qualities of business plan

10 Characteristics Of A Business Plan, its Functions, Features and Benefits

We explain what a business plan is, its functions, and the benefits it provides. Also, what are its features and methods it uses?

What is a business plan?

A business plan is a written document that expresses  a formal declaration of the objectives  of the initiatives that a company has in the projection and evaluation phase.

These initiatives  can be new projects within  the company's activities or the start of the company itself. Therefore, a business plan describes a series of interrelated activities aimed at achieving certain goals.

This allows a planning of the tasks and  the evaluation of the resources that will be necessary  to achieve those goals (for example, resorting to banks or investors for financing).

In addition, its function is to transmit to current or potential investors (investors, shareholders, financiers, etc.)  how the investment will be recovered and the guarantees  they have. It differs from an investment project in that a business plan is more focused on the strategies that will be carried out.

Characteristics of a business plan  :

Flexibility.

• It allows errors to be detected and difficulties to be anticipated before the start of the investment . In this way solutions can be planned.
• By including the economic and financial forecast of the business, it facilitates access to bank financing, as well as attracting new partners and collaborators.
• It allows the measurement of results of each stage, through short and medium-term goals that allow establishing measurement criteria.
• It allows detecting the most promising business opportunities in terms of markets of interest, products and services.
• It allows an evaluation of the company's situation in the context of its competitors, and the identification of tasks and areas that need improvement.
• It facilitates the rational use of resources, including personnel, since planning facilitates the assignment of responsibilities and coordinated work .
• Once the goals of the company have been established, it allows evaluating various strategies according to their effectiveness .
• Establishes the financial framework.

Executive Summary

After the cover and table of contents, the executive summary  gives an overall impression of the project  . For that, you must highlight the key data of the same and include all the relevant information .

Among this information  should not be missing the needs and objectives of the business  , the advantages offered by the product or service and the opportunity offered by the market, as well as the history of the company and its management team.

Most of this information will be expanded upon in the rest of the document.

Insertion in the market

The projected product or service must be described in detail and its possible insertion in the market explained. For that, it  is necessary to make a comparison with similar products or services  that already exist in the market.

The project arises to cover an existing need in the market, which is why potential consumers must be identified and  what advantages or weak points they will find  in the proposed product or service.

The relationship between the product and the market  must include a SWOT analysis  (strengths, opportunities, weaknesses, threats).

Market Characteristics

Once the market that will be the context of the business has been identified, said market is described in depth. This includes:

• Size, rate of growth and potential benefits offered.
• What segments does it include?
• Locate it geographically.
• Identify possible competitors, substitutes and complements.
• Define means of audience research.

It details  who makes up the management team  , but also the characteristics of the work team: how the company will be managed, the history of the personnel involved, the general experience of the company, the various areas of management, sales, stock control and quality.

Marketing plan

Promotional strategies are described,  taking into account "the four P's"  : product , price, advertising , points of sale.

Business system and schedule

All the necessary steps  are described from the manufacture of the product to the moment of purchase or completion of the service. It includes the areas of human resources , sales, commercial, management and organizational culture .

The schedule must specify  when each of the necessary steps will be activated  (hiring or relocation of personnel, start of production, purchase of raw material , etc.).

The accounting-financial area  allows detailing the structure and composition of social capital  , as well as calculating capital flows and valuing the investment.

Sources of income are analyzed and  a plan is created that determines how profits and losses will be managed . If it is a search for risk capital, what are exit alternatives for investors should be included?

The above content published at Collaborative Research Group is for informational and educational purposes only and has been developed by referring to reliable sources and recommendations from technology experts. We do not have any contact with official entities nor do we intend to replace the information that they emit.

Luke Wigman

Luke is passionate about fostering student involvement and connection. He studied psychology for his major and likes learning about the past. Luke aims to specialize in artificial intelligence and cybersecurity. .

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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What Is a Business Plan?

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

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

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

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

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

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

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

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

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

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

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What Is a Business Plan? Definition and Planning Essentials Explained

Posted february 21, 2022 by kody wirth.

What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance. 

A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner. 

Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed. 

What is a business plan?

A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.  

Why do you need a business plan?

The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis. 

These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. By regularly returning to your plan you can understand what parts of your strategy are working and those that are not.

That just scratches the surface for why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .  

What can you do with your plan?

So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.

Test an idea

Writing a plan isn’t just for those that are ready to start a business. It’s just as valuable for those that have an idea and want to determine if it’s actually possible or not. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful. 

The market and competitive research alone can tell you a lot about your idea. Is the marketplace too crowded? Is the solution you have in mind not really needed? Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability and you can paint a pretty clear picture of the potential of your business.

Document your strategy and goals

For those starting or managing a business understanding where you’re going and how you’re going to get there are vital. Writing your plan helps you do that. It ensures that you are considering all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen. 

With a plan in place, you’ll have an idea of where you want your business to go as well as how you’ve performed in the past. This alone better prepares you to take on challenges, review what you’ve done before, and make the right adjustments.

Pursue funding

Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can instead keep your plan up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.

The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but easily report on how it’s been used. 

Better manage your business

A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.

Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.

What should your business plan include?

The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see. 

Executive summary

The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover the problem you’re solving, a description of your product or service, your target market, organizational structure, a financial summary, and any necessary funding requirements.

This will be the first part of your plan but it’s easiest to write it after you’ve created your full plan.

Products & Services

When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. Lastly, be sure to outline the steps or milestones that you’ll need to hit to successfully launch your business. If you’ve already hit some initial milestones, like taking pre-orders or early funding, be sure to include it here to further prove the validity of your business. 

Market analysis

A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the overall state and potential of the industry, who your ideal customers are, the positioning of your competition, and how you intend to position your own business. This helps you better explore the long-term trends of the market, what challenges to expect, and how you will need to initially introduce and even price your products or services.

Check out our full guide for how to conduct a market analysis in just four easy steps .  

Marketing & sales

Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add it. 

Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.

Check out our full write-up to learn how to create a cohesive marketing strategy for your business. 

Organization & management

This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history. Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.

Financial projections

Possibly the most important piece of your plan, your financials section is vital for showcasing the viability of your business. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex on the surface, but it can be far easier than you think. 

Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate. 

Here are the statements you should include in your financial plan:

• Sales and revenue projections
• Profit and loss statement
• Cash flow statement
• Balance sheet

The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first and only add documentation that you think will be beneficial for anyone reading your plan.

Types of business plans explained

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

Traditional business plan

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

This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information. 

Business model canvas

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

The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations. This is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan. This format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.

By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. This plan type is useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Now, the option that we here at LivePlan recommend is the Lean Plan . This is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance.

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

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

Try the LivePlan Method for Lean Business Planning

Now that you know the basics of business planning, it’s time to get started. Again we recommend leveraging a Lean Plan for a faster, easier, and far more useful planning process. 

To get familiar with the Lean Plan format, you can download our free Lean Plan template . However, if you want to elevate your ability to create and use your lean plan even further, you may want to explore LivePlan. 

It features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. 

Check out how LivePlan streamlines Lean Planning by downloading our Kickstart Your Business ebook .

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Plan Your Business

A well-written business plan is your path to a successful business. Learn to write, use, and improve your business plan with exclusive guides, templates, and examples.

What is a business plan?

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What should i include in my business plan.

You must have an executive summary, product/service description, market and competitive analysis, marketing and sales plan, operations overview, milestones, company overview, financial plan, and appendix.

Why should I write a business plan?

Businesses that write a business plan typically grow 30% faster because it helps them minimize risk, establish important milestones, track progress, and make more confident decisions.

What are the qualities of a good business plan?

A good business plan uses clear language, shows realistic goals, fits the needs of your business, and highlights any assumptions you’re making.

How long should my business plan be?

There is no target length for a business plan. It should be as long as you need it to be. A good rule of thumb is to go as short as possible, without missing any crucial information. You can always expand your business plan later.

How do I write a simple business plan?

Use a one-page business plan format to create a simple business plan. It includes all of the critical sections of a traditional business plan but can be completed in as little as 30 minutes.

What should I do before writing a business plan?

If you do anything before writing—figure out why you’re writing a business plan. You’ll save time and create a far more useful plan.

What is the first step in writing a business plan?

The first thing you’ll do when writing a business plan is describe the problem you’re solving and what your solution is.

What is the biggest mistake I can make when writing a business plan?

The worst thing you can do is not plan at all. You’ll miss potential issues and opportunities and struggle to make strategic decisions.

Business planning guides

Learn what a business plan is, why you need one, when to write it, and the fundamental elements that make it a unique tool for business success.

