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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

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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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The 7 Best Business Plan Examples (2024)

As an aspiring entrepreneur gearing up to start your own business , you likely know the importance of drafting a business plan. However, you might not be entirely sure where to begin or what specific details to include. That’s where examining business plan examples can be beneficial. Sample business plans serve as real-world templates to help you craft your own plan with confidence. They also provide insight into the key sections that make up a business plan, as well as demonstrate how to structure and present your ideas effectively.

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Example business plan

To understand how to write a business plan, let’s study an example structured using a seven-part template. Here’s a quick overview of those parts:

• Executive summary: A quick overview of your business and the contents of your business plan.
• Company description: More info about your company, its goals and mission, and why you started it in the first place.
• Market analysis: Research about the market and industry your business will operate in, including a competitive analysis about the companies you’ll be up against.
• Products and services: A detailed description of what you’ll be selling to your customers.
• Marketing plan: A strategic outline of how you plan to market and promote your business before, during, and after your company launches into the market.
• Logistics and operations plan: An explanation of the systems, processes, and tools that are needed to run your business in the background.
• Financial plan: A map of your short-term (and even long-term) financial goals and the costs to run the business. If you’re looking for funding, this is the place to discuss your request and needs.

7 business plan examples (section by section)

In this section, you’ll find hypothetical and real-world examples of each aspect of a business plan to show you how the whole thing comes together. 

• Executive summary

Your executive summary offers a high-level overview of the rest of your business plan. You’ll want to include a brief description of your company, market research, competitor analysis, and financial information. 

In this free business plan template, the executive summary is three paragraphs and occupies nearly half the page:

• Company description

You might go more in-depth with your company description and include the following sections:

• Nature of the business. Mention the general category of business you fall under. Are you a manufacturer, wholesaler, or retailer of your products?
• Background information. Talk about your past experiences and skills, and how you’ve combined them to fill in the market. 
• Business structure. This section outlines how you registered your company —as a corporation, sole proprietorship, LLC, or other business type.
• Industry. Which business sector do you operate in? The answer might be technology, merchandising, or another industry.
• Team. Whether you’re the sole full-time employee of your business or you have contractors to support your daily workflow, this is your chance to put them under the spotlight.

You can also repurpose your company description elsewhere, like on your About page, Instagram page, or other properties that ask for a boilerplate description of your business. Hair extensions brand Luxy Hair has a blurb on it’s About page that could easily be repurposed as a company description for its business plan. 

• Market analysis

Market analysis comprises research on product supply and demand, your target market, the competitive landscape, and industry trends. You might do a SWOT analysis to learn where you stand and identify market gaps that you could exploit to establish your footing. Here’s an example of a SWOT analysis for a hypothetical ecommerce business: 

You’ll also want to run a competitive analysis as part of the market analysis component of your business plan. This will show you who you’re up against and give you ideas on how to gain an edge over the competition. 

• Products and services

This part of your business plan describes your product or service, how it will be priced, and the ways it will compete against similar offerings in the market. Don’t go into too much detail here—a few lines are enough to introduce your item to the reader.

• Marketing plan

Potential investors will want to know how you’ll get the word out about your business. So it’s essential to build a marketing plan that highlights the promotion and customer acquisition strategies you’re planning to adopt. 

Most marketing plans focus on the four Ps: product, price, place, and promotion. However, it’s easier when you break it down by the different marketing channels . Mention how you intend to promote your business using blogs, email, social media, and word-of-mouth marketing. 

Here’s an example of a hypothetical marketing plan for a real estate website:

Logistics and operations

This section of your business plan provides information about your production, facilities, equipment, shipping and fulfillment, and inventory.

Financial plan

The financial plan (a.k.a. financial statement) offers a breakdown of your sales, revenue, expenses, profit, and other financial metrics. You’ll want to include all the numbers and concrete data to project your current and projected financial state.

In this business plan example, the financial statement for ecommerce brand Nature’s Candy includes forecasted revenue, expenses, and net profit in graphs.

It then goes deeper into the financials, citing:

• Funding needs
• Project cash-flow statement
• Project profit-and-loss statement
• Projected balance sheet

You can use Shopify’s financial plan template to create your own income statement, cash-flow statement, and balance sheet. 

Types of business plans (and what to write for each)

A one-page business plan is a pared down version of a standard business plan that’s easy for potential investors and partners to understand. You’ll want to include all of these sections, but make sure they’re abbreviated and summarized:

• Logistics and operations plan
• Financials 

A startup business plan is meant to secure outside funding for a new business. Typically, there’s a big focus on the financials, as well as other sections that help determine the viability of your business idea—market analysis, for example. Shopify has a great business plan template for startups that include all the below points:

• Market research: in depth
• Financials: in depth

Internal 

Your internal business plan acts as the enforcer of your company’s vision. It reminds your team of the long-term objective and keeps them strategically aligned toward the same goal. Be sure to include:

• Market research

Feasibility 

A feasibility business plan is essentially a feasibility study that helps you evaluate whether your product or idea is worthy of a full business plan. Include the following sections:

A strategic (or growth) business plan lays out your long-term vision and goals. This means your predictions stretch further into the future, and you aim for greater growth and revenue. While crafting this document, you use all the parts of a usual business plan but add more to each one:

• Products and services: for launch and expansion
• Market analysis: detailed analysis
• Marketing plan: detailed strategy
• Logistics and operations plan: detailed plan
• Financials: detailed projections

Free business plan templates

Now that you’re familiar with what’s included and how to format a business plan, let’s go over a few templates you can fill out or draw inspiration from.

Bplans’ free business plan template

Bplans’ free business plan template focuses a lot on the financial side of running a business. It has many pages just for your financial plan and statements. Once you fill it out, you’ll see exactly where your business stands financially and what you need to do to keep it on track or make it better.

PandaDoc’s free business plan template

PandaDoc’s free business plan template is detailed and guides you through every section, so you don’t have to figure everything out on your own. Filling it out, you’ll grasp the ins and outs of your business and how each part fits together. It’s also handy because it connects to PandaDoc’s e-signature for easy signing, ideal for businesses with partners or a board.

Miro’s Business Model Canvas Template

Miro’s Business Model Canvas Template helps you map out the essentials of your business, like partnerships, core activities, and what makes you different. It’s a collaborative tool for you and your team to learn how everything in your business is linked.

Better business planning equals better business outcomes

Building a business plan is key to establishing a clear direction and strategy for your venture. With a solid plan in hand, you’ll know what steps to take for achieving each of your business goals. Kickstart your business planning and set yourself up for success with a defined roadmap—utilizing the sample business plans above to inform your approach.

Business plan FAQ

What are the 3 main points of a business plan.

• Concept. Explain what your business does and the main idea behind it. This is where you tell people what you plan to achieve with your business.
• Contents. Explain what you’re selling or offering. Point out who you’re selling to and who else is selling something similar. This part concerns your products or services, who will buy them, and who you’re up against.
• Cash flow. Explain how money will move in and out of your business. Discuss the money you need to start and keep the business going, the costs of running your business, and how much money you expect to make.

How do I write a simple business plan?

To create a simple business plan, start with an executive summary that details your business vision and objectives. Follow this with a concise description of your company’s structure, your market analysis, and information about your products or services. Conclude your plan with financial projections that outline your expected revenue, expenses, and profitability.

What is the best format to write a business plan?

The optimal format for a business plan arranges your plan in a clear and structured way, helping potential investors get a quick grasp of what your business is about and what you aim to achieve. Always start with a summary of your plan and finish with the financial details or any extra information at the end.

Want to learn more?

• Question: Are You a Business Owner or an Entrepreneur?
• Bootstrapping a Business: 10 Tips to Help You Succeed
• Entrepreneurial Mindset: 20 Ways to Think Like an Entrepreneur
• 101+ Best Small Business Software Programs 

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

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How to Write a Business Plan (Plus Examples & Templates)

May 24, 2021

Have you ever wondered how to write a business plan step by step? Mike Andes, told us: 

This guide will help you write a business plan to impress investors.

Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses.  He knows a thing or two about writing  business plans!

We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!

What Is a Business Plan?

A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including: 

• Finding customers
• Plans for developing a team
•  Competition
• Legal structures
• Key milestones you are pursuing

If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .

Get a Business Idea

Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills. 

Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:

• What am I good at?
• What would I enjoy doing?
• What can I get paid for?”

If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it. 

As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”

If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video

Conduct Market Analysis

Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.

Product and Service Demand

A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using presearch.org because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.

With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services. 

If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.

You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.

 I ran a quick test of how many people between 18-65  you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.

Identify Demographics of Target Market

Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:

• Other Interests
• Marital Status
• Do they have kids?

Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,  

“It helps you quickly evaluate what the best areas are for your business to be located.”

How to Write a Business Plan

Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan. 

Each of the following should be a section of your business plan:

• Business Plan Cover Page
• Table of Contents
• Executive Summary
• Company Description
• Description of Products and Services

SWOT Analysis

• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 

Pricing Strategy

• Distribution Channel Assessment
• Operational Plan
• Management and Organizational Strategy
• Financial Statements and/or Financial Projections

We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go. 

How to Write a Business Plan Step 1. Create a Cover Page

The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.

A good business plan should have the following elements on a cover page:

• Professionally designed logo
• Company name
• Mission or Vision Statement
• Contact Info

Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.

How to Write a Business Plan Step 2. Create a Table of Contents

Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.

A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.

Check out Canva’s article about creating a  table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.

How to Write a Business Plan Step 3. Write an Executive Summary

An executive summary is where your business plan should catch the readers interest.  It doesn’t need to be long, but should be quick and easy to read.

Mike told us,

How long should an executive summary bein an informal business plan?

For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches .  This can also be used for the content of emails to get readers’ attention.

It consists of three basic parts:

• An introduction to you and your business.
• What your business is about.
• A call to action

Example of an informal executive summary 

One of the best elevator pitches I’ve used is:

So far that pitch has achieved a 100% success rate in getting partnerships for the business.

What should I include in an executive summary for investors?

Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:

• Introduction of yourself and company.
• An origin story (Recognition of a problem and how you came to solution)
• An introduction to your products or services.
• Your unique value proposition. Make sure to include intellectual property.
• Where you are in the business life cycle
• Request and why you need it.

Successful business plan examples

The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.

What mistakes do people make when writing an executive summary?

Business owners commonly go into too much detail about the following items in an executive summary:

• Marketing and sales processes
• Financial statements
• Organizational structure
• Market analysis

These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.

How to Write a Business Plan Step 4. Company Description

Every business plan should include a company description. A great business plan will include the following elements while describing the company:

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

Let’s take a look at what each section includes in a good business plan.

Mission Statement

A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements. 

Company Philosophy and Vision

The company philosophy is what drives your company. You’ll normally hear them called core values.  These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.

What makes your company different?

Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity. 

Examples of core values

One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:

•  Prioritize communication.
•  Never stop learning.
•  Be transparent.
•  Start small and grow incrementally.

These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .

What is a vision statement?

A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.

Example vision statements

The Alzheimer’s Association is a great example of a vision statement:

A world without Alzheimer’s Disease and other dementia.

It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.

Business Goals

You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.

Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.

How far in advance should a business plan?

Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team  understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.

Example of great business goals

My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.

If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).

You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources. 

Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.

A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:

• What is the industry outlook long-term and short-term?
• How will your business take advantage of projected industry changes and trends?
• What might happen to your competitors and how will your business successfully compete?

Industry resources

Some helpful resources to help you establish more about your industry are:

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

There are five basic types of legal structures that most people will utilize:

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.

You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.

Sole Proprietorship

A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.

To start a sole proprietorship, fill out a special tax form called a  Schedule C . Sole proprietors can also join the American Independent Business Alliance .

Limited Liability Company (LLC)

An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.

Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.

Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .

There are several opportunities to purchase successful franchises. TopFranchise.com has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.

How to Write a Business Plan Step 5. Products and Services

This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:

• Unique features that differentiate your business products from competitors
• Intellectual property
• Your supply chain
• Cost and pricing structure 

Questions to answer about your products and services

Mike gave us a list  of the most important questions to answer about your product and services:

• How will you be selling the product? (in person, ecommerce, wholesale, direct to consumer)?
• How do you let them know they need a product?
• How do you communicate the message?
• How will you do transactions?
• How much will you be selling it for?
• How many do you think you’ll sell and why?

Make sure to use the worksheet on our business plan template .

How to Write a Business Plan Step 6. Sales and Marketing Plan

The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer.  It should contain the following sections:

SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.

