. (2010). Entrepreneurial competencies: A literature review and development agenda. International Journal of Entrepreneurial Behavior & Research, 16 (2), 92–111.

Mo Ibrahim Foundation. (2020). Ibrahim Index of African Governance (IIAG)—Public administration. https://iiag.online/about.html . Accessed 17 Dec 2020.

Mudida, R., & Lago, A. (2015). A roadmap to opportunities—Five pillars for doing business in Africa. IESE Insight, 24, 15–23. https://doi.org/10.15581/002.ART-2670 .

Ndung’u, N. (2018). Harnessing Africa’s digital potential. New tools for a new age. In B. Coulibaly (Ed.), Foresight Africa—Top priorities for the continent in 2018 (pp. 82–99). Brooking Institution.

n.a. (n.d.). How these 10 super successful African entrepreneurs raised money to start their businesses. http://www.smallstarter.com/get-inspired/10-super-success-african-entrepreneurs-and-how-they-raised-money-to-start-their-businesses/ . Accessed 17 Feb 2016.

Partech. (2019). 2018 was a monumental year for African tech start-ups, with US$ 1.163 billion raised in equity funding, a 108% YoY growth. Partech report. https://partechpartners.com . Accessed 1 Nov 2019.

Preisendörfer, P., Bitz, A., & Bezuidenhout, F. (2012). In search of black entrepreneurship: Why is there a lack of entrepreneurial activity among the black population in South Africa. Journal of Developmental Entrepreneurship, 17 (1). https://doi.org/10.1142/S1084946712500069 .

Rodrigues, G., Mwesigwa, D., Mukundane, J., Kasprzak, M., & Csíkszentmihályi, C. (2018). Social tech ecosystems in Sub-Saharan Africa. Madeira Interactive Technologies Institute. https://doi.org/10.5281/ZENODO.1244086 .

Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25 (1), 217–226.

Sheriff, M., & Muffatto, M. (2014). Reviewing existing policies for unleashing and fostering entrepreneurship in selected African countries. Journal of Developmental Entrepreneurship, 19 (3). https://doi.org/10.1142/S1084946714500162 .

Singer, S., Amoroso, J., & Moska, K. (2015). Global entrepreneurship monitor 2014 global report . Global Entrepreneurship Research Association (GERA).

Ucbasaran, D., Westhead, P., & Wright, M. (2001). The focus of entrepreneurial research: Contextual and process issues. Entrepreneurship Theory and Practice, 25 (4), 57–80.

UNESCO. (n.d.). Sustainable development goals 1 and 4. http://data.uis.unesco.org/index.aspx?queryid=166 . Accessed 22 Dec 2020.

VillageCapital. (2017). Breaking the pattern: Getting digital financial services entrepreneurs to scale in India and East Africa. Washington (DC).

von Carlowitz, P. (2018). Chancen in Subsahara Afrika nutzen. Studie im Auftrag des Ministeriums für Wirtschaft, Arbeit und Wohnungsbau Baden-Württemberg. https://wm.baden-wuerttemberg.de/fileadmin/redaktion/m-wm/intern/Dateien_Downloads/Veranstaltungen/PM_219__Anlage_STUDIE_Chancen_in_SSA_PUB.pdf . Accessed 30 Oct 2018.

von Carlowitz, P. (2019a). Geschäftsmodelle für Subsahara Afrika – Empirische Untersuchung der österreichischen Wirtschaft . WKO Fachreport. Wirtschaftskammer Österreich, Wien.

von Carlowitz, P. (2019b). Fachreport: Potentiale in Subsahara Afrika Nutzen – Chancen für die Österreichische Wirtschaft . Wirtschaftskammer Österreich/Aussenwirtschaft Austria.

von Carlowitz, P. (2020). Digitalisierung in den Zukunftsmärkten Subsahara Afrikas – Chancen und Geschäftsmodelle für österreichische Unternehmen . Bundesministerium Digitalisierung und Wirtschaftsstandort Österreich.

Wang, X., & Jessup, L. (2014). A review and synthesis of entrepreneurship research: Towards an integrative model of dependent variables. The Journal of Entrepreneurship, 23 (2), 163–199.

WEF (World Economic Forum). (2015). The african competitiveness report 2015 . WEF.

WEF (World Economic Forum). (2019). The global competitiveness report 2019 . WEF.

Williams, C., & Nadin, S. (2010). Entrepreneurship and the informal economy: An overview. Journal of Developmental Entrepreneurship, 15 (4), 361–378.