Types of business plans

Explore different business plan formats and determine which type best suits your needs.

How to write a business plan

A step-by-step guide to quickly create a working business plan.

Tips to write your business plan

A curated selection of business plan writing tips and best practices from our experienced in-house planning experts.

Explore industry-specific guides to learn what to focus on when writing your business plan.

Create your plan the paint by numbers way.

Business planning FAQ

What is business planning?

Business planning is the act of sitting down to establish goals, strategies, and actions you intend to take to successfully start, manage, and grow a business.

What are the 7 steps of a business plan?

The seven steps to write a business plan include:

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

What should a business plan include?

A traditional business plan should include:

• An executive summary
• Description of your products and services
• Market analysis
• Competitive analysis
• Marketing and sales plan
• Overview of business operations
• Milestones and metrics
• Description of your organization and management team
• Financial plan and forecasts

Do you really need a business plan?

You are more likely to start and grow into a successful business if you write a business plan.

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

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

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Top 10 Characteristics Of An Effective Business Plan

If you’re starting a new business, chances are you’ve already got a good idea of what you want your company to be. You know how it will make money and how you want to grow it. But there’s one thing that can make or break your company before it even takes off: the business plan.

A well-constructed business plan serves as a blueprint for your company and sets the stage for its success. It helps you organize your ideas, communicate them clearly to others, and get buy-in from investors or lenders.

A good business plan can also help you identify potential problems that might go unnoticed until it’s too late.

So what makes up an effective business plan? Here are some key characteristics of an effective business plan :

Characteristics Of Effective Business Plans

When writing a business plan, you need help knowing where to start. After all, many aspects of running a business need to be covered! But there are ten characteristics that every effective business plan should have.

1. It’s Comprehensive- Characteristics Of Effective Business Plans

When writing a business plan, especially if you’re a first-time entrepreneur, you may have to include every possible detail about your business. And while it’s vital to cover all the bases, it’s also important to remember that some things are better left out.

An effective business plan should be comprehensive without being overwhelming. A comprehensive business plan will cover everything from who you are and what you offer to how you measure and achieve success. It should also include a detailed list of the risks associated with your venture and how you will mitigate those risks.

To be successful in your business, you have to have all the information about your product or service and what makes it unique so that when someone asks about it, you can give them a concise answer without having to pause for thought or research their part.

2. It’s Detailed- Characteristics Of Effective Business Plans

Why is a detailed business plan so important? It’s simple: the more details you include, the easier it will be for you to decide about your business.

The more specific your plan is, the more likely you’ll have thought through all the various aspects of starting up a company and considered how each might impact your business.

A detailed plan lets you see the results of various courses of action. Whether those results are worth pursuing also helps you identify any weaknesses in your strategy . You may find out that one idea isn’t working for several reasons (or all of them!).

In addition, a detailed plan helps clarify what resources you need to make your business successful. When working on an outline or draft, it can be hard to know what information is relevant and what isn’t.

But once your plan is in its final form, it should be easy for anyone who reads it to understand. The plan should include information you need to know in launching your business.

3. It Has A Strong Executive Summary- Characteristics Of Effective Business Plans

The executive summary is the first thing readers see when they open your business plan. They’ll use it to decide whether or not they want to read further. If you need more information in your executive summary, a reader will likely skip over it and move on to another document.

The goal of an executive summary is to convince your audience that you’re qualified and capable of achieving the goals laid out in your business plan. You want them to understand why they should stick around and read more.

4. It’s Easy To Read- Characteristics Of Effective Business Plans

One of the essential characteristics of a good business plan is that it is easy to read but detailed. You should write a  business plan in a simple, easy way to understand. This allows the reader to grasp what information they need without wading through text reams.

However, it’s also crucial that the business plan contains enough detail so that readers know what they are getting into if they decide to invest in your company.

If your business plan is too short on details, it can give off a “shady” vibe, and investors will avoid investing with you. On the other hand, if your business plan contains too much information, it may overwhelm potential investors and scare them away.

5. It’s A Good Fit For The Company’s Needs- Characteristics Of Effective Business Plans

Every company is different, and every business should tailor every plan to the company’s specific needs. How can you expect your business plan to address those needs if you need to know them? This characteristic is needed because it’s crucial to ensure that the business plan fits the company’s needs.

A good business plan helps a company achieve its goals and make money, but if it doesn’t work with the company’s needs, then it can be counterproductive.

For example, suppose a company has big dreams of expanding and hiring new employees to grow. Still, its business plan is focused on cutting costs and reducing expenses instead of increasing revenue. In that case, it won’t achieve its goals.

6. It’s Visually Appealing- Characteristics Of Effective Business Plans

Regarding business plans, visuals can make or break your pitch. If you take the time to create a comprehensive and well-thought-out plan, don’t you want it to be appealing?

First, remember that graphics aren’t just for decoration. The graphics are there to help people understand what they’re reading.

For example, if you’re discussing how an employee training program will work, use pictures of people at their desks doing different activities. If your plan involves a new product launch, show how the product looks next to its competition.

Another thing to remember is that visual appeal isn’t just about images. It can also mean using colors strategically. If you’re trying to convey confidence in your company’s ability to handle risk-taking, try using a blue color instead of a dull gray one when discussing the subject matter!

Your business plan should be easy on the eyes with classic formatting, simple fonts, and a clean layout. If you’re using Word or Google Docs, consider using a template that shows this format in its best light.

If you’re trying to impress investors or lenders, try hiring a designer to help with your presentation. It makes all the difference!

7. It Includes An Action Plan With Milestones And Metrics- Characteristics Of Effective Business Plans

The best business plans include an action plan with milestones and metrics, which helps you stay on track and allows you to measure your progress.

Including an action plan with milestones and metrics in your business plan will help you achieve your goals . It’s easy to get distracted or lose focus on what matters most, but if you have a clear idea of what needs to be done and when then it’s easy to keep moving forward.

It also helps keep you accountable. You can’t just write down something like “I’ll implement my social media strategy” and not do it! You’re forced to think about how long it takes for people to see the effects of their actions, which makes them more likely to stick with them over time.

8. It’s Flexible- Characteristics Of Effective Business Plans

When you’re writing your business plan, it’s important to remember that things change. You won’t be able to predict everything that will happen to your business, and you’ll need to be flexible enough to keep up with the unexpected.

A good plan can adapt and adjust as new information comes in. If you’re starting a new business, there are many things that you will need help to anticipate or predict. You must update your plan as you learn more about the market or discover what works best for your company.

9. It Considers Current Trends In The Industry

When you’re writing your business plan, it’s important to consider current trends in the industry. This will help you avoid catching up in what worked last year and missing out on new opportunities that could make your business more successful.

Taking stock of current trends will also help you stay aware of what other companies are doing and how they’re doing it. You don’t want to reinvent the wheel.

You want to ensure that you’re allocating your resources in a way that has proven effective for other businesses. That means paying attention to what’s happening outside your own four walls.

10. It Sets Smart Goals (Specific, Measurable, Achievable/Actionable, Realistic/Relevant, And Time-Bound)- Characteristics Of Effective Business Plans

Smart goals are a crucial part of the business plan if you need to set SMART goals to be able to achieve your goals effectively.

Smart goals are specific. They are clear and concise, so everyone on your team knows what goals they are working to reach.

Smart goals are measurable. You can’t achieve something if you have a way of measuring it! You need to know how much progress you’ve made and where to go to achieve your goal.

Smart goals are achievable/actionable. If you can’t achieve the goal, it’s not worth setting. This is why setting realistic, attainable goals is essential to help move your business forward rather than just dreaming big!

Smart goals are realistic/relevant, and time-bound. They are realistic within your context (that means no crazy stuff), relevant (it has value), and have a timeline attached so everyone knows when to get things done!

Why Effective Business Plans Are Essential?

If you’re starting a business, an effective business plan is essential to ensure your venture is successful. Here are some reasons why it’s crucial to have a strong business plan:

1. Business Plan Helps You To Focus On What You’re Trying To Achieve- Why Effective Business Plans Are Essential

A business plan helps you to focus on what you’re trying to achieve. With a business plan, tracking your goals and ensuring that the things you’re working on are helping you get it is easier.

A business plan helps you do this by setting out what your company will do, how it will do it, and why it’s essential. It also enables you to prioritize. You can look at your overall vision for the company and decide if certain parts of your plan are more important than others at any given time.

Plus, a business plan doesn’t just help you focus on the future. It also allows you to review past progress and identify areas where things went wrong so they don’t happen again!