Business owners need to do a thorough job documenting how their service or product stacks up against the competition.

If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .

SWOT Examples

Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.

Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:

• Adding offerings that fit with your current small business
• Increase sales to current customers
• Reducing costs through bulk ordering
• Finding ways to reduce inventory
•  And other areas you can improve

Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.

The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing. 

Include Competitor Data in Your Business Plan

When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.

For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .

What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.

Marketing Strategy

The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.

If you haven’t already included it, Mike recommends:

“They’ll want to know about Demographics, ages, and wealth of your target market.”

Make sure to include the Total addressable market .  The term refers to the value if you captured 100% of the market.

Advertising Strategy

You’ll explain what formats of advertising you’ll be using. Some possibilities are:

• Online: Facebook and Google are the big names to work with here.
• Print : Print can be used to reach broad groups or targeted markets. Check out this for tips .
• Radio : iHeartMedia is one of the best ways to advertise on the radio
• Cable television : High priced, hard to measure ROI, but here’s an explanation of the process
• Billboards: Attracting customers with billboards can be beneficial in high traffic areas.

You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.

Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”

Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .

This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.

Some common pricing strategies are:

• Value-based pricing – Commonly used with home buying and selling or other products that are status symbols.
• Skimming pricing – Commonly seen in video game consoles, price starts off high to recoup expenses quickly, then reduces over time.
• Competition-based pricing – Pricing based on competitors’ pricing is commonly seen at gas stations.
• Freemium services –  Commonly used for software, where there is a free plan, then purchase options for more functionality.

HubSpot has a great calculator and blog on pricing strategies.

Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.

Distribution Plan

This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.

Supply Chain Examples

For instance, lawn care companies  would need to cover aspects such as:

• Suppliers for lawn care equipment and tools
• Any chemicals or treatments needed
• Repair parts for sprinkler systems
• Vehicles to transport equipment and employees
• Insurance to protect the company vehicles and people.

Examples of Supply Chains

These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:

• Raw materials
• Shipping of raw materials
• Converting of raw materials to thread
• Shipping thread to produce garments
• Garment producer
• Shipping to company
• Company storage
• Shipping to retail stores

There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.

The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.

According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.

How to Write a Business Plan Step 7. Company Organization and Operational Plan

This part of the business plan is focused on how the business model will function while serving customers.  The business plan should provide an overview of  how the team will manage the following aspects:

Quality Control

• Legal environment

Let’s look at each for some insight.

Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.

If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.

Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.

Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.

There are a variety of organizations that help define quality control including:

• International Organization for Standardization – Quality standards for energy, technology, food, production environments, and cybersecurity
• AICPA – Standard defined for accounting.
• The Joint Commission – Healthcare
• ASHRAE – HVAC best practices

You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.

For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.

• The size of your location
• The type of building (retail, industrial, commercial, etc.)
• Zoning restrictions – Urban Wire has a good map on how zoning works in each state
• Accessibility – Does it meet ADA requirements?
• Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
• Utilities – b.e.f. has a good energy calculator .

Legal Environment

The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:

• Any licenses and/or permits that are needed and whether you’ve obtained them
• Any trademarks, copyrights, or patents that you have or are in the process of applying for
• The insurance coverage your business requires and how much it costs
• Any environmental, health, or workplace regulations affecting your business
• Any special regulations affecting your industry
• Bonding requirements, if applicable

Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.

Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:

• What is the current leadership structure and what will it look like in the future?
• What types of employees will you have? Are there any licensing or educational requirements?
• How many employees will you need?
• Will you ever hire freelancers or independent contractors?
• What is each position’s job description?
• What is the pay structure (hourly, salaried, base plus commission, etc.)?
• How do you plan to find qualified employees and contractors?

One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:

Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.

How to Write a Business Plan Step 8. Financial Statements 

No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.

Provide All Financial Income from an Existing Business

An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.

You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.

If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:

• Higher Revenue if expanding business
• Lower Cost of Goods Sold if purchasing inventory with bulk discounts
• Adding interest if utilizing financing (not equity deal)
• Changes in expenses
• Addition of financing information to the cash flow statement
• Changes in Earnings per Share on the balance sheet

Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.

Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.

Financial Projections For A Startup Business Plan

Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.

Let’s use custom t-shirts as an example.

Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.

With that data,  you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.

Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.

Here’s a table for easier viewing of that information.

The point here is to make sure your business proposal examples make sense.

You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.

Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.

How to Write a Business Plan Step 9. Business Plan Example of Funding Requests

What is a business plan without a plan on how to obtain funding?

The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.

In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.

Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.

Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.

Ways to get funding for a small business

There are a variety of ways to cover this. the most common are:

• Bootstrapping – Using your savings without external funding.
• Taking out debt – loans, credit cards
• Equity, Seed Funding – Ownership of a percentage of the company in exchange for current funds
• Crowdsourcing – Promising a good for funding to create the product

Keep reading for more tips on how to write a business plan.

How funding will be used

When asking for business financing make sure to include:

• How much to get started?
• What is the minimum viable product and how soon can you make money?
• How will the money be spent?

Mike emphasized two aspects that should be included in every plan, 

How to Write a Business Plan Resources

Here are some links to a business plan sample and business plan outline. 

• Sample plan

It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:

• Wise Plans –  Shares a lot of information on starting businesses and is a business plan writing company.
• Optimus Business Plans –  Another business plan writing company.
• Venture Capital – A venture capital thread that can help give you ideas.

How to Write a Business Plan: What’s Next?

We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:

• The definition of a business plan
• Coming up with a business idea
• Performing market research
• The critical components of a business plan
• An example business plan

In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.

Don’t forget to check out the rest of our business hub .

Have you written a business plan before? How did it impact your ability to achieve your goals?

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3 Best Business Ideas For Women

3 manufacturing business for ladies ideas, 3 online business ideas for women, 3 best small business ideas from home for ladies, 3 self-employed ideas for females, 12 unique business ideas for ladies.

• FAQs [/su_note]

#1. Real estate

#2. restaurants, #3. human resources, #1. build custom sheds.

#2. Make your own beauty products

#3. start your own shoe or clothing line, #1. start an online store, #2. make and sell online courses, #3. social media management, #1. photography business, #2. in-home childcare business, #3. wedding planning business , #1. freelance writing business, #2. graphic design business.

#3. Data entry

#1. interior design, #2. virtual bookkeeping business.

#3. Resell shoes or vintage clothes

#4. professional organizer, #5. start a farm, #6. dropshipping business, #7. open a bakery business.

#8. Personal trainer

#9. home, office, or airbnb cleaning business, #10. life coach, #11. laundry business, #12. baby equipment rental business, faqs about what is a good business to start for a woman, what is the best business for a woman to start, what percent of women own businesses.

How to start a business as a woman

Where can i find women in business scholarships.

What is the best way to get a business loan for women?

Which business idea will you choose.

How to Buy a Business With No Money (2024)

There are plenty of ways to buy a business with no money. One of the most common strategies is called seller financing—and nearly 80% of business purchases include at least some of it.

We’re going to share some options for buying a business without money, or with very little money, up front. You’ll learn what to look for during a business acquisition and how to negotiate the deal.

[su_note note_color="#dbeafc"]If you’re looking to start buying businesses without money, click on one of the links below—or simply read on—to learn more.

Use seller financing

Get a small business administration (sba) loan, bring on investors or partners, work with business brokers, identify goals before you buy an existing business, find the right business for sale, value the business, negotiate your deal, close the deal and transition into ownership.

• Why start new businesses when you can buy businesses with no money? [/su_note]

How can I buy a business without money?

There are multiple ways to buy an existing business from the current business owners. Using a combination of these strategies can help you buy a business with no money of your own. Some of the most common funding options include:

• Using seller financing
• Getting a Small Business Administration loan
• Bringing on investors or partners

Let’s look into each.

Seller financing, also called owner financing, is one of the most common ways of transferring ownership from a current owner to a new business owner. According to the mergers and acquisitions firm Morgan & Westfield , 80% of all small business purchases use at least some seller financing.

In deals that use seller financing, sellers fund a portion of the small business purchase in exchange for a percentage of the cash flow for a specific period after the new business owner takes over. The buyer often pays the remaining balance with a down payment and periodic installments.

The terms of the deal may look something like below:

• Percent seller finances: 10% to 20% • Your down payment: 30% to 80%, but 50% is fairly standard • Interest rates: 6.6% to 16.5%, comparable to the Small Business Administration's current rates • Note duration: Three to seven years

When you propose seller financing, you’ll likely have to create and sign a promissory note and agree to a Uniform Commercial Code lien . Most sellers may require you to maintain specific financial benchmarks as well.

The SBA offers small business loans to people buying a small business. 7(a) loans are easier to get when buying an existing business because there is a record of profitability that new ventures do not have.

When applying for a 7(a) loan, apply for enough financing to purchase the existing business and cover expenses for ongoing operations.

You can also bring on investors or partners when you want to buy a business without money up front. Investors can be a friends-and-family business loan, venture capitalists, or crowdfunding.

How to buy a business with no money

Buying a business with no money is as simple as following the six-step process below:

• Identify goals before you buy an existing business.
• Work with business brokers.
• Find the right business for sale.
• Value the business.
• Negotiate the deal.
• Close the deal and transition into ownership.

Before you start looking for business acquisitions, you’ll want to think about what you are trying to achieve by buying an established business. You might buy a business to:

• Hedge risk: Investing in an established, income-generating business can limit risk and provide reliable income, as it has already gone through most of the struggles that upstart companies experience.
• Accelerate your retirement: A leveraged buyout allows you to keep your current financial investments and grow your income, which gets you closer to retirement.
• Finance your growth: Using leverage helps small business owners build their businesses quickly.
• Improve liquidity: Taking out a business loan for a business acquisition will help small business owners increase their cash on hand, which makes it easier to cover business expenses.

In addition to the goals listed above, you may be interested in a specific business model, like an online business or making money with passive income plays.

Buying an existing business is a complex task, and you need an experienced broker to help you enter your next business venture correctly. You’ll want a business broker because they:

• Have experience completing deals
• Have tools to help them find and evaluate businesses
• Routinely deal with business acquisition paperwork
• Help you through the process

Next, you’ll establish your business acquisition goals.

Buying a business has never been easier. There are several business listing sites, like:

When buying a business, you want to find businesses that can provide a win-win deal. Look for small businesses that have certain qualities. We’ll discuss the essential qualities of a business for sale next.

Look for an owner who is ready to get out

Buying a business is easier when the seller is looking for potential buyers and wants to sell the business quickly. You’ll have to find out the seller’s motivations for selling the business, which may include:

• Reaching retirement age
• Moving to care for a family member
• Equipment issues
• Lack of automation
• High churn rates
• Lack of marketing
• Revenue problems
• Employee turnover

Ultimately, each of these is a potential opportunity for a new business owner to get a deal on the small business and dramatically improve the cash flow and profitability. Some may also lower the purchase price or make it easier to receive seller financing.

Look for businesses with growth opportunities

Some businesses provide clear opportunities for growth if purchased. Look for qualities such as:

• Outdated technology: Just by implementing new tech, business buyers can dramatically improve operating costs. SBA lenders have loans specifically meant to help a business’s success through improving technology.
• Lack of competition: Business buyers can really benefit when the competition can’t keep up with the improvements you make once it’s your own business.

Look for businesses you’re familiar with

While it’s possible to purchase a business you (or consumers) don’t know much about, searching for the following qualities can help ensure a seamless transition:

• Age: Old, reputable businesses can provide financial security and provide a brand to build upon.
• Known business models: Own businesses you understand. Spending money on a business model you must learn adds risk and time to learn the business.

Next, you’ll want to dig into the financial statements and other business aspects to decide on a fair business price.

You’ll want to visit the business to check it out. There, you’ll be able to see how it operates, determine where it can improve, and make other observations that can’t be made from afar.

If you like what you see so far, it’s time to send a letter of intent to the business owner so you can start the due diligence process.

You’ll want to understand their financial statements, especially areas like cash flow, operating expenses, accounts receivable, and outstanding debt.

You’ll also want to understand the age of the equipment to determine if you’ll need equipment financing. You may also be able to use the equipment as collateral to secure alternative funding options.

You might want to prepare a list of questions before buying businesses . Then, you’ll want to calculate business valuation , which will guide how much money you’re prepared to spend.

Buying a business will require negotiating a price that’s fair to both business owners. You can negotiate both the purchase price and the sale terms, but you need to decide which is more important to you and which is more important to the seller.