World Bank. (2019). Doing business—Training for reform. http://www.doingbusiness.org/research . Accessed 21 Nov 2021.

World Bank. (n.d.a). Doing business—Entrepreneurship. https://www.doingbusiness.org/en/data/exploretopics/entrepreneurship . Accessed 21 Nov 2020.

World Bank. (n.d.b). Explore topics—Biggest obstacle. https://www.enterprisesurveys.org/en/data/exploretopics . Accessed 27 Nov 2020.

World Bank. (2020a). Doing business 2020: Comparing business regulation in 190 economies . World Bank. https://doi.org/10.1596/978-1-4648-1440-2 .

World Bank. (2020b). Global financial development report 2019/2020: Bank regulation and supervision a decade after the global financial crisis . World Bank.

Download references

Author information

Authors and affiliations.

Reutlingen, Germany

Philipp von Carlowitz

You can also search for this author in PubMed   Google Scholar

Corresponding author

Correspondence to Philipp von Carlowitz .

Editor information

Editors and affiliations.

Hochschule Flensburg, Flensburg, Germany

Thomas Schmidt

Kay Pfaffenberger

Conjuncta GmbH, Hamburg, Germany

Stefan Liebing

Rights and permissions

Reprints and permissions

Copyright information

© 2023 The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature

About this chapter

von Carlowitz, P. (2023). Entrepreneurship and Start-Ups in Africa. In: Schmidt, T., Pfaffenberger, K., Liebing, S. (eds) Practical Handbook Business in Africa. Springer, Wiesbaden. https://doi.org/10.1007/978-3-658-42518-0_3

Download citation

DOI : https://doi.org/10.1007/978-3-658-42518-0_3

Published : 17 November 2023

Publisher Name : Springer, Wiesbaden

Print ISBN : 978-3-658-42517-3

Online ISBN : 978-3-658-42518-0

eBook Packages : Economics and Finance Economics and Finance (R0)

Share this chapter

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Publish with us

Policies and ethics

• Find a journal
• Track your research

The power of individual pension plans compared to RRSPs

By Colleen O’Connell-Campbell

Individual pension plans stand out as a sterling retirement savings option for some demographics of entrepreneurs and incorporated business owners, particularly those with T4 income of more than $100,000 and over the age of 40.

An IPP offers a robust alternative to the more common registered retirement savings plan (RRSP). But what exactly is an IPP, and why is it worth a spot in the financial strategies of a seasoned entrepreneur?

An IPP is a tax-sheltered retirement savings plan specifically designed for incorporated business owners and professionals. You might think of it as a supercharged RRSP, offering higher contribution limits and additional benefits tailored to the needs of successful individuals who have made significant strides in their careers.

The primary allure of an IPP lies in its enhanced contribution limits, which often exceed those of RRSPs. This feature becomes increasingly valuable as one grows older, allowing for accelerated retirement savings.

Furthermore, IPP contributions are tax deductible and may offer creditor protection, adding a layer of security to your hard-earned wealth.

When is an IPP ideal?

There are several factors that make an IPP appealing to people in certain situations:

1. Age and income: The IPP is particularly advantageous for those older than 40 with a T4 income exceeding $100,000. While available to younger individuals, the benefits become more attractive as one enters this demographic.

2. Incorporated professionals: Those in fields such as law, medicine and accounting, where incorporation is common, find IPPs especially beneficial.

3. Family business and wealth transfer: For family-owned businesses, IPPs can be instrumental in intergenerational wealth transfer, ensuring the continuity of financial security.

4. Exit strategies: IPPs can be a key element in a cash-rich business exit strategy, complementing other assets such as proceeds from business sales, real estate portfolios and corporate investments.

IPP vs. RRSP

While both IPPs and RRSPs offer tax-deferred growth, IPPs stand out in several ways:

1. Higher contribution limits: IPPs allow for higher employer contributions compared to RRSPs, making them ideal for high-income earners looking to maximize their retirement savings.

2. Defined benefits: Unlike RRSPs, IPPs provide a defined benefit after retirement, offering a predictable income stream.

3. Tax efficiency for corporations: Contributions to an IPP are tax deductible f or the corporation, enhancing the overall tax efficiency of the business.