2. Business Plan Helps You To Identify Your Goals And Priorities- Why Effective Business Plans Are Essential

Finding the time to plan for the future is challenging when you’re running a business, especially if you’re just starting. But if you need to take the time to identify your goals and priorities, avoid finding yourself with no direction and no way of deciding what’s important.

A business plan will help you set concrete goals for both short-term and long-term success. It also helps keep things in perspective when things don’t go as planned (and rarely do).

If you set out a detailed business plan, you’ll know what steps to take next and what resources are needed for future growth. This will make it easier for you to decide how best to proceed with specific projects or activities within your company.

3. Business Plan Helps You To Identify Strengths, Weaknesses, Opportunities, And Threats- Why Effective Business Plans Are Essential

Business plans are essential for any business to grow and succeed. To build a successful business, you must clearly understand your company’s strengths, weaknesses, opportunities, and threats (SWOT). You can find out these critical factors by creating an effective business plan.

A good business plan will help you identify your SWOT. In other words, it will help you know your strengths and weaknesses and the opportunities that could be available in your target market or industry. This will help you determine what products or services you should offer potential customers.

Once you know these crucial factors, you can take action and make necessary changes to improve upon them. For example, if one weakness is too many competitors in the industry, then maybe it’s time for you to change something to make your company stand out.

You can do this by developing new ways of doing things or even launching new products/services so customers will notice their products/services more than their competitors.

4. Business Plan Helps You Ensure You Have The Resources Needed For Success- Why Effective Business Plans Are Essential

 A well-written plan will show investors and other stakeholders that you have thought through starting your business and planned for its growth. It will also show them that you are serious about making this business succeed, which can help them feel more confident in investing in your company.

When your business plan includes a budget, it will be easier to know how much money you need to start up and maintain your business. A well-written plan will also help you identify what resources your business needs, such as staff members or equipment. You can then use this information to determine if a lack of resources will be an issue that could prevent success.

Moreover, a well-written business plan can help you determine whether or not you have the resources needed for success. For example, if you don’t have enough capital to cover unexpected costs, such as paying employees during slow times or replacing equipment when it breaks, then perhaps this isn’t the right time for you to start a new business venture.

Additionally, a well-written business plan allows you to get feedback from professionals who can help improve it before presenting it to people interested in funding or investing in your company.

This ensures that all areas of your plan are covered, and there are no gaps or missing information that could cause issues later on down the road when things start getting more serious with investors and lenders.

5. Business Plan Helps You To Make Decisions Based On Data Rather Than Guesswork Or Intuition Alone- Why Effective Business Plans Are Essential

Business plans are essential because they help you make better decisions. If you’re a small business owner, you’ve probably experienced the frustration of needing more information to decide.

You may have had to go with your gut (or maybe even your best guess) when making a decision that could significantly impact your company’s future.

This is why it’s crucial to have an effective business plan before making significant changes or decisions . For example, if you have a hunch that your product will sell well in the northeast but haven’t sold anything there yet, your business plan can help you decide whether or not to expand into that region.

If you need to decide whether to offer free shipping on all orders over $50 or just those over $100, then again, a business plan can help you decide which strategy is best for your company’s bottom line.

A good business plan will give you all the information you need to make informed decisions about your company’s direction, finances, and operations. A good business plan will also help you avoid mistakes, such as hiring someone who isn’t a good fit for their role or spending money on something that benefits the company less than expected.

6. Business Plan Allows You To Make Informed Decisions Confidently- Why Effective Business Plans Are Essential

You will make better decisions if you have a business plan in place. Indeed, you can’t see into the future, but having a clear plan for what you want to achieve and how you plan to get there allows you to make educated guesses about which decisions are likely to lead to success.

When you’re in the thick of things, it’s simple to become distracted by new opportunities and lose sight of the bigger picture, but having a distinct vision of what success looks like helps keep everything on track.

An effective business plan lets you know exactly where your company is headed and how it will get there. You’ll be able to confidently make decisions that they’re the best possible way forward for your company.

The best part about this is that once you’ve created a solid business plan and have an idea of your goals, it will be easy for you (and anyone working on the project) to know what needs to be done next.

7. It Gives Investors A Clear Understanding Of What They Are Investing In- Why Effective Business Plans Are Essential

One of the most important reasons why is an effective business plan essential is because it gives investors a clear understanding of what they are investing in. When you have a strong business plan, you can use it to attract funding from investors and banks.

Investors want to know that their money is going towards something worthwhile and not just being thrown away on some terrible idea. If you don’t do this, you may find yourself with investors and enough funding to continue operating the company.

A good business plan will also help you when you apply for bank loans. Banks want to see that you have a solid plan for how your business will operate and understand how much money it will take to start and keep running. A strong business plan can help convince them that you are serious about starting your own company and making it work.

Additionally, a business plan also serves as a road map for employees who are new to a company or project. It helps them understand where their efforts fit into the overall picture and guides their expectations.

This helps employees work more efficiently because they don’t have to guess their role in the company; they know what’s expected of them, when they should expect it, and how much time will be invested in each task or goal.

What Happens When A Business Doesn’t Have An Effective Business Plan? 

As we all know, a business plan is a document that outlines all of the most critical aspects of your business. This includes the goals and objectives you hope to accomplish, the strategies you’ll use to achieve those goals and a plan for what happens if things don’t go according to plan.

It’s essentially a road map for your company and one of the most critical tools in your arsenal to ensure that all aspects of your business function effectively.

But what happens when a business doesn’t have an effective business plan? Unfortunately, it can mean some big problems down the line.

1. A Business Without An Effective Business Plan Will Not Be Able To Grow As Fast As It Wants To

 A business that does not have a business plan will not be able to determine where it wants to go and how to get there. They will need help deciding on their goals and how to achieve them.

A business without an effective plan will simply have goals but no way of achieving them. This means they will not be able to grow as fast as they want because they will need to learn how to achieve those goals or what steps to take to reach them.

2. A Business Without An Effective Business Plan Will Struggle To Attract Investors And Customers

The first thing that will happen when a business needs an effective plan is struggling to attract investors and customers. A clear, well-defined strategy for growing your company is vital for getting new clients on board and attracting investors who can help you scale up your operations. Investors want to see that you know what you’re doing. That there is a plan in place so they can feel confident that their money is going toward something worthwhile.

3. A Business Without An Effective Business Plan Will Not Be Able To Compete With Other Companies In Its Industry

It’s no secret that the business world is competitive. If you will be in it, you must know what you’re getting into and be prepared to compete with other businesses.

With a plan, your business will be able to compete and also struggle to survive.

A business with an effective plan will likely make better decisions about allocating resources, leading to wasted money and time on projects that ultimately fail.

Without a plan, you will not know what equipment or staff members you need and where they should be located within your company. Your company may end up short on employees at one point or another during its lifespan. When this happens, it can cause severe problems for your bottom line.

With an effective business plan, you’ll be able to determine how much revenue each operating unit generates and ensure that these units are profitable enough to continue operating without any additional investment from ownership or outside sources.

4. A Business Without An Effective Business Plan Will Struggle To Get The Attention Of Potential Employees

When a business has an effective business plan, the company will be able to get the attention of potential employees. Why? Because without a well-thought-out plan, it’s easier to show potential employees how they would fit into your organization and their roles.

It’s also easier to convince potential employees that they should take a chance to join your team if you have a solid plan for how you want your company to grow and evolve.

If someone is considering making a career move and looking for their next opportunity, they need to know that there’s more than just “hiring” going on here. They need to know that there is a future for them with your organization beyond just this one job.

5. A Business Without An Effective Business Plan Will Struggle To Set Realistic Goals For Itself

When a business has an effective business plan, it can set realistic goals. There is a clear vision of where it wants to go and how it will get there. When businesses have an effective business plan, they will also know what resources they need to succeed and how much time and money it needs to reach their goals.

This is why so many businesses fail. They set unrealistic goals for themselves and need more resources or time to achieve them. If you want your business to succeed, create an effective business plan outlining what you want from your company and how you will get there!

6. A Business Without An Effective Business Plan Will Have Difficulty Staying Focused On Its Core Competencies As A Company

A business must have an effective business plan to stay focused on its core competencies as a company. A business plan provides a blueprint for the overall direction of your company, and it helps you stay focused on what’s important. The more you can focus on your strengths and weaknesses, the more likely you will succeed.

A company’s mission statement clearly defines its goals and objectives. With this information, employees may feel confident about what they need to do for the company to grow. This confusion can lead them down the wrong path or result in poor decision-making processes that might cause harm to the organization.

Frequently Asked Questions- Effective Business Plan

What are some common mistakes people make when creating a business plan.