When you have multiple financing options lined up or are using your own money up front, you might find it most beneficial to negotiate the price. But when you seek seller financing, you might just give them their asking price in exchange for more favorable financing options.

Offer a higher interest rate

Seller financing can be made more attractive by bumping up the interest rates.

For instance, let’s assume the buyer wants $500K and you want to pay over seven years. That’s not an attractive deal if you offered to pay $75K annually. To get more favorable payment terms, you can raise the interest rate.

Which offer would you take?

• $500K up front
• $100K up front and $478K over 2 annual payments
• $100K up front and $504K over 3 annual payments
• $100K up front and $528K over 4 annual payments
• $100K up front and $550K over 5 annual payments
• $100K up front and $575K over 6 annual payments
• $100K up front and $630K over 7 annual payments

All except for the last one are paying 10% interest. The last option has a higher interest rate, pays the seller an extra $4K per year, but still allows you to keep more cash on hand each year.

Bring on a silent partner

You can always bring in a silent partner if you don’t have the cash up front. Silent partners contribute monetarily and often benefit from the sale, but they don’t take an active role otherwise.

You might also be able to secure venture capital, though venture capitalists tend to want more involvement. Make sure you negotiate for the venture capitalist to be a silent partner because many actively help investments grow.

Find a secondary source of financing

Seller loans don’t normally cover all the financing when buying a business. Loans like SBA financing or traditional bank loans may be secured by using equipment or accounts receivable (meaning the money you are set to make) as collateral.

Learn about in our article about business loans .

Raise the capital through crowdfunding

Crowdfunding uses alternative financing options to get the money you need. With crowdfunding, you can offer donors incentives (like products or equity) in exchange for contributions, or you can offer to pay them back with just like if you were given a loan.

There are tons of options for crowdfunding. Learn more below:

Use your cash flow

A great way to get a loan to buy a business is using your cash flow or accounts receivable to secure a loan. They’ll want to take a specific amount out each week, but it’s another to purchase a business with no money up front.

Learn more about cash flow loans through National Business Credit .

Finance growth

While deciding how to get financing for a business, don’t forget to give yourself some wiggle room for improvements and operational expenses. You might need to write a business plan to show how the money will be spent. Learn more in our guide to writing a business plan .

Take your time to show you have a plan to turn the funds into new revenue and prove you can pay the loan back.

Once you’ve secured professional advice, chosen the business you want to buy, done your due diligence, secured a loan, paid the down payment, and signed the contract, you’ll still have to transfer ownership. This step includes:

• Building an operational transition timeline
• Building relationships with employees
• Transferring all authorization, contracts, bank accounts, and other legalities
• Hiring an operator if you plan to be a passive investor

Why start new businesses when you can buy businesses with no money?

Starting a new business can be a real challenge if you don’t have money. You have to learn a lot as you go and may not be able to afford new freelancers or employees until you start earning revenue.

But buying an existing business without money is something that happens all the time. You’ll start with the business’s existing revenue and systems, then turn your focus to fixing areas that you’ve identified as problematic.

Have you ever bought a business without money? How did it go? We want to know.

The 19 Best Service Business Ideas for 2024

Looking for service business examples to give you the inspiration to start a service business? We’ll provide you with the best small service business ideas to start.

We spent thousands of hours interviewing business owners and analyzing businesses to help identify the best service to sell. You won’t believe which services make the list.

• The Most Profitable Service Business Ideas
• Services That Are In-Demand
• Service-Based Business Ideas Online
• Small Business Service Ideas From Home

What Is the Most Profitable Service Business Idea?

#1. car detailing , car detailing pros:.

• High demand with lots of potential customers
• Low startup and overhead costs
• High profit potential
• Doesn’t require any specialized skills or knowledge

Car Detailing Cons:

• Business can vary depending on the season
• Work schedule is dictated by customer needs

What Services Are In Most Demand?

#2. cleaning services, cleaning service pros:.

• No training or specialized skill sets required
• Low startup costs
• Wide variety of niches that are in high demand
• Can be start and run from home as a solo entrepreneur
• Easy to scale revenue by growing a team

Cleaning Service Cons:

• Work can be unpleasant or labor-intensive 
• Your schedule depends on when customers need you

#3. Automotive Repair Services

Repair services pros:.

• Increasing customer demand
• High revenue potential 
• Variety of niches and types of work you can do
• Ideal for people who like working with their hands

Repair Services Cons:

• Relatively high startup costs compared to other service-based businesses
• Will need training in automotive repair  

#4. Accounting and Tax Services

Accounting and Tax Pros:

• High revenue and profit potential
• Variety of services you can provide in the niche
• Can be run from home by a solo entrepreneur
• Work is usually independent and flexible 

Accounting and Tax Cons:

• Requires training and knowledge in financial management
• Can be difficult to build customer trust as a new firm 

More Ideas For Small Business Owners

#5. consulting business.

Consulting Pros:

• Profit from your unique expertise
• Affordable to start and run
• Can be run from home or online
• High revenue potential and scalability

Consulting Cons:

• Some niches are very competitive
• Can take a while to build a reputation and attract clients 

#6. Construction and House Painting

Construction pros:.

• Low initial and ongoing costs
• High demand and profit potential
• Great new business for people who like physical jobs
• Variety of projects and work you can take on

Construction Cons:

• Work is physically demanding 
• Will need a contractor license for full home construction

#7. Landscaping and Lawn Care

Landscaping pros:.

• Easy and affordable to start
• Consistent demand in warmer months and regions
• Work outside 
• No specialized training or education needed

Landscaping Cons:

• Is a seasonal business in many locations
• Physical and tiring work

Online Service Business Ideas

#8. graphic design business.

Graphic Design Pros:

• Work hours and location are flexible
• Low upfront and ongoing costs
• Variety of work that you can do 
• Steady demand 

Graphic Design Cons:

• Less creative than some think since you’re designing to a client’s needs
• Can be a competitive industry

#9. Virtual Assistant Business

VA Business Pros:

• Can work from anywhere that you have a reliable internet connection
• Easy to start and run from home

VA Business Cons:

• Lots of competition for the best-paying roles
• May need to work on the client’s schedule 

#10. Digital or Content Marketing

Marketing Pros:

• Cheap to start and run
• Work is independent and flexible
• Can scale revenue by expanding into an agency
• High demand 

Marketing Cons:

• Can be difficult to build client trust if you don’t already have a big online presence 
• Need to stay current with marketing trends

Home Service Business Ideas

#11. photography business, photography pros:.

• Can be run out of a home or as a mobile service
• Wide variety of work available
• Make a living from your artistic talents
• Meet and interact with a lot of new people

Photography Cons:

• Photography and videography equipment can be expensive 
• Schedule and workload are dependent on your clients

#12. Dog Walking Business

Dog Walking Pros:

• Make a living hanging out with animals
• High and increasing demand
• Stay active while you’re working 

Dog Walking Cons:

• Less scheduling flexibility than other service businesses
• Work can be physically demanding or in unpleasant conditions

#13. Personal Fitness Trainer

Personal trainer pros:.

• Help others improve their lives while building a successful business
• Multiple ways to provide services to clients
• Very low to no initial investment required

Personal Trainer Cons:

• Can be physically demanding and exhausting work
• Often need to adjust when you work based on client needs 

#14. Event Planning

Event Planning Pros:

• Low upfront investment 
• No specialized training or certifications needed
• Meet lots of new people
• Work is varied and interesting

Event Planning Cons:

• Can be a high-stress business 
• Often need to work evenings and weekends

#15. Handyman Business

Handyman pros:.

• Easy to run from home as a one-person operation
• High demand for services
• Doesn’t require licensing or training
• Work when and how often you want to

Handyman Cons:

• Physically demanding work 
• Work can be inconsistent

4 More Unique Service Business Ideas

#16. personal chef, personal chef pros:.

• Less hectic than a restaurant
• Doesn’t require formal licensing or training, but is helpful

Personal Chef Cons:

• Less demand than a restaurant
• May have scheduling conflicts if you serve multiple families

#17. Life Coach

Life coach pros:.

• Build-once-sell-to-many business model
• Multiple streams of revenue
• Great for charismatic people

Life Coach Cons:

• Differentiation may be challenging
• People become immune to strategies
• Many social media platforms will cancel people’s accounts

#18. Mobile Veterinary Services

Mobile Vet Pros:

• Lower cost of doing business than renting or buying stationary space
• People love the convenience
• Premiums can be charged for non-traditional hours

Mobile Vet Cons:

• Less space to work
• Inclimate weather
• Mileage costs 

#19. Fingerprinting Business

Fingerprinting pros:.

• Crime never stops
• Some businesses require fingerprints

Fingerprinting Cons:

• Working with criminals is dangerous 
• Businesses will need less fingerprinting during recessions

Start Your Own Business

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Information Technology Business Plan

Start your own information technology business plan

Information Management Hawaii

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

By focusing on its strengths, its key customers, and the underlying values they need, Information Management Hawai’i, Inc. (IMH) will increase sales steadily in its first three years, while also maintaining the gross margin on sales, with a focus on cash management and working capital.

This business plan leads the way. It renews our vision and strategic focus: adding value to our target market segments, and reinforcing our ties with businesses in our local markets. It also provides the step-by-step plan for improving our sales, gross margin, and profitability.

This plan includes this summary, chapters on the company, products and services, market focus, action plans and forecasts, management team, and the financial plan.

1.1 Objectives

1. Achieve healthy earnings (EBIT) in the first year of operation.

2. Maintain a midrange gross margin throughout the entire operation.

3. Maintain just-in-time (JIT) inventory levels, or 11 turns per year.

4. Increase sales modestly but steadily in the second and third years.

1.2 Mission

To provide the Hawai’i business community with quality brand-name Information Technology business information solutions, reliable and professional Technical Support, and unparalleled Customer Service through the application of the principles of Kina`ole and heartfelt aloha, and to earn a fair profit for our employee-owners and stakeholders by embracing sound, ethical business practices.

1.3 Keys to Success

The keys to our success are:

• Customer Satisfaction Goals vs. Results

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Information Management Hawai’i, Inc., will sell and service digital office information systems for Hawai’i’s businesses, with a focus on the Neighbor Island business community. IMH will be formed as the result of the acquisition of three existing businesses: Maui Office Machines, Inc.; Electronics Hawai’i, Inc.; and, Kauai Office Equipment, Inc.

2.1 Company Ownership

IMH will be privately-held [C corporation] owned in majority by the IMH Employee Stock Ownership Trust. There are currently 15 employees, and all will own equal shares in the ESOT. New employees will be given the opportunity to become vested in the Employee Stock Ownership Plan (ESOP) after a suitable probationary period.

2.2 Start-up Summary

Our start-up costs will be $1M, which includes $450,000 for the acquisition of the Maui and Hilo operations of Servco Integrated Office Technology.

The remainder of the funds will be used for:

• Legal, Insurance, Rent & Misc: $125,000

The start-up funding will be financed by loans arranged through the Small Business Development Center, and by the Hawai’i Community Loan Fund, and the Small Business Administration as a guarantor. Start-up assumptions are shown in the following table and chart.

2.3 Company Locations and Facilities

We have two locations, one in Kahului, Maui and the other in Hilo, Hawai’i. The two offices are presently being leased by Servco Pacific, Inc., and we will rent from them on a month-to-month basis until we are able to relocate to more suitable facilities. On Kauai, we have a sub-contractor agreement with Kauai Office Equipment to handle installations and service.

Products and Services

IMH will acquire an existing operation whose primary business has been the sale and service of business appliances (copiers, facsimiles, printers, etc.) and has operated as a part of the office equipment industry. We will build from this base to transform the business into a value-added provider of the emerging services and technologies of the new Information Industry. Following the lead of Canon, USA and other manufacturers which we represent, we will approach the marketplace from a total systems solutions viewpoint.

This new paradigm will begin with an analysis of the client’s existing and planned business processes, and will provide total workflow solutions utilizing multifunctional imaging platforms and information distribution systems. These systems will be backed by professional and reliable technical service and proactive customer service. By forming strategic alliances with local Information Industry Value-Added Resellers, we will be able to offer turnkey Local Area Network (LAN) systems and the ability to retrofit existing LAN and peer-to-peer systems.

3.1 Sales Literature

Copies of our product and sales literature are attached as appendices. Of course, one of our first tasks will be to change the message of our literature to make sure we are selling the company, rather than the product.