• RRSPs still the greatest way to save for retirement: Golombek
• How to use RRSPs, TFSAs and more to save on taxes
• RRSPs offer this group a critical opportunity

Setting up an IPP involves navigating legalities and specific requirements, making it essential to seek professional advice. This complexity, however, should not deter savvy investors and entrepreneurs from exploring IPPs as a viable option.

And for those who remember the band Naughty by Nature’s 1991 hit O.P.P., an IPP might just be the new catchphrase for forward-thinking business owners as we head deeper into tax season. Allow the catchy tune to underscore the IPP’s relevance to a gen X (and older) cohort of entrepreneurs and professionals.

Colleen O’Connell-Campbell is a wealth adviser with RBC Dominion Securities and host of The Cash-Rich Exit Podcast.

• Starting Up
• Growing a Business
• Inspiration
• For Subscribers
• Write for Entrepreneur
• Entrepreneur Store
• United States
• Asia Pacific
• Middle East
• South Africa

Copyright © 2024 Entrepreneur Media, LLC All rights reserved. Entrepreneur® and its related marks are registered trademarks of Entrepreneur Media LLC

The Recap: The Demo Day Of The Mohammed Bin Rashid Innovation Fund Accelerator Program's Seventh Cohort 18 startups presented their ideas in front of a panel of regional investors, following which three startups emerged as the winners of the Demo Day.

By Entrepreneur Middle East Staff • May 13, 2024

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

On May 1, 2024, the Mohammed Bin Rashid Innovation Fund (MBRIF) held the Demo Day of the seventh cohort of its Innovation Accelerator Program at the 25Hours hotel in Dubai. The event was held in collaboration with Bolt , Brinc , Emirates Development Bank (EDB), and Entrepreneur Middle East .

The event was kickstarted by a welcome address from Shaker Zainal, Head of the MBRIF and Chief Business Officer at EDB. This was followed by a fireside chat between HRH Prince Khaled bin Alwaleed bin Talal Al Saud, founder and CEO of KBW Ventures, and Aby Sam Thomas, Editor in Chief of Entrepreneur Middle East , which explored the current investment landscape from both a global and regional perspective.

18 startups from the MBRIF Innovation Accelerator Program's seventh cohort then presented their business ideas to a panel of judges comprising of KBW Ventures' Prince Khaled, H.E. Dr. Tariq Bin Hendi, Senior Partner, Global Ventures , Hala Ebrahim, Investment Director, Antler Middle East , and Tala Al Jabri, angel investor and board member, Middle East Venture Capital Association .

The startups that took part in the pitch competition included Knowledge Nexus AI , Appro , Arlan Biotech , BelowFarm , Detectiome , Egrobots , Faceki , Finanshels , HealthStay , Hekayati , Hulexo , InvoiceMate , MayaMD , MDBX Health , Oscar , Pulse Technologies , TranspRight , and Uktob .

At the end of the judges' deliberations, three prizes were awarded- Best Pitch, Best UAE Homegrown Business, and Most Impactful Business. The winners were declared as follows:

Best Pitch: MDBX Health

Best UAE Homegrown Business: HealthStay

Most Impactful Business: Detectiome

Launched in 2018, the MBRIF Accelerator aims to support innovators and entrepreneurs by offering key resources, connections, and services specifically designed to accelerate business growth to ensure their success. Check out the video for more highlights from the seventh cohort's Demo Day!

Related: Empowering The Next Generation Of Innovators: UAE Ministry Of Finance's Chief Innovation Officer Fatima Al Naqbi On The Mohammed Bin Rashid Innovation Fund

Entrepreneur Staff

Most Popular Red Arrow

How to start a bed and breakfast.

If you're thinking of turning your home into an inn, start here to learn about pricing, costs, employees and more.

Their 'Magic Internet Money' Side Hustle Just Hit $1 Billion in Sales: 'We'd Empty 6 Figures of Cash Onto the Counter. The Bank Teller's Expressions Were Priceless.'

Inspired by the concept of decentralized money, Neil Bergquist and Michael Smyer came up with a lucrative idea they believed "would nearly run" itself.

The Value Economy — How to Master the Game of Wealth in a Changing World

Stay ahead of the curve by offering your customers — and the world — more value.

How New Businesses Can Create a Content Marketing Strategy

Follow these steps to develop and execute an effective content marketing plan for your business.

What Does 'Good Business' Really Mean?

Doing the right thing has more benefits than you might think.

11 Insaaaane Things You Didn't Know About the Founder of Crazy Eddie

Eddie Antar died this weekend at age 68.

Successfully copied link