There are a lot of mistakes you can make when you’re creating a business plan.

A big one needs to understand your audience. If you’re writing your plan for investors or lenders, they need to see that you’ve done the research and have thought things through. However, if you’re writing it for yourself or your team, they don’t need to see some details. They just want to know what needs to happen next.

Moreover, another common mistake people make when creating a business plan is not thinking about their vision for the company and how it will grow.

They spend so much time worrying about how they will get started or what they will do with the profits from their first year in business. But you might get stuck as an entrepreneur if you don’t know where your company will go.

Another mistake is to be honest about what can go wrong and what will go wrong. You should be able to anticipate problems, but it’s important to remember that no matter how much planning you do, there will always be unexpected challenges.

It’s better to acknowledge this upfront before anyone gets too far down the road than try to deal with it later when everyone’s feeling frustrated and stressed out by their lack of foresight.

How Often Should I Update My Business Plan?

Every year or once a year, you should update your business plan. It’s a good idea to keep a file of all the updates and changes you’ve made to the program over time, so if you ever want to go back and see when something was added or changed, it’s easy to find.

You may also want to print out an updated copy every year to reflect on your goals at that time.

If your business plan is outdated, the business owner may need the correct information to make good decisions. An out-of-date business plan can make it difficult for you to get funding from banks and other lenders.

Where Can I Get Help Creating A Business Plan For My Business?

Here are some tips on where to get help creating a business plan for your business:

1. Consult an expert: There are many people out there who specialize in helping entrepreneurs write their business plans, as well as people who can assist with other aspects of starting up a new company. An excellent place to start is by asking for recommendations for someone who has worked with other entrepreneurs like yourself.

2. Go online: Many websites offer tools, templates, and business plan advice. If you want help from someone who knows what they’re doing but doesn’t have time to consult them directly, this is a great option to save time and money!

3. Attend workshops: Many conferences hold workshops specifically designed for those interested in starting their businesses. These can be excellent opportunities for learning more about what goes into writing a business plan and getting some hands-on experience before diving headfirst into the process.

4. Ask others: If you still need to figure out what goes into a business plan, ask someone with experience writing one! They can give you some ideas on how to get started and offer advice on how best to approach the task at hand.

Top 10 Characteristics Of An Effective Business Plan – Conclusion

An effective business plan must be clear, concise, and well-organized. Once you have a clear vision of what you want to achieve and what you need to do to get there, it is time to get down to the nitty-gritty of your business plan.

Let’s start by writing down all the significant points in one place, making them easy to find. Then, create an outline based on those points. You should also review your plan and ensure it is free of spelling or grammatical mistakes. Finally, remember that your business plan is a living document. It will change as your business changes and grows over time!

Top 10 Characteristics Of An Effective Business Plan – Recommended Reading

Strategic Pillars: What Are They, Why They Matter

116 Strategic Questions to Ask Senior Leaders – With Sample Answers

Strategic Planning- Definition, Steps, Examples, And Tips

Updated: 12/18/2023

Meet The Author

Danica De Vera

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Creating a business plan

Key takeaways

• A business plan is a roadmap that helps you structure, run, and grow your business, providing the clarity you need when getting started. 
• Business plans typically define your mission and vision, services, value proposition, target market, competition, marketing and sales strategy, financial plan, and business structure. 
• Some small businesses may require a more formal business plan, particularly if seeking funding or investors, while a freelancer may prefer something less comprehensive.

What is a business plan?

A business plan is usually relevant for 3 to 5 years. You may want to update it as your business evolves.

What are components of a business plan?

• Your mission and vision 
• Our services 
• Your value proposition 
• Your target market 
• Your competition 
• Your marketing and sales strategy 
• Your financial plan 
• Your business structure

How to write a business plan

A mission statement outlines what your business does and what purpose it serves today. A good mission is clear and concise, with intentional language that’s action oriented. Your vision statement is more aspirational, articulating an ideal future state in 5 to 10 years. A mission and vision statement can help to focus your business objectives and can serve as a North Star to guide business decisions. Traditional business plans usually include these in the executive summary.

Freelancers may benefit from developing personal mission statements as well. These focus on why working for yourself is important: 

• Have more freedom and flexibility 
• Take more control over your time and income 
• Fulfill a creative passion 

2. Define your business’s products and services

What does your business do? What are the products and services you plan to sell? Your business plan should clearly define what your products and services are, and how they are part of your business’s overall mission and vision.

Do you plan to offer more or different products or services in the future? If so, include that in your plan as well. It may be a good idea to start small with a limited set of products or services to build expertise and credibility, then layer on additional services that expand your value offer.

3. Create a value proposition for your business

When defining your business’s value proposition, consider these two questions: 

Your value is more than the product or service you offer. It’s the customer need you address. Be specific about the problem your business will solve, and make sure it’s a high priority one for your target market. Focus on the end impact to the client—for example, a landscaping company doesn’t just mow the lawn, it “creates a backyard oasis” and “gives you your Saturday back.” 

What will drive customers to pick you rather than someone else? Maybe it’s speed. Or perhaps it’s extensive experience in a particular topic or industry. Or it could be proven impact.

Once you determine your value and what makes you special, you can then use that when marketing your services and speaking to clients.

• Demographics – their age range, gender, job title, industry, education level, nationality, and language 
• Geographics – where they work and live (if relevant) 
• Psychological aspects – their beliefs and attitudes; interests and passions; hopes and aspirations; problems, challenges, and concerns; and motivations related to their job title and industry 
• Behaviors – the types of content they consume (like written, audio, video), and if they prefer to engage with it on a desktop or mobile device

Creating buyer personas 

Consider breaking your target market into smaller groups based on common needs or behavioral characteristics. For example, you may be a copywriter who works for small tech startups, environmental non-profits, and large government organizations—each of these client groups will want something slightly different from your product.

One technique is to build a buyer persona—a semi-fictional person within your target market—that reflects common characteristics based on real data. Once developed, you can refer to your persona as you build out your product, sales, and marketing strategies to ensure you’re considering your customer needs and preferences.

5. Understand your business’s competition

Be sure to identify and understand your competition when creating a business plan: How many other freelancers or businesses are offering similar products or services in your market? What other businesses are solving similar problems? What makes you different? Determine who your competitors are and the edge you have against them.

6. Define your marketing and sales strategy

You’ll need a clearly defined strategy for marketing your products and reaching your customers. You probably already have experience and projects you’re proud of, so how do you want to showcase your capabilities and build credibility? Consider communication, sales, and distribution channels: Do you plan to start with a website detailing your services or an email campaign to your contacts? How will you set (and achieve) sales targets? How will a sale happen? You’ll likely use a combination of tactics to attract and retain your clients—here’s where you define them.

7. Establish a financial plan for your business

Your financial plan will help ensure that your business will be sustainable in the long term. While many businesses don’t make money right away, you’ll want to lay out a path to profitability through an analysis of cash flow, revenue, and expenses. This plan will usually include projected profit and loss and projected cash flow for the first few years, as well as a break-even analysis.

Learn more about financial planning for your business, including 5 tips to manage your business finances and creating a business budget to manage cash flow .

8. Decide how to structure your business

Your business structure affects how much you pay in taxes, your ability to raise money, the paperwork you need to file, and your personal liability. To get a tax ID number, you’ll need to make this decision. Some common business structures include: 

• Sole proprietorship – Often the default entity for freelancers and the easiest structure for a one-person business, giving you complete control of your business. Does not separate business assets from personal ones, meaning you’re personally liable for any debts and obtaining funding may be more difficult.
• Partnership – Can be formed with one or more people, includes different types that may have different tax and liability implications. 
• Limited liability company (LLC) – May be appropriate if you’d prefer to protect your personal assets in the event of bankruptcy or lawsuits. Also, may be required by certain investors or lenders. 
• Corporation – Different types include B, C, and S corps, as well as non-profits. Provides its owners with limited liability but tends to be much more complex.

According to a 2023 report from the SBA, most businesses without employees are sole proprietorships (86.5%) followed by partnerships (7.4%) and S corporations (4.6%). Meanwhile, most small businesses with employees are S corporations (52.4%), followed by other types of corporations (22.3%) and sole proprietorships (13.3%).*

You may want to consult with a lawyer (either in-person or online) to help form your business structure. Find a lawyer near you  

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8 Qualities of a Good Business Plan

By katie cline.

One of the first things we ask each new client is whether they have an up-to-date business plan. This puzzles some people. “What does my business plan have to do with redoing my website, or getting more leads?” More than you might think.