3.2 Product and Service Description

IMH will market and sell brand name business information distribution systems and hardware, technical service and support for these products, and the consumable supplies used by these systems. We will be a single-source provider for business information and imaging products and services.

After researching our various manufacturer’s offerings and evaluating our core competencies, we will focus our marketing and sales efforts around the digital products offered by Canon USA and eCopy, Inc. We will supplement this product line with Lexmark and Hewlett Packard printer products. As we continue to transition the company into the digital marketplace, we will form alliances with additional IT manufacturers and suppliers who can round out our product and services line.

Hardware product offerings will include:

• Hewlett Packard Printer products (laser)

Software offerings will include:

• Canon Image Platform (document distribution)

Service Products include:

• Sale of consumable products for all brand names (Canon, Ricoh, Xerox, HP, Lexmark)

Professional Services include:

• Network design and installation (sub-contracted)

3.3 Competitive Comparison

The only way we can hope to differentiate well is to define the vision of the company to be an information technology ally to our clients. We will not be able to compete in any effective way with the large mainland-based office equipment companies by selling boxes or products as appliances. We need to offer a real alliance to our local customers.

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Unfortunately, we cannot sell the products at a higher price just because we offer services; the market has shown that it will not support that concept. We have to also sell the service and consumable supplies and charge for them separately. This monthly recurring revenue is the foundation of our financial stability.

3.4 Technology

New technology has changed almost everything about the traditional office equipment (copier) industry, and for all practical purposes it no longer exists. The new Information Industry has emerged because of the technology of convergence. The primary driver of convergence of different forms of information is technological change, specifically the rapid diffusion of digital technology into an ever-wider array of information businesses. Beyond digitization, dramatic changes in computing and telecommunications industries (mainly in faster microprocessors and increasing bandwidth) are also driving convergence.

IMH will make convergence the theme of its vision, planning, and marketing strategies. We will move into the new Information Industry’s technology with the aim of bringing the most efficient workflow solutions to our clients while providing value-added customer support and service, and earning a reasonable profit in the process.

3.5 Service and Support

Our strategy hinges on providing unparalleled service and support, which is critical to setting us apart from the competition. We need to differentiate on service and support in order to become true partners with our clients. Our service offers will include:

• Upgrade analysis : we will periodically assess our client’s business processes and requirements, and offer cost-effective upgrade solutions to meet changing needs.

3.6 Future Products and Services

Beginning at start up, we will explore and research new information technologies for inclusion in our product offerings. The products which we choose will be in line with our vision to transition the company from being an appliance seller, to being a provider of total information management solutions. These convergent information products will include:

• Media transport and reproduction (distribute and print)

3.7 Fulfillment

We have an established relationship with our manufacturers and suppliers, and will be able to take advantage of all discounts and promotions in order to keep our margins at roughly 49% throughout the operation. We will also implement and employ “just-in-time” inventory strategies for hardware, supplies, and service parts orders to further strengthen our margins.

As we continue to grow the business, we will evaluate other IT industry manufacturers and product lines to strengthen our offerings with a view primarily to quality and margin advantages.

Market Analysis Summary how to do a market analysis for your business plan.">

IMH will focus on local markets, including small offices and home offices (1-9 employees), medium to large businesses (10-99 employees), corporate Hawai’i (multiple locations or 100+ employees), and local government offices.

4.1 Market Segmentation

Our market segmentation scheme is fairly straightforward, and focuses on all Neighbor Island businesses. The information contained in our customer analysis table is taken directly from the 2000 US Census and government directories, and clearly shows that our largest market potential is the small office and home office (SOHO) segment. This segment is largely overlooked by most of our competitors because of its “low end” buying habits, and a reluctance to compete with the major retail chain box movers. We will target the SOHO market segment with value-added and affordable business solutions customized to its unique needs, and offer the same quality of service and support as are afforded the larger businesses.

The next largest market segment is medium to large businesses, and is the arena where we now focus most of our sales efforts. We will continue to target this segment, but with a different approach than our predecessors. The strategy used by former management has been to bring in selected products, and then attempt to find a buyer. This resulted in inventory overstock, and obsolescence. We will work with the medium to large businesses to determine their needs, and design customized solutions before ordering the required systems (JIT inventory strategy). This segment will remain an extremely important part of our marketing mix, and contains a large portion of our current clients. A majority of our systems upgrade opportunities and repeat business will come from this market segment initially.

Although the Corporate Hawai’i market segment is the smallest in numbers, it has the potential to provide a significant share of our revenues and growth (the 80/20 rule). We have a scattering of current clients in the Corporate Hawai’i segment, but we need to do a better job of penetrating this lucrative end of the market. We will accomplish this by offering professional services to include workflow and network design, MIS support, and other value-added support benefits such as “uptime guarantees.” We will develop long-term relationships within this segment, and earn their business.

The local government market segment is unique in that we act primarily as a “middle man” for our manufacturers due to GSA price schedules and other national government-only programs. This segment is fiercely competitive, very price-focused, and buying decisions are often influenced by “who you know,” as well as price. We are fortunate in that we have long-established relationships within the County and State government agencies, and have many loyal clients in this segment. We will increase our share of this market segment by offering the same value-added service and support benefits that we bring to our commercial clients.

4.2 Target Market Segment Strategy

Developing a market strategy is a departure from the way the company has been managed in the past. We will change the paradigm of being a product- and price-focused sales organization, to that of becoming a customer- and market-focused organization, with all departments sharing responsibility for customer satisfaction. We will accomplish this paradigm shift through the implementation of a balanced scorecard philosophy of management, with special attention to employee learning and growth.

As mentioned previously our market segmentation strategy is straightforward, and addresses all components of the Neighbor Island business community. Planning and implementing specific strategies for each of the four identified segments will be an on-going process, and we will consult with marketing specialists, and our manufacturers, to further refine these efforts as we develop our marketing plan.

4.2.1 Market Trends

That is the primary reason that IMH has chosen Canon USA as its preferred manufacturer. Canon has led the way in the industry with it’s digital technology innovations, and its ability to bring both the product and the concept to the marketplace. We will follow Canon’s lead and bring this efficient, productivity-enhancing technology to Neighbor Island businesses.

4.2.2 Market Growth

As computer prices continue to fall, unit sales increase. The published market research on sales of personal computers is astounding, as the United States market alone is absorbing more than 30 million units per year, and sales are growing at more than 20 percent per year. We could quote Dataquest, Infocorp, IDC, or others; it doesn’t matter, they all agree on high growth of CPU sales.

This rapid growth rate holds true for productivity systems which connect to the computers being sold. The stand-alone analog systems and appliances which abound in the business marketplace today, will be replaced by connected digital convergence systems in the coming months and years. IMH will position itself to be a value-added provider of this rapidly emerging technology for new businesses, while continuing to maintain and upgrade our current analog customer base.

4.2.3 Market Needs

All businesses have in common a need to be continuously productive, and they rely on their service providers and vendors to sustain their productivity. Effectively filling this need requires that the vendor bring to the table sound planning, quality products, reliable service, and a true partnership and support relationship.

Specific business needs include the ability to gather, compile, analyze, and distribute information in various media formats. This is where IMH’s strengths will be most beneficial to our clients, both big and small. Anyone can sell the “box” at an attractive price, but only a true value-added provider can offer the peace-of-mind that comes from a customer-focused approach to the relationship.

Primarily due to geographic isolation and smaller populations, the Neighbor Island business community has an additional common need of being able to rely on other locally-based vendors and suppliers for quick, reliable, customer service and support. Having to call someone on Oahu, or the mainland, to place a service call, or to order supplies, or get an answer to a simple billing question, is both an irritant and a hindrance to most Neighbor Island-based businesses. Our primary goal is to fill this need by bringing true pro-active, and total, customer service to the Neighbor Island business community, and to gain their confidence and loyalty. This will become one of our underlying strengths.

4.3 Service Business Analysis

IMH is a part of the Information Industry, and specializes in providing information management systems and technology for business processes. We envision that a converged information industry operating within the context of an advanced information infrastructure will be a huge boost for U.S. businesses. Several Washington think tanks estimate that it could spur more than $300 billion annually in new sales and increase worker productivity by 20 to 40 percent.

At the present time, an estimated two-thirds of all American jobs are information related, and that number will increase as the shift from manufacturing to service industries continues. The convergence of information industries will continue because the technological and business imperatives are compelling. If one company does not see the possibilities, another will.

4.3.1 Competition and Buying Patterns

Business decision makers and finance managers understand the concept and value of service and support, and are much more likely to pay for it when the offering is clearly stated.

There is no doubt that we compete more against the box pushers than against other service providers. We need to effectively compete against the idea that businesses should  buy information platforms as plug-in appliances that don’t need ongoing service, support, and training.

Our research and experience has indicated that our target market segments think about price, but would buy based on quality service if the offering were properly presented. They think about price because that is what is traditionally presented to them first. We have very good indications that many would rather pay 10-20% more for a relationship with a long-term vendor providing back-up and quality service and support. They end up in the box-pusher channels because they are not aware of the alternatives.

Availability is also very important. The business decision makers tend to want immediate, local solutions to problems.

4.3.2 Distributing a Service

Medium to large business segment buyers are accustomed to buying from vendors who visit their offices. They expect the copy machine vendors, office products vendors, and office furniture vendors, as well as the local graphic artists, freelance writers, or whomever, to visit their office to make their sales.

Unfortunately our SOHO target segment buyers may not expect to buy from us. Many of them turn immediately to the retail superstores (office equipment, office supplies, and electronics), the Web, and mail order to look for the best price, without realizing that there is a better option for them for only a little bit more. We will overcome this hurdle through innovative service offerings, and targeted marketing.

4.3.3 Main Competitors

In our higher-end targeted segments (medium to large businesses, corporate Hawai’i, and government offices), the primary competitors are Xerox and Lanier. The secondary “low end” competitors on the Neighbor Islands are Maui Office Machines and Business Equipment on Maui, and Electronics Hawai’i and Stationers on the Big Island. Our overall competitive strategy in these segments will be Canon’s superior technology, and superior value-added service and support.

In our SOHO target segment, the primary competitors are the superstores: Office Max, Office Depot, Sears, and to some extent Costco, Hopaco, and the Web. While these outlets can offer lower prices, they offer no (or very little) aftermarket service or support. That is our competitive advantage in this segment, and will differentiate us from these “box movers.”

4.3.4 Business Participants

The traditional office equipment (copier) industry has been dominated by only a few major manufacturers: Xerox, Canon, Oce, and Ricoh (and its OEM products – Lanier, Savin, and Gestetner); and then come the low-end players: Sharp, Toshiba, and Minolta. With the exception of Xerox, which maintains its own sales force, the other manufacturers distribute and sell mainly through authorized dealers.

The rapidly emerging Information Industry’s digital convergence products will most likely be dominated by the same participants as described above. While Xerox has been a past leader in the manufacture and sales of analog products, Canon has emerged as both an innovator, and the leader, in the new Information Industry with their ImageRunner digital products and Image Platform information distribution systems. Canon is also (and has been for many years) the front runner in color repro-graphic systems, and holds the most patents of any manufacturer in the industry.

Strategy and Implementation Summary

We must differentiate ourselves from the box pushers. We need to establish our business offering as a clear and viable alternative for our target markets, to the price oriented sales pitch to which they are accustomed.

• 30-day sales window – war with competition mainly on price.

The industry’s cheese has been moved. In order to shift to a more contemporary paradigm, our marketing and sales efforts will need:

• A new marketing concept – customer oriented, profit oriented, integrated efforts.

5.1 Competitive Edge

Our competitive edge is our positioning as a strategic ally with our clients, who are clients more than customers. By building a business based on long-standing relationships with satisfied clients, we simultaneously build defenses against competition. The longer the relationship stands, the more we help our clients understand what we offer them and why they should both stay with IMH, and refer us to other businesses. In close-knit communities like the Neighbor Islands, reputation is extremely important, and word-of-mouth advertising is invaluable.

5.2 Strategy Pyramid

Our main strategy will be placing emphasis on service and support, and our main tactics are networking expertise, systems training, and implementing a customer relationship management system (CRM) from e-automate. Our specific programs for networking include mailers and internal training. Specific programs for end user training include direct mail promotion, and on-site customer programs. Implementing the CRM software and training will be coordinated with the e-automate Corporation.

Our second strategy is emphasizing relationships. The tactics are marketing the company (instead of the products), more regular contacts with the customer, and increasing sales per customer. Programs for marketing the company include new sales literature, and direct mail. Programs for more regular contacts include call-backs after installation, direct mail, and sales management. Programs for increasing sales per customer include upgrade mailings and sales training.

5.3 Value Proposition

IMH offers its clients peace-of-mind by being a vendor who acts as a strategic ally, and delivers quality products backed by premium service and support, at a premium price.

5.4 Sales Strategy

We will sell the company and its ability to act as an ally. We will sell IMH, and the reputation of the industry-leading manufacturers it represents.

We will sell our service and support. The hardware is like the razor, and the support, service, software, and training, are the razor blades. We need to serve our customers with total solutions, and not just product features. The products are a means to arriving at end solutions.

The Yearly Total Sales chart summarizes our conservative sales forecast. We expect sales to increase from $3.1 million in the first year to more than $4 million in the third year of this plan.

5.4.1 Sales Forecast

The important elements of the sales forecast are shown in the following Chart, and Table 5.4.1. Non-hardware sales increase to almost $2 million total in the third year, or 47% of total sales.

5.5 Milestones

The following table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation. The most important programs are the sales and marketing programs listed in detail in the previous topics.

5.6 Marketing Strategy

The marketing strategy is the core of our main strategy:

• Develop specific programs for each target market segment:
• Government Offices – workflow/process surveys, uptime guarantees, GSA rates and incentives

5.6.1 Sales Programs

Specific sales programs will be included in our new Marketing Plan, and will be included in this Business Plan as they are finalized. In general however, our sales programs will be centered around conducting workflow and information distribution analyses, direct mail, and placing an emphasis on the benefits which IMH and its manufacturers will be able to offer its clients through “total care” service and support.

5.6.2 Positioning Statement

For businesses who want to be sure their information distribution systems are always working reliably, IMH is a vendor and trusted strategic ally who makes certain their systems work, their people are trained, and their down time is minimal. Unlike the product/price oriented vendors, it knows the customer and goes to their site when needed, and offers proactive support, service, training, and installation.

5.6.3 Pricing Strategy

We must charge appropriately for the high-end, high-quality service and support we offer. Our revenue structure has to match our cost structure, so the salaries we pay to assure good service and support must be balanced by the revenue we charge.

We cannot build the service and support revenue into the price of products. The market can’t bear the higher prices and the buyer feels ill-used when they see a similar product priced lower with the competition. Despite the logic behind this, the market doesn’t support this concept.

5.6.4 Promotion Strategy

We will employ the following general promotional strategies for the various market segments:

• SOHO: We will depend on periodic local newspaper advertising, to reach new buyers in this segment. We will also utilize direct mail and and the resources of the local Chambers of Commerce and other affinity groups to reach this segment. The message will emphasize service first, and “complete product and service packaging” as a secondary theme.
• Medium to Large Businesses: Direct face-to-face contact (direct sales) will continue to be our primary strategy for this market segment. Direct selling will be supplemented by periodic promotional direct mailings and personalized system upgrade opportunities.
• Corporate Hawai’i: This segment will be handled by direct contact and relationship building only. We will make personal presentations to the decision makers in this group, and stress our service and technical benefits and advantages.
• Government Offices: We will utilize a combination of direct mail and face-to-face promotional strategies with this segment, and the message will be the local service and technical advantages of IMH. We will produce an attractive RFQ/RFP response package to accompany our submissions.

5.6.5 Distribution Strategy

IMH is first and foremost a direct sales organization, meaning that we must present our services and products directly to the majority of our customers and clients. Having said that, for our planned penetration into the SOHO market, we will need to establish a presence as a Value-Added Reseller (VAR) for certain low-end product lines which don’t carry the margins necessary to sustain the costs of direct sales. We will plan our new locations accordingly.

5.6.6 Marketing Programs

As we work to complete this Business Plan, we are simultaneously working on our Marketing Plan. As you can see from the milestones table, we anticipate completion of our detailed Marketing Plan by 9/30/01, or one month from start-up. Because we are acquiring an on-going business, the shift to our vision of customer- and market-focused strategies will not happen overnight. We must plan this shift carefully, and implement it judiciously, so as not to disrupt our immediate operations. We have budgeted for, and will utilize, marketing advisors and consultants (including our manufacturers) in the design of our Marketing Plan.

5.7 Strategic Alliances

Our alliances with our manufacturers, and especially Canon USA, will be the most pivotal to our success. We will remain a Canon Authorized Dealer, and continue to enjoy all of the benefits of this long-standing relationship.

We will form alliances with other locally-based VARs and computer network providers to enable us to provide complete turnkey packages for our clients. These relationships will be included in our Marketing Plan.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Our management philosophy is simple and is an integral part of our values: doing right things right, the first time (Kina’ole).

IMH will be an employee-owned company and we all share the same vision of providing our clients (who in many cases are friends and neighbors) with the very best in customer service – period. We will encourage personal growth, creativity, and enable individual empowerment to achieve this goal. We will manage the business by setting achievable Balanced Scorecard goals, measuring them, and making mid-stream adjustments as necessary.

6.1 Organizational Structure

Our team includes 15 employees initially, and is organizationally flat. The departmental divisions are sales and marketing, service, and administration. Operational managers include:

• Systems Manager (two positions – Big Island and Maui): Oversees all service issues including service agreements, service call prioritization and response, carry-in service, customer support, and systems training and development. Will be assisted by Systems Engineers, and Systems Technicians.

6.2 Personnel Plan

The total head count moving over from Servco at the time of the acquisition will be 13. We are adding two former employees at startup to round out our team, for a total startup head count of 15.

There are an additional six positions shown as “vacant” in the Personnel plan. During each quarterly business plan review, we will assess the need to fund these positions to sustain our growth, and more evenly distribute the workload.

6.3 Management Team

Bill Harding, president and general manager:  XX years old, and has lived on Maui for 43 years. Joined SIOT in 1998 as Maui branch manager, and became general manager for Neighbor Island operations six months later. Prior management experience includes: BTA market manager of the Neighbor Islands for VoiceStream Wireless, Neighbor Island area sales manager for Central Security Systems, and radar project manager for Telcom International in Nigeria, West Africa. Bill has attended numerous management and sales training courses and seminars throughout his career.

Laurie Watson, secretary/treasurer and administrative manager: XX years old, and local Maui resident. Has been at the same location through three different owners prior to Servco’s acquisition of The Office Place in 1995, for a total of 15 years of local office equipment industry experience. Laurie has extensive knowledge of service procedures and dispatching, A/R and A/P procedures, inventory control and tracking, as well as an intimate knowledge of our customer base. Her experience and knowledge will be invaluable in recovering our customer base, and in growing the business.

Anne Tioganco, office manager (Hilo): XX years old, and local Hilo resident. Anne has also been with the company through all of the acquisitions, and has XX years experience in the office equipment industry. She will assist Laurie by handling the administrative and customer service tasks for our Hilo branch, and will be instrumental in our Big Island customer recovery efforts.

Earle Oshiro, systems manager (Big Island): XX years old, and local Hilo resident. Like Laurie and Anne above, Earle has been with the company through four different owners, and has XX years of local office equipment service management experience. Earle has also completed Canon’s “train the trainer” course, and will be a great asset in the on-going training and development of our systems engineers and technicians.

Joseph Alfonsi, systems manager (Maui): XX years old, and local Maui resident. Joe joined the Maui branch of SIOT in 1999 as field service manager, after transferring from the SIOT Honolulu branch. He has XX years of local office equipment industry service experience, and is familiar with both Canon and Ricoh products. Joe is an asset to the Maui team, and has outstanding customer service skills.

6.4 Management Team Gaps

We believe we have a good team for covering the main points of the business plan. Key members have the experience and knowledge to manage and grow the business, and are highly motivated by the employee-owner concept.

The obvious management gap is a plan to fill the general manager’s position at some point in the future, before the current GM reaches retirement age. As an employee-owned company, the preferred strategy will be to promote from within, and fill vacancies as they occur. As the company grows, we will seek out additional talent in all operational areas.

Financial Plan investor-ready personnel plan .">

Although we are treating the business as a start-up company, the financial plan is solidly based on past performance. We have taken actual SIOT P&L income and expenses from the past three years, and eliminated corporate overhead expenses such as warehouse and administrative costs, inventory penalties, and corporate nominal interest. We then projected income based on actual past performance, and factored back in the revenue base that was relocated to Honolulu over the past two years (mainly service and supplies).

We approached the financial planning from a conservative standpoint, and based those numbers on achievable gross margins. Also, our actual interest and tax rates will most likely be lower than the assumed rates due to our being structured as an employee-owned corporation (ESOT).

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in Table 7.1. As mentioned previously, we assumed interest and tax rates based on a “worst case” scenario, and these will be adjusted once we have finalized the initial funding and establish the ESOT. We have also assumed our personnel burden at 30% of payroll in order to allow for above-average benefits for our employees. As we shop around for benefits vendors, this assumption will be subject to revision as well.

Other key business assumptions are:

• We assume access to the start-up funding necessary to re-shape and re-build the company, and to provide adequate initial capitalization.

7.2 Key Financial Indicators

As shown in the Benchmarks chart below, our key financial indicators are:

• Inventory Turnover: We will maintain just-in-time inventory levels, or 11 turns per year. This will require accurate sales forecasting, and working closely with our manufacturers. We have already begun this process under SIOT, and the Neighbor Island inventory levels are well below previous years.

7.3 Break-even Analysis

For our break-even analysis, we assume running costs which include our full payroll, rent, and utilities, and an estimation of other running costs. Payroll alone, at present, is about $65,500 per month (including benefits and taxes).

We will monitor gross margins very closely, and maintain them at a midrange percentage by taking advantage of all promotions and discounts offered by our manufacturers. Canon USA has tentatively agreed to offer us “end column” pricing as a new dealer incentive.

The chart shows what we need to sell per month to break even, according to these assumptions. This is about 78% of our projected sales for our first year, and is well below what we have achieved annually over the past three years under more adverse operating conditions.

7.4 Projected Profit and Loss

Our Pro Forma Profit and Loss statement was constructed from a conservative point-of-view, and is based in large part on past performance. By strengthening our service position, and rebuilding our customer relationships, we will widen our customer base and increase sales.

Month-to-month assumptions for profit and loss are included in the appendix.

7.5 Projected Cash Flow

Because we are treating the new company as a start-up, the cash flow for FY2002 is somewhat exaggerated by the instant influx of new capital. Subsequent years however show a healthy growth in cash flow, mainly due to the short 60-month repayment of the start-up loan and increased sales.

7.6 Projected Balance Sheet

The Projected Balance Sheet is quite solid. We do not project any trouble meeting our debt obligations as long as we achieve our specific objectives.

7.7 Business Ratios

The following table shows our main business ratios, and is compared to national averages. Our SIC industry class is currently: Office equipment, nec – 5044.99.

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1. Why is utilizing an example business plan a good idea?

Sample business plans can help you quickly and easily write a business plan for your own business. Business plans are an important tool for any business, but they can be challenging to create. Sample business plan will help you understand business plan format , how to utilize the best business plan template , and more.

Business plan examples may even help you with the different sections of a plan, including market analysis, company description, cash flow statements/business financial statements, and more. Business plans can also show you how a quality plan in your exact business plan category is organized and shows you the appropriate business communications style to use when writing your business plan.

2. Who would benefit from using an example business plan?

Any entrepreneur or business owner who has never written a business plan before can benefit from an example or sample plan. New business owners often start with business plan templates , which are helpful but are sometimes more useful after reviewing other full business plans.

A good sample plan can be a step-by-step guide as you work on your business planning and business idea. Once you have a sense for the flow, specs, and details, etc. that business plans have, utilizing a business plan template will help you pull everything together, helping you create a plan investors and other stakeholders will value. A solid plan will also help you if you need a bank loan, which may require a startup business plan.

3. How do you get started with a sample business plan and maximize its benefit?

First you should read the business plan thoroughly. Study both the type of information provided in key sections like the executive summary, target market analysis, summary, etc., as well as the format and style of the plan. As you read, you may find yourself thinking through things such as improving or evaluating your business planning process, your business idea, or reconsidering who you want to write your business plan for. This is OK and part of the process. In fact, when you start writing a business plan for the first time, it will be much easier because you’ve gone through this process.