Many owners think of a business plan as a complex document that’s really only necessary if you are approaching a bank or investors for money. While business plans are certainly used to obtain funding, their main purpose is to document what your business is, what you plan to do, and how you plan to do it so that all of the members of your company are operating within the same framework. 

“ The main purpose of your business plan is to document what your business is, what you plan to do, and how you plan to do it. “

Creating this clarity can increase your likelihood of success. A study in Harvard Business Review found startups who wrote formal plans were 16% more likely to achieve viability than the otherwise identical non-planning entrepreneurs.

Writing a business plan can be done with as much or as little formality as you need for your company. A good business plan doesn’t need to be a 50+ page formal document to do its job. Regardless of length, we have found in our experience working with startups, small businesses, and enterprises, that there are eight things that all good business plans accomplish.

What does a good business plan do?

Define your goals.

What is your business setting out to achieve? 

From your overarching mission statement, to your top priorities for the next five years, your business plan should document these with as much specificity as possible. This includes defining what metrics you will use to measure these goals. Doing this allows you to align everyone in your company around clear initiatives.

Create a business roadmap

Once you have defined your goals, your business plan should spell out how you intend to get to these milestones. Say your goal is to increase your annual revenue by $5 million in the next 5 years. How are you going to grow your revenue to this level? Are you going to introduce a new service or distribution channel to get there? What operational support will that entail? Do you have the team members you need to achieve this goal? These are the types of questions we seek to answer when crafting a business plan.

Document assumptions about your business for consensus and revision

By recording your assumptions as you build your business plan, you can determine where your team operates on a shared understanding and where more clarity and consensus are needed. 

This also gives you the opportunity to periodically check which of your assumptions are still valid. Did your revenue projections assume that your sales reps would be able to achieve a 25% win-rate, but the real rate has consistently proven to be around 15%? Then you know where your plan needs to be adjusted as you gain more accurate data.

Set expectations for how you want your company to operate

The level of detail you include in your business plan about your company’s operations can start simple and increase over time as you identify and define processes that are crucial to your business. But even when you’re just starting out, it is helpful to document what is important to how your business operates. What are the values that guide what you do and how you do it? The more clearly this is defined, the easier it will be for your team members to operate according to your expectations without constant oversight or discussion.

Establish awareness of the competitive environment

Your business doesn’t operate in a bubble. In order to be successful, your plan needs to address where your firm fits into the marketplace and what opportunities and threats exist. While we often do a lot of competitive research, we find that a SWOT analysis is a helpful way to quickly communicate your company’s position within the competitive environment to everyone on the team.

“ Your plan needs to address where your firm fits into the marketplace and what opportunities and threats exist. “

Allow for ongoing accountability

By documenting your goals, your roadmap for achieving them, and the metrics you will use to measure your progress, your business plan becomes a tool for ongoing accountability. As you define the key metrics for each goal in your business plan, make sure that you have the tools and systems in place to measure this data. If not, determine what you need in place to measure your performance according to your plan. 

You should revisit your business plan regularly (at least once a year, but ideally once a quarter) to track your progress and to make adjustments as needed.

Make you think about all aspects of your business

By outlining your assumptions for all areas of your company (product/services, operations, sales & marketing, staffing, management, and finance) your business plan ensures that you think about all of them and how they align. It’s easy for a leader to get focused on one particular area, either because it is the top priority or because it’s their area of expertise, and forget how the other areas are needed to support this. 

For companies just starting out with one or two people, it’s easy to think that you don’t have much to document about staffing and management. But if your goal is to grow the company beyond what the founders alone are able to support, then you need to think about what milestones will prompt you to start hiring and which roles you will prioritize first to support your goals.

Set the foundation for your marketing and sales strategies and tactics

Strategic marketing isn’t possible if you don’t have your business goals and overall strategy in place. We often see marketing and sales tactics used in an effort to paper over business problems, such as not having clearly defined services or not having a clear target market.

Your Strategic Marketing Plan is an extension of your business plan. Taking a business-first approach to marketing and sales planning sets you up for greater success and less wasted effort.

“ Strategic marketing isn’t possible if you don’t have your business goals and overall strategy in place. “

If you already have a business plan, look it over to see if it is doing everything listed above. 

If you don’t have a business plan, now is the perfect time to start one! 

We have put together a handy checklist to help you optimize your business plan or write one for the first time. You can download it here .

Of course, if you would rather have someone else work on your business plan, we are happy to help! We can review your existing business plan or write one from scratch. Visit our business planning page for more details.

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Encyclopedia of Humanities

The most comprehensive and reliable Encyclopedia of Humanities

Business plan

We explain what a business plan is and its main characteristics. In addition, we describe how to create a business plan and the difference with a business model.

What is a business plan?

A business plan is a written document containing the business , financial and structural analysis of the main aspects of a company . It works as a road map for implementing the previously defined business model.

A business plan makes it possible to assess whether the company's mission is compatible with the business context and to evaluate the feasibility of the project . It may be targeted for a start-up venture or for the launch of a specific project plan of an existing company.

The plan takes into account the whole business and financial process : the study of the market in which the activity will be developed, the necessary infrastructure and human resources, the geographical location of the company, the estimate of sales and expenses, among other aspects.

• See also: Company vision

Characteristics of a business plan

The main characteristics of a business plan are:

• It allows estimating startup and investment capital.
• It allows assessing the productive capacity and the expenses necessary for the operation of the company.
• It allows calculating the profit margin required to ensure survival.
• It allows minimizing errors and foreseeing potential problems that may arise.
• It may be drawn with professional help: an accountant, a business administrator or an economist, which increases the probability of the company's success.
• It allows collecting key information to be used by a company's management in the medium and long term.

A business plan should answer questions like:

• What does our business offer that is important or valuable to the market ?
• Is there already a better product or service in the market?
• Can a better product or service be offered?
• How can the company make a profit?
• How can the business grow?

Business model vs. business plan

A business model is defined prior to the development of a business plan . The business model brings value to customers and establishes how they will interact with the company.

For example: A company may offer its products through catalog sales, online stores, franchises, retail outlets, or a combination of different business models.

A business plan is a detailed document containing all the general and essential information for the decision-making process by a company's management . Following a business plan, a company's leaders can plan and organize multiple processes, according to each areas’ tasks.

Based on a business model, a business plan can be drawn to organize and manage a company's processes in order to help it achieve its objectives.

How is a business plan written?

A business plan is a document that may vary depending on the type of company. It may be a short or extensive document containing research reports, analysis, conclusions, charts and graphs to organize and summarize contents.

Broadly speaking, the following steps are part of the overall planning process:

• Market research and analysis.
• Review of the project's status, mission, vision and objectives.
• Collection of information on the advantages and disadvantages of the company’s products and services as compared to its competitors.
• Summary of the business strategy.
• Detail of the members of the Board of Directors.
• Business model and business management.
• Financial and business plan.

Example of a business plan

Below is a case study detailing a business plan:

• Company . Professional pet photography service.
• Market research of the competition . It has been detected that direct competitors do not offer home photography service, and that 30% of current customers have asked about this type of service. This could be a competitive advantage for our business .
• Mission . To generate happiness in people who buy a portrait of their pet. To be recognized as the best supplier in the south.
• Vision . To deliver the same high quality in all services, and bear a hallmark.
• Objective . To offer a higher service than already existing, with excellent background quality, editing, selection and presentation of the final product to the client.
• Weak points . Sudden changes in the local economy influence both the supply of materials and the household economy of customers.
• Strong points . There are few suppliers with an artistic hallmark, and who maintain high quality at all stages of the process.
• A private studio in a popular location of the city.
• A professional photographer and editor, and an assistant.
• Business model and business management . The physical structure and the geographic location where the company will be established have been defined. It will be divided into three departments: administration, production and post-production, the number of employees required being four.
• Financial and business plan . The investment needed to start the business and run it during the first year has been estimated at US$12,000, which includes rent of premises, new equipment, an accountant, two assistants and extra expenses. A six-month budget of US$2,000 has been estimated to cover equipment relocation services and the logistics of completed work.

Importance of a business plan

A business plan is a key tool to manage a company . The act of creating a business plan does not per se guarantee success; however, companies that operate without a specific plan usually require more time, investment, and expenses to grow and develop. A business plan is a guide that ensures the effective development of an organization .

• Ross, W., Westerfield, R. & Jaffe, J. (2009). Finanzas corporativas . 9º edición. McGraw Hill. México.
• Berry, T. (2022). What is a business plan? . https://articles.bplans.com .
• Bplans (2016). What is a business plan? (video). https://www.youtube.com .
• Bello, E. (2022). Business plan: ¿qué es, por qué lo necesitas y cómo crear uno? . https://www.iebschool.com .