After this initial read, outline your business plan and copy in from the sample plan sections that apply to your business. For instance, if the sample plan included public relations in their marketing strategy and sales plan, and you will also use this tactic, you can copy it into your plan and edit it as appropriate. Finally, answer the other questions answered in the sample plan in ways that reflect your unique business and potential customers.

Writing a business plan can seem daunting. Starting your business plan writing process by reviewing a plan that’s already been created can remove a lot of mental and emotional barriers while helping you craft the best plan you can.

4. When should you not use a sample business plan?

If your business is unlike any other, using a sample business plan will not be as effective. In this situation, writing a business plan from scratch utilizing a business plan template is probably your best path forward.

As an example, Facebook’s early business plan was unlike others since it was paving a new path and way of doing business. But, groundbreaking new businesses like Facebook are not the norm, and the vast majority of companies will benefit from utilizing sample business plans.

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The business plan example below is for Shoutmouth, a company that enjoyed much success in the early 2000’s and which was able to raise funding. While the plan’s premise (social networking) is not as unique now as it was then, the format and structure of this business plan still holds.

I. Executive Summary

Business Overview

Launched in late February 2007, Shoutmouth.com is the most comprehensive music news website on the Internet .

Music is one of the most searched and accessed interests on the Internet. Top music artists like Akon receive over 3 million searches each month. In addition, over 500 music artists each receive over 25,000 searches a month.

However, music fans are largely unsatisfied when it comes to the news and information they seek on the artists they love. This is because most music websites (e.g., RollingStone.com, MTV.com, Billboard.com, etc.) cover only the top eight to ten music stories each day – the stories with mass appeal. This type of generic coverage does not satisfy the needs of serious music fans. Music fans generally listen to many different artists and genres of music. By publishing over 100 music stories each day, Shoutmouth enables these fans to read news on all their favorite artists.

In addition to publishing comprehensive music news on over 1200 music artists, Shoutmouth is a social network that allows fans to meet and communicate with other fans about music, and allows them to:

• Create personal profiles
• Interact with other members
• Provide comments on news stories and music videos
• Submit news stories and videos
• Recommend new music artists to add to the community
• Receive customized news and email alerts on their favorite artists

Success Factors

Shoutmouth is uniquely qualified to succeed due to the following reasons:

• Entrepreneurial track record : Shoutmouth’s CEO and team have helped launch numerous successful ventures.
• Affiliate marketing track record : Online affiliate marketing expertise has been cited as one of MySpace’s key success factors. Over the past two years, Shoutmouth’s founders have run one of the most successful online affiliate marketing programs, having sold products to over 500,000 music customers online.
• Key milestones completed : Shoutmouth’s founders have invested $500,000 to-date to staff the company (we currently have an 11-person full-time team), build the core technology, and launch the site. We have succeeded in gaining initial customer traction with 50,000 unique visitors in March, 100,000 unique visitors in April, and 200,000 unique visitors in May 2007.

Unique Investment Metrics

The Shoutmouth investment opportunity is very exciting due to the metrics of the business.

To begin, over the past two years, over twenty social networks have been acquired. The value in these networks is their relationships with large numbers of customers, which allow acquirers to effectively sell to this audience.

The sales price of these social networks has ranged from $25 to $137 per member. Shoutmouth has the ability to enroll members at less than $1 each, thus providing an extraordinary return on marketing expenditures. In fact, during an April 2007 test, we were able to sign-up 2,000 members to artist-specific Shoutmouth newsletters at a cost of only 43 cents per member.

While we are building Shoutmouth to last, potential acquirers include many types of companies that seek relationships with music fans such as music media/publishing (e.g., MTV, Rolling Stone), ticketing (e.g., Ticketmaster, LiveNation) and digital music sales firms (e.g., iTunes, The Orchard).

Financial Strategy, Needs and Exit Strategy

While Shoutmouth’s technological, marketing and operational infrastructure has been developed, we currently require $3 million to execute on our marketing and technology plan over the next 24 months until we hit profitability.

Shoutmouth will primarily generate revenues from selling advertising space. As technologies evolve that allow us to seamlessly integrate music sampling and purchasing on our site, sales of downloadable music are also expected to become a significant revenue source. To a lesser extent, we may sell other music-related items such as ringtones, concert tickets, and apparel.

Topline projections over the next three years are as follows:

II. Shoutmouth Overview

What is Shoutmouth?

Shoutmouth is an operating company of The Kisco Group Inc. (TKG). Since 2003, TKG has capitalized on web-based marketing opportunities via launching targeted websites and generating web-based leads. TKG revenues in 2005 exceeded $1.3 million and grew to $3.5 million in 2006. Shoutmouth is currently the sole focus of TKG; all other TKG business units have been divested.

Development of Shoutmouth began in August 2006 and the site officially launched on February 21, 2007. Shoutmouth (located at www.shoutmouth.com) is the most comprehensive music news community on the Internet. The website covers 1,200 popular bands and music artists and offers more than 100 new music articles each day. In addition to providing news, Shoutmouth is a web community. That is, Shoutmouth members can actively participate on the site, by doing things such as commenting on news stories and submitting their own stories.

The Market Size and Need for Shoutmouth

The music market is clearly vast. According to IFPI, which represents the recording industry worldwide, global music sales were $33.5 billion in 2005, with the U.S. accounting for $12.3 billion of that amount. Importantly, digitally music sales are seeing substantial growth, with IFPI reporting sales of $400 million in 2004, $1.1 billion in 2005 and $2 billion in 2006.

Online, music is the one of the most frequently searched and accessed interests. For example, according to Wordtracker, the music artist Eminem received over 1.7 million web searches in December 2006, while band Green Day received 534,000 searches.

To put these figures in perspective, top celebrities in other entertainment fields receive but a fraction of this search volume. For example, December 2006 search volumes for select sports stars and actors were as follows: Kobe Bryant, 122K; Tiger Woods, 88K; Cameron Diaz, 332K; and Tom Cruise, 82K.

Conversely, 225 music artists received over 100,000 searches in December 2006, and over 500 music artists received over 25,000 searches.

This data is corroborated by Nielsen BuzzMetrics which plots the most popular topics bloggers are posting about. The chart to the right plots September 25, 2006 to March 25, 2007 and shows how music dominates other entertainment sectors online.

When searching for music artists online, fans, which are primarily between the ages of 13 and 35, are looking for news, pictures, lyrics, videos and audio files. In addition, fans enjoy publicly voicing their opinions about music and interacting with other fans.

There is currently no website besides Shoutmouth that provides comprehensive music news. Currently, to get the latest news on their favorite artists, fans must visit the official websites or fan websites of each of the artists they like . Even then, it is unlikely that the fan will get all the news that has occurred. To solve this problem, Shoutmouth scours the web and uncovers news from thousands of web sites.

What Shoutmouth Does and Will Offer

As of May 2007, the site covers the 1,200 most popular music artists (popularity primarily based on the number of web searches over the past 12 months for each artist).

Shoutmouth currently offers members the ability to:

• Read over 500 new music articles each week
• Read special features such as album reviews, interviews, new album release dates, top quotes of the week and other special reports
• Watch and rate music videos
• Listen to select music audio clips
• Comment on news stories and music videos
• Submit news stories that they see/hear of elsewhere
• Suggest new music artists to add to the site
• View articles by music artist or by genre (current genres include Rock, Pop, Rap, R&B, Country, and Electronic)
• Create a user profile that includes their favorite music artists, Shoutmouth friends, news stories submitted to Shoutmouth, and comments made. Members have the ability to find other members based on their favorite artists and via our search functions.
• Receive customized news and email alerts. Members can customize their “My News” page to include only artists they specify. Likewise, they can choose to receive email alerts whenever there is a new story on one of their favorite artists.

While establishing itself as the premier music news community, Shoutmouth will embark on the more aggressive goal of becoming the premier music community online . To accomplish this, Shoutmouth will begin to offer additional content (more videos, audio, pictures, lyrics, etc.) and additional functionality (music compatibility testing (e.g., if you like this, you’ll like this), voting capabilities, member-to-member messaging, etc.). We have already begun mapping out our content and technology growths plans to achieve this goal upon financing.

Importantly, Shoutmouth expects to be able to add massive amounts of relevant content (e.g., lyrics, reviews, pictures, video files, audio files, etc.) via member submissions and moderation. This is the same way that YouTube has been able to quickly add millions of videos and Wikipedia has been able to add millions of articles. Importantly, since established music websites (e.g., MTV, RollingStone.com, Billboard.com, etc.) are not community based, they would have to hire thousands of staff members to rival the content that Shoutmouth will have.

How We Get and Publish Our News

Currently, news stories that appear on Shoutmouth are gathered from numerous online sources. Shoutmouth’s staff writers find these stories by using RSS and News feeds that cover thousands of websites. In addition, Shoutmouth community members have the ability to submit stories they find elsewhere.

Typical stories include factual information plus the insight of the author. Shoutmouth editors ensure that all stories are properly classified by artist and genre, and that duplicate articles are filtered out.

Over the past three months, Shoutmouth has developed a solid infrastructure, which we consider a core competitive advantage, that that allows us to provide comprehensive music news . This infrastructure includes:

• Setting up hundreds of RSS feeds based on comprehensive research regarding sites from which to receive feeds
• Training our editorial team regarding identifying a story and weeding out duplicates
• Assigning music artists among our five-person editorial team to better manage work flow and avoid duplicate articles

We are working on a system to ensure that member-submitted articles are automatically routed to the appropriate member of Shoutmouth’s editorial team to improve our efficiencies further.

Shoutmouth’s Goal to Break News First

The majority (approximately 90%) of Shoutmouth’s articles are currently developed by our in-house editorial team, while the balance is submitted by members. In addition, virtually all of our articles are based on information gleaned from other websites. As such, we are generally not the first to publish news; however we are the first and only site to publish all the news in one easily-accessible place. The one current exception is news which is published on bands’ official MySpace pages; Shoutmouth generally publishes articles on this news 24 to 48 hours before it is reported by other news or music sites (due to our efficiencies in finding news).

Shoutmouth realizes that it will gain a key competitive advantage, and will generate significant market buzz, if it is able to report on music news stories before other media sources . To accomplish this, we have begun contacting publicity departments at record labels to gain direct access to music news. We expect these contacts to enable us to gain immediate and sometimes exclusive access to news which will help further establish Shoutmouth as the canonical source for music news. We also plan to more aggressively solicit member submissions of new, buzzworthy news events and will consider offering rewards for unique substantiated news (much the way paparazzi are compensated).

III. Competition in the Online Music Market

This section of the business plan provides a competitive analysis, which is an overview of the competitive landscape, discusses both indirect and direct competitors and then details Shoutmouth’s competitive advantages.

Because consumer demand for music on the Internet is so great, there are a vast number of music websites. In summary, we consider most sectors of the online music market (which are discussed below) to be indirect competitors and potentially partners, rather than direct competitors, because none of them focus on music news.

The reason we believe that no one focuses on music news is that it is very difficult to do. Because news is very important to music fans, most music websites offer news. However, they primarily get their news from organizations such as CNN, Reuters, the Associated Press and BBC. These large organizations only write about the music stories that have mass appeal, which traditionally amounts to 8-10 music news stories per day. However, since music fans are often zealots when it comes to their favorite artists, they are not merely interested in cover stories. For instance, a U2 fan cares about any U2 news, particularly news that a non-U2 fan might consider insignificant.

In fact, because Shoutmouth is the sole one-stop shop for getting comprehensive music news, there might be an opportunity to license our content to other music websites.

Sectors of the Online Music Market

Shoutmouth specifically comPs in the community-based music news market. While players in this market represent direct competitors, Shoutmouth faces indirect competitors in the following markets:

• Community-Based Sites
• Community-Based News Sites
• Community-Based Music Sites
• Traditional Music Websites
• Official Artist and Fan Sites

Each of these markets is described below.

A. Community-Based Sites

Community-based sites, also known as social networking sites, are websites in which members can create profiles, leave comments throughout the site, and communicate with other members among other features.

A June 2006 report by Piper Jaffray entitled “Silk Road: Social Networking is Here to Stay” effectively sums up the power and longevity of social networking:

“We believe social networking sites have become a permanent part of the fabric of web applications and are rapidly becoming one of the most popular activities online, potentially impacting how other popular services such as email, IM, and maybe even search are accessed.

As a clear indication of the growth rate and scale of social networking, consider this: MySpace monthly page views have now surpassed MSN or AOL in the U.S. and are nearly 75% of the size of Yahoo!. Social networking has filled a gap that was left by all the existing portals and web services and it is fulfilling a very important and basic function for millions of users: allowing them to express themselves and connect with their friends, with the two functions tightly integrated.