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Qualities of an Exceptional Business Plan

A business plan is the blueprint for your entrepreneurial journey. It outlines your goals, strategies, and the path you’ll take to achieve success. However, not all business plans are created equal. An exceptional business plan possesses specific qualities that set it apart and increase your chances of turning your dreams into a thriving reality.

As a  business plan writer and consultant , I’ve crafted over 15,000 plans for a diverse range of businesses. In this article, I’ll be sharing my wealth of experience that define an outstanding business plan, providing you with the guidance you need to create a road map to success.

1. Clarity: A Crystal-Clear Roadmap

2. conciseness: keep it lean and focused, 3. realism: grounded in reality, 4. alignment: cohesion across sections, 5. adaptability: ready for change, 6. measurability: define success, 7. insightfulness: in-depth analysis, 8. honesty: acknowledge risks.

A great business plan communicates your vision and strategies with absolute clarity. Avoid jargon and complex language to ensure that everyone, from team members to potential investors, can understand your plan.

• Expert Tip 1: "Clarity is key. A well-written plan is useless if no one can understand it. Make it simple and straightforward." - Sarah Smith, Business Strategist.

A great plan is concise and to the point. Avoid unnecessary details and lengthy explanations. Focus on conveying essential information that drives your business forward.

• Expert Tip 2: "Brevity is the soul of wit, and business plans are no exception. Keep it lean and impactful." - John Stevens, Business Coach.

An exceptional business plan is grounded in reality. Ensure that your goals, financial projections , and strategies are realistic and achievable. Avoid over-optimism that could erode trust.

• Expert Tip 3: "Realism breeds confidence. Investors and stakeholders want to see that your plan is attainable." - Emily Turner, Business Analyst.

Looking for someone to write a Business Plan?

Our Award-winning business plan writers will help you achieve your business goals.

All sections of your plan should align seamlessly. Your mission , goals, strategies , and financial projections should harmonize to create a coherent narrative that tells the story of your business.

• Expert Tip 4: "Each part of your plan should reinforce the other. It's like building a puzzle where every piece fits perfectly." - Mark Thompson, Growth Strategist.

A great plan is adaptable. It acknowledges that circumstances may change, and it outlines how your business will respond to unexpected challenges and opportunities.

• Expert Tip 5: "Flexibility is a sign of a well-prepared plan. It shows that you're ready to navigate the twists and turns of business." - Laura Martinez, Marketing Expert.

Struggling with Your Business Plan?

Checkout these business plan templates to get an idea!

Exceptional plans establish clear metrics and key performance indicators (KPIs) to measure progress. This ensures that you can track your success and make data-driven decisions.

• Expert Tip 6: "Measurability keeps you on track. It's like having a GPS for your business journey." - David Reynolds, Operations Specialist.

A top-notch plan includes insightful market analysis and a deep understanding of your industry. It demonstrates that you’ve done your homework and know your market inside out.

• Expert Tip 7: "Insightfulness is a competitive advantage. It shows you're prepared to make informed decisions." - Susan James, Financial Analyst.

Read more: how to do market analysis of a business.

Great plans don’t shy away from potential risks and challenges. They address them head-on and outline strategies for mitigation. Honesty builds trust with stakeholders.

• Expert Tip 8 : "Honesty is the best policy, especially in business plans. It's a sign of transparency and integrity." - Robert Clark, Risk Management Consultant.

Get specialized business plan writing assistance now!

In summary, an exceptional business plan possesses qualities like clarity, conciseness, realism, alignment, adaptability, measurability, insightfulness, and honesty. By embracing these qualities, you’ll create a plan that not only guides your business effectively but also instills confidence in your team and stakeholders. Your business plan is more than a document; it’s a roadmap to your organization’s success.

If you haven’t tackled questions like these, then you haven’t genuinely crafted a plan that you can confidently manage. This is where the Four C’s – Capabilities, Capacity, Constraints, and Culture – become significant.

An exceptional business plan is clear, concise, realistic, and actionable. It should be well-written and easy to understand, and it should provide a comprehensive overview of the business, including its goals, strategies, and financial projections.

The key elements of an exceptional business plan include:

• A clear and concise executive summary.
• A detailed description of the business.
• A well-thought-out marketing and sales strategy.
• Detailed financial projections.
• Professional formatting and editing.

Some common mistakes to avoid when writing a business plan include:

• Writing a plan that is too long or too short.
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• Making unrealistic assumptions.
• Not including a financial plan.
• Not proofreading and editing carefully.

There are many resources available to help you write an exceptional business plan. But one best business plan writer is wisebusinessplans.

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

Published: February 06, 2024

I believe that reading sample business plans is essential when writing your own.

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As you explore business plan examples from real companies and brands, it’s easier for you to learn how to write a good one.

But what does a good business plan look like? And how do you write one that’s both viable and convincing. I’ll walk you through the ideal business plan format along with some examples to help you get started.

Table of Contents

Business Plan Format

Business plan types, sample business plan templates, top business plan examples.

Ask any successful sports coach how they win so many games, and they’ll tell you they have a unique plan for every single game. To me, the same logic applies to business.

If you want to build a thriving company that can pull ahead of the competition, you need to prepare for battle before breaking into a market.

Business plans guide you along the rocky journey of growing a company. And if your business plan is compelling enough, it can also convince investors to give you funding.

With so much at stake, I’m sure you’re wondering where to begin.

Free Business Plan Template

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

• Outline your idea.
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You're all set!

Click this link to access this resource at any time.

Fill out the form to get your free template.

First, you’ll want to nail down your formatting. Most business plans include the following sections.

1. Executive Summary

I’d say the executive summary is the most important section of the entire business plan. 

Why? Essentially, it's the overview or introduction, written in a way to grab readers' attention and guide them through the rest of the business plan. This is important, because a business plan can be dozens or hundreds of pages long.

There are two main elements I’d recommend including in your executive summary:

Company Description

This is the perfect space to highlight your company’s mission statement and goals, a brief overview of your history and leadership, and your top accomplishments as a business.

Tell potential investors who you are and why what you do matters. Naturally, they’re going to want to know who they’re getting into business with up front, and this is a great opportunity to showcase your impact.

Need some extra help firming up those business goals? Check out HubSpot Academy’s free course to help you set goals that matter — I’d highly recommend it

Products and Services

To piggyback off of the company description, be sure to incorporate an overview of your offerings. This doesn’t have to be extensive — just another chance to introduce your industry and overall purpose as a business.

In addition to the items above, I recommend including some information about your financial projections and competitive advantage here too.:

Keep in mind you'll cover many of these topics in more detail later on in the business plan. So, keep the executive summary clear and brief, and only include the most important takeaways.

Executive Summary Business Plan Examples

This example was created with HubSpot’s business plan template:

This executive summary is so good to me because it tells potential investors a short story while still covering all of the most important details.

Image Source

Tips for Writing Your Executive Summary

• Start with a strong introduction of your company, showcase your mission and impact, and outline the products and services you provide.
• Clearly define a problem, and explain how your product solves that problem, and show why the market needs your business.
• Be sure to highlight your value proposition, market opportunity, and growth potential.
• Keep it concise and support ideas with data.
• Customize your summary to your audience. For example, emphasize finances and return on investment for venture capitalists.

Check out our tips for writing an effective executive summary for more guidance.

2. Market Opportunity

This is where you'll detail the opportunity in the market.

The main question I’d ask myself here is this: Where is the gap in the current industry, and how will my product fill that gap?

More specifically, here’s what I’d include in this section:

• The size of the market
• Current or potential market share
• Trends in the industry and consumer behavior
• Where the gap is
• What caused the gap
• How you intend to fill it

To get a thorough understanding of the market opportunity, you'll want to conduct a TAM, SAM, and SOM analysis and perform market research on your industry.

You may also benefit from creating a SWOT analysis to get some of the insights for this section.

Market Opportunity Business Plan Example

I like this example because it uses critical data to underline the size of the potential market and what part of that market this service hopes to capture.

Tips for Writing Your Market Opportunity Section

• Focus on demand and potential for growth.
• Use market research, surveys, and industry trend data to support your market forecast and projections.
• Add a review of regulation shifts, tech advances, and consumer behavior changes.
• Refer to reliable sources.
• Showcase how your business can make the most of this opportunity.

3. Competitive Landscape

Since we’re already speaking of market share, you'll also need to create a section that shares details on who the top competitors are.

After all, your customers likely have more than one brand to choose from, and you'll want to understand exactly why they might choose one over another.

My favorite part of performing a competitive analysis is that it can help you uncover:

• Industry trends that other brands may not be utilizing
• Strengths in your competition that may be obstacles to handle
• Weaknesses in your competition that may help you develop selling points
• The unique proposition you bring to the market that may resonate with customers

Competitive Landscape Business Plan Example

I like how the competitive landscape section of this business plan below shows a clear outline of who the top competitors are.

It also highlights specific industry knowledge and the importance of location, which shows useful experience in this specific industry. 

This can help build trust in your ability to execute your business plan.

Tips for Writing Your Competitive Landscape

• Complete in-depth research, then emphasize your most important findings.
• Compare your unique selling proposition (USP) to your direct and indirect competitors.
• Show a clear and realistic plan for product and brand differentiation.
• Look for specific advantages and barriers in the competitive landscape. Then, highlight how that information could impact your business.
• Outline growth opportunities from a competitive perspective.
• Add customer feedback and insights to support your competitive analysis.

4. Target Audience

Use this section to describe who your customer segments are in detail. What is the demographic and psychographic information of your audience?

If your immediate answer is "everyone," you'll need to dig deeper. Here are some questions I’d ask myself here:

• What demographics will most likely need/buy your product or service?
• What are the psychographics of this audience? (Desires, triggering events, etc.)
• Why are your offerings valuable to them?

I’d also recommend building a buyer persona to get in the mindset of your ideal customers and be clear on why you're targeting them.

Target Audience Business Plan Example

I like the example below because it uses in-depth research to draw conclusions about audience priorities. It also analyzes how to create the right content for this audience.

Tips for Writing Your Target Audience Section

• Include details on the size and growth potential of your target audience.
• Figure out and refine the pain points for your target audience , then show why your product is a useful solution.
• Describe your targeted customer acquisition strategy in detail.
• Share anticipated challenges your business may face in acquiring customers and how you plan to address them.
• Add case studies, testimonials, and other data to support your target audience ideas.
• Remember to consider niche audiences and segments of your target audience in your business plan.

5. Marketing Strategy

Here, you'll discuss how you'll acquire new customers with your marketing strategy. I’d suggest including information:

• Your brand positioning vision and how you'll cultivate it
• The goal targets you aim to achieve
• The metrics you'll use to measure success
• The channels and distribution tactics you'll use

I think it’s helpful to have a marketing plan built out in advance to make this part of your business plan easier.

Marketing Strategy Business Plan Example

This business plan example includes the marketing strategy for the town of Gawler.

In my opinion, it really works because it offers a comprehensive picture of how they plan to use digital marketing to promote the community.

Tips for Writing Your Marketing Strategy

• Include a section about how you believe your brand vision will appeal to customers.
• Add the budget and resources you'll need to put your plan in place.
• Outline strategies for specific marketing segments.
• Connect strategies to earlier sections like target audience and competitive analysis.
• Review how your marketing strategy will scale with the growth of your business.
• Cover a range of channels and tactics to highlight your ability to adapt your plan in the face of change.

6. Key Features and Benefits

At some point in your business plan, you'll need to review the key features and benefits of your products and/or services.

Laying these out can give readers an idea of how you're positioning yourself in the market and the messaging you're likely to use. It can even help them gain better insight into your business model.

Key Features and Benefits Business Plan Example

In my opinion, the example below does a great job outlining products and services for this business, along with why these qualities will attract the audience.

Tips for Writing Your Key Features and Benefits

• Emphasize why and how your product or service offers value to customers.
• Use metrics and testimonials to support the ideas in this section.
• Talk about how your products and services have the potential to scale.
• Think about including a product roadmap.
• Focus on customer needs, and how the features and benefits you are sharing meet those needs.
• Offer proof of concept for your ideas, like case studies or pilot program feedback.
• Proofread this section carefully, and remove any jargon or complex language.

7. Pricing and Revenue

This is where you'll discuss your cost structure and various revenue streams. Your pricing strategy must be solid enough to turn a profit while staying competitive in the industry. 

For this reason, here’s what I’d might outline in this section:

• The specific pricing breakdowns per product or service
• Why your pricing is higher or lower than your competition's
• (If higher) Why customers would be willing to pay more
• (If lower) How you're able to offer your products or services at a lower cost
• When you expect to break even, what margins do you expect, etc?

Pricing and Revenue Business Plan Example

I like how this business plan example begins with an overview of the business revenue model, then shows proposed pricing for key products.

Tips for Writing Your Pricing and Revenue Section

• Get specific about your pricing strategy. Specifically, how you connect that strategy to customer needs and product value.
• If you are asking a premium price, share unique features or innovations that justify that price point.
• Show how you plan to communicate pricing to customers.
• Create an overview of every revenue stream for your business and how each stream adds to your business model as a whole.
• Share plans to develop new revenue streams in the future.
• Show how and whether pricing will vary by customer segment and how pricing aligns with marketing strategies.
• Restate your value proposition and explain how it aligns with your revenue model.

8. Financials

To me, this section is particularly informative for investors and leadership teams to figure out funding strategies, investment opportunities, and more.

 According to Forbes , you'll want to include three main things:

• Profit/Loss Statement - This answers the question of whether your business is currently profitable.
• Cash Flow Statement - This details exactly how much cash is incoming and outgoing to give insight into how much cash a business has on hand.
• Balance Sheet - This outlines assets, liabilities, and equity, which gives insight into how much a business is worth.

While some business plans might include more or less information, these are the key details I’d include in this section.

Financials Business Plan Example

This balance sheet is a great example of level of detail you’ll need to include in the financials section of your business plan.

Tips for Writing Your Financials Section

• Growth potential is important in this section too. Using your data, create a forecast of financial performance in the next three to five years.
• Include any data that supports your projections to assure investors of the credibility of your proposal.
• Add a break-even analysis to show that your business plan is financially practical. This information can also help you pivot quickly as your business grows.
• Consider adding a section that reviews potential risks and how sensitive your plan is to changes in the market.
• Triple-check all financial information in your plan for accuracy.
• Show how any proposed funding needs align with your plans for growth.

As you create your business plan, keep in mind that each of these sections will be formatted differently. Some may be in paragraph format, while others could be charts or graphs.

The formats above apply to most types of business plans. That said, the format and structure of your plan will vary by your goals for that plan. 

So, I’ve added a quick review of different business plan types. For a more detailed overview, check out this post .

1. Startups

Startup business plans are for proposing new business ideas.

If you’re planning to start a small business, preparing a business plan is crucial. The plan should include all the major factors of your business.

You can check out this guide for more detailed business plan inspiration .

2. Feasibility Studies

Feasibility business plans focus on that business's product or service. Feasibility plans are sometimes added to startup business plans. They can also be a new business plan for an already thriving organization.

3. Internal Use

You can use internal business plans to share goals, strategies, or performance updates with stakeholders. In my opinion, internal business plans are useful for alignment and building support for ambitious goals.

4. Strategic Initiatives

Another business plan that's often for sharing internally is a strategic business plan. This plan covers long-term business objectives that might not have been included in the startup business plan.

5. Business Acquisition or Repositioning

When a business is moving forward with an acquisition or repositioning, it may need extra structure and support. These types of business plans expand on a company's acquisition or repositioning strategy.

Growth sometimes just happens as a business continues operations. But more often, a business needs to create a structure with specific targets to meet set goals for expansion. This business plan type can help a business focus on short-term growth goals and align resources with those goals.

Now that you know what's included and how to format a business plan, let's review some of my favorite templates.

1. HubSpot's One-Page Business Plan

Download a free, editable one-page business plan template..

The business plan linked above was created here at HubSpot and is perfect for businesses of any size — no matter how many strategies we still have to develop.

Fields such as Company Description, Required Funding, and Implementation Timeline give this one-page business plan a framework for how to build your brand and what tasks to keep track of as you grow.

Then, as the business matures, you can expand on your original business plan with a new iteration of the above document.

Why I Like It

This one-page business plan is a fantastic choice for the new business owner who doesn’t have the time or resources to draft a full-blown business plan. It includes all the essential sections in an accessible, bullet-point-friendly format. That way, you can get the broad strokes down before honing in on the details.

2. HubSpot's Downloadable Business Plan Template

We also created a business plan template for entrepreneurs.

The template is designed as a guide and checklist for starting your own business. You’ll learn what to include in each section of your business plan and how to do it.

There’s also a list for you to check off when you finish each section of your business plan.

Strong game plans help coaches win games and help businesses rocket to the top of their industries. So if you dedicate the time and effort required to write a workable and convincing business plan, you’ll boost your chances of success and even dominance in your market.