The leading sites such as MySpace (News Corp), Facebook, and others are amassing significant power in the new landscape of the Internet and the existing Internet companies are likely to have to work with these newcomers as they may yield material control on the flow of traffic to other applications.”

Social networking sites such as MySpace.com, Facebook.com, Tagged.com, and TagWorld.com have educated consumers regarding the value of these sites and how to use them. Their success has spurred genre-specific social networks such as community-based/social networking news sites and music sites, which are discussed below.

Shoutmouth doesn’t view established social networking sites as competitors since these sites have a general focus. That is, members talk about all aspects of life, from dating to music to movies, etc. Conversely, Shoutmouth is solely focused on music.

B. Community-Based News Sites

Community-based news sites are sites in which members decide what’s newsworthy and what’s not. For instance, on Digg.com, the most prominent community-based news site, members “Digg” stories that they feel are most newsworthy. The stories that the community feels are most important rise to Digg’s homepage, while less important stories get little attention.

Digg’s one million members can submit stories, “digg” stories, and comment on stories. Digg focuses on general news with a slant towards technology, gaming and unique/sensational news. While Digg does have a Music area within its Entertainment section, this receives little focus. In fact, at the time of the writing of this plan, Digg’s music home page only includes one article submitted within the past 48 hours. Furthermore, Digg doesn’t pare down the music category into sub-categories such as Rock and individual music artists. Conversely, these sub-categories are the entire focus of Shoutmouth.

Other sites that are similar to Digg include Newsvine.com, Spotback.com and Gabbr.com. Of most relevance is the Digg-like site for music, Noisetap.com, which was launched by Ticketmaster in January 2007.

Like Digg, Noisetap.com allows members to submit and vote for music stories. Noisetap.com is organized by music genre and not by music artist. This most likely will not satisfy the needs of many music fans since they don’t have the ability to find news on the specific artists they care most about. Likewise, without a full-time staff actively researching and publishing news stories at the artist-level, Noisetap.com will never be able to offer the comprehensive news that Shoutmouth does.

While Shoutmouth is currently similar to community-based news sites in that members can submit stories and comment on the news they find most interesting, no established player in the market provides a comprehensive focus on music. In addition, Shoutmouth sees these sites as marketing partners as we have and will continue to submit our stories on them to increase our readership.

C. Community-Based Music Sites

There are many community-based music websites, although none focuses on music news such as Shoutmouth. Conversely, these sites generally give members the ability to create and listen to song play lists. The community acts to help individual members find new music and new friends based on similarities in their music tastes. Prominent sites in this genre include Last.fm, Finetune, Pandora, RadioBlogClub, MyStrands, iLike[1] and iJigg.

Last.fm is the most prominent community-based music site and is a good model with which to compare Shoutmouth. Likewise, we will benchmark our performance against Last.fm as we reach of goal of becoming the premier music news community and focus on becoming the premier music community.

According to Alexa, Last.fm is the 359th most visited site on the Internet. While Last.fm focuses on allowing members to create customized Internet stations based on their music tastes, the site has much additional content and social networking features. For instance, for each artist, Last.fm includes pictures, a bio, concert dates, discography, fans on Last.fm, and similar artists. Fans are also able to create journals and communicate with other fans. Key features that Last.fm doesn’t currently focus on include news and video.

D. Traditional Music Websites

Traditional music websites such as MTV.com, RollingStone.com, Billboard.com, NME.com, AOL Music, and Yahoo! Music tend to have many features such as news, reviews, pictures, videos and audio. While these sites are generally very well done and extremely popular, they are under-serving visitors in two core areas: music news and community .

These sites’ lack of music news stems from the difficulty in creating this news, specifically that it requires filtering through thousands of articles and websites to find relevant stories. Likewise, as discussed, these firms might wish to license our news content in the future.

Regarding community , none of the top music sites are thriving communities. Rather, either these sites offer no community features or they recently began offering select features (e.g., submitting reviews or commenting on articles). Even when available, the community features on these sites are afterthoughts and are not engrained within the core fabric of the sites.

While they haven’t been able to transform their current sites into communities, top music websites clearly understand the power of online music communities and have an appetite for them. For example, in January 2007, MTV invested in social networking website TagWorld. MTV also acquired RateMyProfessors.com and Quizilla.com (teen social network) in January 2007 and October 2006 respectively.

As mentioned previously, our vision is to build and incorporate additional technologies, and use our “army” of members to publish vast amounts of music content on Shoutmouth, in order to fully satisfy music fans and leapfrog traditional music sites in terms of their music content.

E. Official Artist and Fan Sites

Shoutmouth com’s with official music artist websites and fan websites. These sites often include news about the specific artist as well as pictures, videos and other relevant information.

On one hand, official music artist and fan websites are direct competitors to Shoutmouth. This is because some of these sites offer comprehensive news on the specific artist they cover. In addition, many offer forums, discussion boards or other ways to communicate with other fans.

However, two factors separate Shoutmouth from these types of sites: 1) breadth and 2) sophistication.

• Breadth : Most music fans love more than one artist. As such, in order to get the news they want, they would have to visit/join multiple fan or artist websites rather than getting all of their news from Shoutmouth.
• Sophistication : While some official music artist websites are technologically sophisticated, offering forums, networking and other worthwhile features, the majority of artist and fan websites have limited usability, functionality and networking ability. In fact, this deficiency has lead to the success of MusicToday, which provides front and back-end technology to power artist websites.

Specifically, MusicToday offers web design and hosting, develops sophisticated online stores, builds online fan clubs and offers web ticketing among other services to select top music artists such as Dave Matthews Band, Christina Aguilera, Kenny Chesney, Britney Spears and Usher. While offering sophisticated tools for select music artist websites, MusicToday offers little to no music news nor advanced social networking functions. For instance, the official Dave Matthews Band website offers less than one news story per month.

F. Direct Competitors: Community-Based Music News Sites

Shoutmouth’s direct competitors are other music news websites that have social or community features that allow users to join the site, submit articles, comment on articles, create public profiles and/or communicate with other members. Shoutmouth has identified one significant player who offers this service, AbsolutePunk.net.

AbsolutePunk.net has done a good job of building a user base (the site claims 125,000+ registered members and nearly 500,000 un-registered members). In addition, the user base is very active — the average story on their site receives approximately 20 comments. AbsolutePunk.net offers music news, reviews, pictures and interviews among other features.

On the negative side, AbsolutePunk.net’s articles are generally posted by one staff writer (as opposed to Shoutmouth’s five writers), most articles are simply one sentence posts rather than full articles, and no attempt seems to have been made to cover all news stories. In addition, the site only covers the punk music genre. Although “punk” is broadly defined on the site, the site doesn’t cater to genres such as R&B, rap and country among others, failing to satisfy the broader market.

AbsolutePunk.net is owned by Indieclick, a Los Angeles-based media company. According to the AbsolutePunk.net website, the site:

• Has developed a loyal (72% return rate) reader base
• 5,182,147 Posts
• 163,535 Threads
• 126,448 Members
• 1,711 Artist Profiles
• 20,774 Multimedia Files
• Approx 76,000 visits per day.
• Approx 276,000 pageviews per day.

Shoutmouth’s Competitive Advantage

In addition to being the first to fill the untapped market void for comprehensive music news, Shoutmouth’s competitive advantage in the market primarily includes the following:

Online Marketing Sophistication

Content Development Experience and Expertise

Shoutmouth’s team, primarily team members DL and PF, has operated an affiliate marketing business focusing on music for the past four years. Affiliate marketing is defined as a system of revenue sharing between one site (the affiliate) which features an ad or content designed to drive traffic to another site (the merchant). The affiliate receives a fee based on traffic to the merchant which converts to sales.

Our affiliate business has focused on connecting music fans, primarily aged 13 to 30, with music offers such as iPods and ringtones. Over the past two years, we have successful sold affiliated offers to over 500,000 customers. We have become a significant online advertiser, receiving Google’s “over 1 million leads” award, and are recognized as a major player among the top affiliate networks.

It is important to note that affiliate marketing success has been credited with part of MySpace’s success. This is because effective affiliate marketers understand how to drive and convert on Internet traffic.

Shoutmouth will employ its affiliate marketing techniques to drive traffic to Shoutmouth.com and enroll members. We will utilize technologies and proprietary techniques that allow us to monitor multiple metrics such as the cost per visitor, cost per member sign-up, etc., so that we can set and maintain profitable metrics.

Another venture that Shoutmouth team members, primarily PK and DL, launched was the development of over 3,000 niche websites. To create the content for these websites, we employed a virtual work force of over 90 researchers in India and 30 writers and editors in the US.

This experience taught us how to manage a large workforce, train writers to improve content quality and motivate a large group of people. These skill sets will be critical in allowing Shoutmouth to grow the content of the site, as developed by both staff and members, while maintaining quality standards.

IV. Marketing Plan

Shoutmouth’s marketing plan includes the following:

Online Advertising : Shoutmouth will initiate pay-per-click advertising campaigns on Google and Yahoo! in order to inexpensively drive traffic to the site. Specifically, Shoutmouth believes it can drive qualified traffic to the site for 20 cents per visitor and achieve a 20% member conversion rate, thus generating members at a cost of $1.00 per member.

Keys to Shoutmouth’s success in achieving this metric include:

• Conducting thorough keyword research and advertising on appropriate keywords and keyword groups
• Creating advertising text that maximizes click through rates
• Creating landing pages that maximize conversions while maintaining the highest Google AdWords quality score possible
• Closely monitoring conversions to quickly stop and/or modify unprofitable campaigns
• Getting individuals to enter their email address to join the newsletter is much easier than getting them to join a site where they have to create a username, select a password, etc. As such, step one will be to get visitors to sign up for artist-specific newsletters.
• Once on the newsletter distribution list, members will constantly receive messages (embedded in their daily newsletter) regarding the benefits of participating more on Shoutmouth.
• Active Shoutmouth Membership: the constant reminders regarding Shoutmouth’s value proposition in the daily newsletters will influence members to participate more actively on the site (e.g., customize their profile, visit the site more often, etc.).

Invite-A-Friend : Shoutmouth is in the process of creating an aggressive invite-a-friend/member referral program. In doing so, we are following the lead of social movie community, Flixster, which grew to 5 million members within 10 months. It did this by encouraging members, during their initial registration process, to upload and send an invitation to multiple contacts in their email address books. The technology to develop this process is fairly complex and we expect to be completed with and to rollout this program in June 2007.

Direct Email Marketing : Shoutmouth will directly contact bloggers and prominent music fans we find online to tell them about Shoutmouth, encourage them to join, and encourage them to write about Shoutmouth on their blogs and online journals .

Creating/Distributing Buzzworthy/Viral Content : Shoutmouth plans to have several buzzworthy/viral articles (i.e., content that people would want to email to their friends since it is funny, interesting, etc.) on the site each day. With a single click, visitors will be able to send these articles to social bookmarking sites such as Digg.com or Fark.com, where these articles could receive widespread attention. In addition to our traditional news stories, Shoutmouth will also periodically create special reports/features in order to satisfy our members and visitors and to try to get widespread exposure.

An example of the power of such buzzworthy content, Shoutmouth has already succeeded in having two stories accepted by Fark and Digg, which have brought in over 50,000 unique visitors.

Super Fans/Street Team Development : Shoutmouth also plans to recruit “super fans.” Super fans are individuals who are passionate about a certain music artist/band and actively contribute articles and/or comments on Shoutmouth. We will recruit these fans, reward them with status (e.g., adding a gold Shoutmouth headphones image to their profile page) and encourage them to more aggressively promote the site by:

• Submitting more news to Shoutmouth
• Commenting on more articles on Shoutmouth
• Growing the Shoutmouth community around their favorite artist(s) by actively recruiting new members to join the site (such as actively posting Shoutmouth-related comments on their MySpace pages, on other music forums, etc.)

Public Relations : Upon financing, Shoutmouth will hire a public relations firm to help us get mentions in media sources ranging from magazines, newspapers, radio, television and blogs. To date, we have developed and issued press releases via Billboard Publicity Wire which have been syndicated throughout the web. An effective PR firm will enable Shoutmouth to quickly reach a wide audience.