This business plan kit is essential for the budding entrepreneur who needs a more extensive document to share with investors and other stakeholders.

It not only includes sections for your executive summary, product line, market analysis, marketing plan, and sales plan, but it also offers hands-on guidance for filling out those sections.

3. LiveFlow’s Financial Planning Template with built-in automation

This free template from LiveFlow aims to make it easy for businesses to create a financial plan and track their progress on a monthly basis.

The P&L Budget versus Actual format allows users to track their revenue, cost of sales, operating expenses, operating profit margin, net profit, and more.

The summary dashboard aggregates all of the data put into the financial plan sheet and will automatically update when changes are made.

Instead of wasting hours manually importing your data to your spreadsheet, LiveFlow can also help you to automatically connect your accounting and banking data directly to your spreadsheet, so your numbers are always up-to-date.

With the dashboard, you can view your runway, cash balance, burn rate, gross margins, and other metrics. Having a simple way to track everything in one place will make it easier to complete the financials section of your business plan.

This is a fantastic template to track performance and alignment internally and to create a dependable process for documenting financial information across the business. It’s highly versatile and beginner-friendly.

It’s especially useful if you don’t have an accountant on the team. (I always recommend you do, but for new businesses, having one might not be possible.)

4. ThoughtCo’s Sample Business Plan

One of the more financially oriented sample business plans in this list, BPlan’s free business plan template dedicates many of its pages to your business’s financial plan and financial statements.

After filling this business plan out, your company will truly understand its financial health and the steps you need to take to maintain or improve it.

I absolutely love this business plan template because of its ease-of-use and hands-on instructions (in addition to its finance-centric components). If you feel overwhelmed by the thought of writing an entire business plan, consider using this template to help you with the process.

6. Harvard Business Review’s "How to Write a Winning Business Plan"

Most sample business plans teach you what to include in your business plan, but this Harvard Business Review article will take your business plan to the next level — it teaches you the why and how behind writing a business plan.

With the guidance of Stanley Rich and Richard Gumpert, co-authors of " Business Plans That Win: Lessons From the MIT Enterprise Forum ", you'll learn how to write a convincing business plan that emphasizes the market demand for your product or service.

You’ll also learn the financial benefits investors can reap from putting money into your venture rather than trying to sell them on how great your product or service is.

This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it’s one of my favorites to supplement any template you choose to use. Harvard Business Review’s guide is instrumental for both new and seasoned business owners.

7. HubSpot’s Complete Guide to Starting a Business

If you’re an entrepreneur, you know writing a business plan is one of the most challenging first steps to starting a business.

Fortunately, with HubSpot's comprehensive guide to starting a business, you'll learn how to map out all the details by understanding what to include in your business plan and why it’s important to include them. The guide also fleshes out an entire sample business plan for you.

If you need further guidance on starting a business, HubSpot's guide can teach you how to make your business legal, choose and register your business name, and fund your business. It will also give small business tax information and includes marketing, sales, and service tips.

This comprehensive guide will walk you through the process of starting a business, in addition to writing your business plan, with a high level of exactitude and detail. So if you’re in the midst of starting your business, this is an excellent guide for you.

It also offers other resources you might need, such as market analysis templates.

8. Panda Doc’s Free Business Plan Template

PandaDoc’s free business plan template is one of the more detailed and fleshed-out sample business plans on this list. It describes what you should include in each section, so you don't have to come up with everything from scratch.

Once you fill it out, you’ll fully understand your business’ nitty-gritty details and how all of its moving parts should work together to contribute to its success.

This template has two things I love: comprehensiveness and in-depth instructions. Plus, it’s synced with PandaDoc’s e-signature software so that you and other stakeholders can sign it with ease. For that reason, I especially love it for those starting a business with a partner or with a board of directors.

9. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers several free business plan templates that can be used to inspire your own plan.

Before you get started, you can decide what type of business plan you need — a traditional or lean start-up plan.

Then, you can review the format for both of those plans and view examples of what they might look like.

We love both of the SBA’s templates because of their versatility. You can choose between two options and use the existing content in the templates to flesh out your own plan. Plus, if needed, you can get a free business counselor to help you along the way.

I’ve compiled some completed business plan samples to help you get an idea of how to customize a plan for your business.

I chose different types of business plan ideas to expand your imagination. Some are extensive, while others are fairly simple.

Let’s take a look.

1. LiveFlow

One of the major business expenses is marketing. How you handle your marketing reflects your company’s revenue.

I included this business plan to show you how you can ensure your marketing team is aligned with your overall business plan to get results. The plan also shows you how to track even the smallest metrics of your campaigns, like ROI and payback periods instead of just focusing on big metrics like gross and revenue.

Fintech startup, LiveFlow, allows users to sync real-time data from its accounting services, payment platforms, and banks into custom reports. This eliminates the task of pulling reports together manually, saving teams time and helping automate workflows.

"Using this framework over a traditional marketing plan will help you set a profitable marketing strategy taking things like CAC, LTV, Payback period, and P&L into consideration," explains LiveFlow co-founder, Lasse Kalkar .

When it came to including marketing strategy in its business plan, LiveFlow created a separate marketing profit and loss statement (P&L) to track how well the company was doing with its marketing initiatives.

This is a great approach, allowing businesses to focus on where their marketing dollars are making the most impact. Having this information handy will enable you to build out your business plan’s marketing section with confidence. LiveFlow has shared the template here . You can test it for yourself.

2. Lula Body

Sometimes all you need is a solid mission statement and core values to guide you on how to go about everything. You do this by creating a business plan revolving around how to fulfill your statement best.

For example, Patagonia is an eco-friendly company, so their plan discusses how to make the best environmentally friendly products without causing harm.

A good mission statement  should not only resonate with consumers but should also serve as a core value compass for employees as well.

Patagonia has one of the most compelling mission statements I’ve seen:

"Together, let’s prioritise purpose over profit and protect this wondrous planet, our only home."

It reels you in from the start, and the environmentally friendly theme continues throughout the rest of the statement.

This mission goes on to explain that they are out to "Build the best product, cause no unnecessary harm, and use business to protect nature."

Their mission statement is compelling and detailed, with each section outlining how they will accomplish their goal.

4. Vesta Home Automation

This executive summary for a smart home device startup is part of a business plan created by students at Mount Royal University .

While it lacks some of the sleek visuals of the templates above, its executive summary does a great job of demonstrating how invested they are in the business.

Right away, they mention they’ve invested $200,000 into the company already, which shows investors they have skin in the game and aren’t just looking for someone else to foot the bill.

This is the kind of business plan you need when applying for business funds. It clearly illustrates the expected future of the company and how the business has been coming along over the years.

5. NALB Creative Center

This fictional business plan for an art supply store includes everything one might need in a business plan: an executive summary, a company summary, a list of services, a market analysis summary, and more.

One of its most notable sections is its market analysis summary, which includes an overview of the population growth in the business’ target geographical area, as well as a breakdown of the types of potential customers they expect to welcome at the store. 

This sort of granular insight is essential for understanding and communicating your business’s growth potential. Plus, it lays a strong foundation for creating relevant and useful buyer personas .

It’s essential to keep this information up-to-date as your market and target buyer changes. For that reason, you should carry out market research as often as possible to ensure that you’re targeting the correct audience and sharing accurate information with your investors.

Due to its comprehensiveness, it’s an excellent example to follow if you’re opening a brick-and-mortar store and need to get external funding to start your business .

6. Curriculum Companion Suites (CSS)

If you’re looking for a SaaS business plan example, look no further than this business plan for a fictional educational software company called Curriculum Companion Suites. 

Like the business plan for the NALB Creative Center, it includes plenty of information for prospective investors and other key stakeholders in the business.

One of the most notable features of this business plan is the executive summary, which includes an overview of the product, market, and mission.

The first two are essential for software companies because the product offering is so often at the forefront of the company’s strategy. Without that information being immediately available to investors and executives, then you risk writing an unfocused business plan.

It’s essential to front-load your company’s mission if it explains your "Why?" and this example does just that. In other words, why do you do what you do, and why should stakeholders care? This is an important section to include if you feel that your mission will drive interest in the business and its offerings.

7. Culina Sample Business Plan

Culina's sample business plan is an excellent example of how to lay out your business plan so that it flows naturally, engages readers, and provides the critical information investors and stakeholders need. 

You can use this template as a guide while you're gathering important information for your own business plan. You'll have a better understanding of the data and research you need to do since Culina’s plan outlines these details so flawlessly for inspiration.

8. Plum Sample Business Plan

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