Widgets : Shoutmouth will create artist-specific and genre-specific music news widgets. For example, our U2 widget (see example on right) would include all of the recent U2 articles published on Shoutmouth. The widget can easily be placed on MySpace pages, blogs, etc. Each story title in the widget links to the full article on Shoutmouth.

Shoutmouth has great expectations for our widget. To begin, no such widget currently exists as there is no one place to get comprehensive news for specific music artists. Secondly, each time someone places a Shoutmouth widget on their blog or social networking page, it will effectively market Shoutmouth to a wide audience at zero cost to us.

V. Technology/Site Development Plan

This section provides a brief roadmap of the initial and future functionality of Shoutmouth.

Initial Site Functionality

The initial Shoutmouth website will include the following features:

• Ability to submit and comment on news stories
• Ability to suggest new music artists to add to the site
• Ability to create user profiles
• Ability to receive customized news and email alerts
• Articles categorized by artist and core genre (e.g., Rock, Rap, Pop, etc.)
• Music artist sections which includes News, Bio and Fans

Future Site Functionality

Shoutmouth will use news and basic functionality as the platform though which we will build a thriving music community. After initial launch, the Shoutmouth technology team will work on incorporating additional features such as:

• Ability to message other members via the site (e.g., members will have an Inbox on the site)
• Event calendars: members will receive online calendars. With the click of a button, the member will be able to add tour dates of their favorite artists/bands to their calendar.
• Articles also categorized by sub-genre (e.g., Alternative Rock, West Coast Rap, etc.)
• Music artist sections to also include videos, audio files, photo galleries, reviews and event calendars to which members can upload files and vote on top content.
• Forums and member blogs
• Music compatibility testing (suggestions on song/artists members might like)
• Trivia quizzes
• Music playlists

VI. Financial Plan

Revenue Model

During the first six months, Shoutmouth will not generate any revenues as it will not sell advertising space nor offer products for sale. This decision has been made to spur the growth of the Shoutmouth community. By initially positioning Shoutmouth more as a non-profit, for-the-people-by-the-people venture, members will be more prone to promote the site and invite their friends than if the site looks too commercial.

Starting in September 2007, Shoutmouth will primarily generate revenues from selling advertising space. As technologies (such as the Snocap music widget) evolve that allow us to seamlessly integrate music sampling and purchasing on our site, sales of downloadable music are also expected to be a significant revenue source. To a lesser extent, we may sell other music-related items such as ringtones, concert tickets, and apparel.

Funding To Date

To date, Shoutmouth’s founders have invested $500,000 in Shoutmouth, with which we have accomplished the following:

• Built the site’s core technology
• Hired and trained our core staff (we currently maintain an 11-person full-time team)
• Populated the website with content (over 10,000 articles and 1,200 artist bios)
• Generated brand awareness among music fans, including driving 50,000 unique visitors in March, 100,000 unique visitors in April, and 200,000 unique visitors in May 2007.

Funding Requirements/Use of Funds

Shoutmouth is currently seeking $3 million to provide funding for the next 24 months. At this point, the site will be profitable and can grow organically, or additional capital may be sought to more aggressively expand our member base.

The capital will be used as follows:

• Execution of Marketing plan : in order for Shoutmouth to grow its visitor and member base, we need to invest dollars in online advertising and public relations. With regards to online advertising, we are confident that we can enroll members at a cost of $1 per member, which is a fraction of the value of the members to an acquirer (minimum $25 per member), thus providing a significant return on our marketing investments.
• Execution of Technology plan : in order to build a thriving community, Shoutmouth needs to offer its visitors a “stickier” website and enhanced features. We currently maintain a vast “wish list” of features, such as members uploading and rating pictures and videos, trivia quizzes, and member-to-member messaging, that will significantly improve the site’s functionality and value proposition.
• Staffing : In order to reach our goals, we will have to hire additional technical and operations personnel.

Financial Projections

Below is an overview of Shoutmouth’s Financial Projections for the next three years. Please see the Appendix for the full financial projections and key assumptions.

Exit Strategy / Valuation Metric

Shoutmouth’s most likely exit strategy is to be acquired by a traditional music website or property (e.g., Viacom/MTV, Ticketmaster, Rolling Stone), an entertainment/media conglomerate (e.g., Yahoo!, IAC/InterActiveCorp, NBC), or a large social networking site (e.g., News Corp/MySpace).

This strategy is supported by the significant M&A activity in the social networking market, which includes the following transactions over the past 24 months:

Regarding valuation, below are the estimated valuations of social networking companies on a per member basis upon exit:

• Del.icio.us: $50 – $100 per member
• MySpace: $25 per member
• Xing (business social network): $137 per member at IPO in 10/06
• Flickr: $56 – $130 per member
• Grouper: $130 per member

Based on this data, not only are social networking sites a promising investment, but sites that can acquire members for less than $25 each (a conservative valuation estimate based on the figures above), should earn a solid return on investment. As discussed above, Shoutmouth’s goal is to acquire members for no more than $1 each.

In addition, per the membership projections above, Shoutmouth’s valuation at the end of 2009, at a $25 valuation per member, is expected to be $239 million. A more conservative, using a 24.4 time EBITDA multiple (the average multiple of tech M&A deals in 2006 according to The M&A Advisor), yields a $121 million valuation in 2009.

Shoutmouth’s founding team includes entrepreneurs and managers with a track record of success and a history of successfully working together.

Management Team

DL, Co-Founder and CEO

D has a history of successfully launching and growing businesses of all sizes. As president and co-founder of an entrepreneurial services firm., D has personally assisted in the launch and development of over 100 ventures.

Over the past three years, D founded and has managed The Kisco Group which includes an affiliate marketing division (2006 revenues exceeded $3 million), a search engine optimization business which includes a network of 3,000 websites (2006 revenues exceeded $500,000) and an e-commerce business (which includes TopPayingKeywords.com and ShowerHeadsEtc.com).

D earned his Bachelors degree from the University of South Carolina.

PK, Co-Founder and Vice President of Operations

For the past two years, P has managed The Kisco Group’s search engine optimization business where he hired, trained and managed nearly 100 employees and a dozen outside firms. During this time, P has honed his management skills with regards to content development, marketing and operations.

P has had a passion for music since childhood and has been a semi-professional drummer for the past 15 years.

P earned his Bachelors of Arts degree, magna cum laude, from Clemson University.

PF, Co-Founder and Vice President of Technology

For the past year, P has managed The Kisco Group’s affiliate marketing business. In addition to setting up and managing widespread marketing campaigns, P has developed sophisticated analytic techniques to precisely analyze web traffic in order to optimize profitability.

Since August 2006, P has shifted his efforts and leveraged his technology skills in developing the Shoutmouth website. P has been instrumental in selecting the Content Management Platform upon which Shoutmouth is built, and finding and managing the technology team.

P earned his Bachelor of Arts degree from Swarthmore College.

AB, Marketing Manager

A’s background in music includes being a singer, songwriter, guitarist and producer. He has also worked on the marketing side of music, having marketed Veritas Records through the development and distribution of promotional materials.

A’s career also includes psychological research and administration, having served as a Research Assistant with the Interpersonal Perception And Communication Laboratory in Cambridge, MA.

A earned his Bachelor of Arts degree in Psychology from Ohio State University.

M, Lead Technology Developer

M is an experienced web programmer with expertise in web design, application development and database development among others.

M’s work experience includes serving as a Senior Developer at Spheres. M has also engaged in multiple, long term freelance projects including serving as a Database Developer Consultant with The Penn Group and a Web Developer Consultant with Volution Media Group and Allied Online Consulting Group.

M earned his Bachelors degree in Computer Science with a minor in Cognitive Science from Rutgers University.

Content Development Team

Shoutmouth’s writing team, managed by PK, includes the following members:

• JS, Editorial Manager: former content manager and copywriter for Scholastic Inc. and Promotions.com.
• TZ: former music intern (Virgin Records and WRRV) and author of the blog, The Tom Z Show .
• ML: former assistant editor for Adventure Publishing; author of the blog Certified Gangsta ; and former editor-in-chief of Fordham University’s newspaper The Paper .
• SB: former staff writer for Paste Magazine , The Clarion Ledger , and Nightclub and Bar Magazine among others.
• CSJ: former editorial intern for Rolling Stone and Editorial Assistant for Psychology Today .

Outsourced Technology Team

Shoutmouth works very closely with 2skies, a technology firm based in Australia with staff in Australia and the United States. 2skies is run by JDN, one of the co-founding developers of XE, the platform upon which Shoutmouth is built.

XE is an extensible, Open Source web application framework written in PHP and licensed under the GNU General Public License. XE delivers the requisite infrastructure and tools to create custom web applications that include fully dynamic multi-platform Content Management Solutions (CMS).

VIII. Appendix: Shoutmouth Financial Projections   3-Year Income Statement

3-Year Balance Sheet

As of December 31

3-Year Cash Flow Statement

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50 Innovation Examples: Exciting Innovative Ideas in Business

Published: 03 April, 2024

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In the Business environment, strategic innovation has taken centre stage as a fundamental catalyst for business success. The ever-changing market conditions and the swift progress of technology require companies to perpetually adjust and introduce innovation to stay ahead of the competition. Within this dynamic environment, the domain of innovation provides an expansive and limitless vista, offering a multitude of prospects that encompass the inception of fresh products and services and the crafting of digital business models . These prospects are virtually boundless, establishing innovation as a foundational element of business strategy .

In this article, we will explore some of the most captivating and inspiring innovations in business Examples spanning various industries. We delve into these case studies to gain a deeper understanding of their profound impact on the market, revealing the potential for innovation to reshape the business environment in remarkable ways.

What is Innovation in Business?

Innovation definition in business is the process through which an individual or organization embarks on creating entirely fresh products, processes, and concepts, or reimagining existing products, processes, and concepts in novel ways. it’s about reshaping how organizations operate, enhance value creation , and interact with stakeholders. 

Whether it involves the creation of novel products, enhancements to existing ones, advancements in technologies, or the establishment of business model innovation , an Innovation program becomes indispensable for fostering growth, maintaining competitive advantage, and driving social progress. Many businesses grapple with the challenge of innovating effectively in the absence of a well-defined plan. This underscores the critical importance of understanding the diverse types of innovation.

Exponentially Accelerating Change is a transformative concept that demands attention from organizations seeking to secure their future in a rapidly evolving landscape. This model emphasizes the urgency of incorporating innovation into the very fabric of  business strategy . Understanding the exponential nature of technological advancement is crucial for anticipating disruptions and staying ahead of the curve.  The ability to navigate and harness the potential of exponentially accelerating change can propel organizations into positions of industry leadership. In a world where staying relevant is synonymous with staying innovative, this model serves as a strategic guide for businesses to not only weather the waves of change but to ride them towards sustained success. You can download it now.

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Examples Of Exponentially Accelerating Change

Successful corporate innovative ideas examples .

In the corporate business world, success is often synonymous with innovation. It’s not merely about adopting innovation as a concept; it’s about orchestrating innovative ideas into masterpieces that define the very essence of success. As we delve deeper into the realms of corporate innovation and explore exemplary company innovation examples , we uncover the strategies and groundbreaking approaches these companies have employed, dissecting the components of their success symphonies. 

Beyond the surface, we’ll examine the intricate notes of innovation that have propelled these organizations to the summit of their respective industries, and how these companies have transformed the business environment, leaving an indelible mark on the melody of success.

Exploring new innovation ideas , these companies serve as beacons of inspiration in the realm of corporate innovation . From pioneering disruptive technologies to embracing incremental improvements, they showcase the diversity of approaches that contribute to the ever-evolving landscape of business success. These company innovation examples illuminate the path for others to follow, encouraging a culture where new innovative ideas are not only welcomed but celebrated.

Corporate innovation isn’t a one-size-fits-all concept. It’s a symphony where each company plays its unique melody of success. The resonance of their innovative ideas reverberates in the business world, inspiring others to harmonize their strategies and create their own successful symphonies. As we explore these company innovation examples , we witness the transformative power of embracing new innovation ideas , underscoring that the melody of success is ever-evolving and shaped by the continuous pursuit of innovation in all its forms.

Examples of Innovation in Business

In the dynamic landscape of business, the pursuit of innovation is a cornerstone for growth and adaptability. Companies that embrace innovation not only stay relevant in competitive markets but also often become trailblazers that set new industry standards. The essence of innovation lies in the ability to think differently, solve problems creatively, and continuously evolve. 

(1) Product Innovation Examples

Over millennia, humanity has witnessed remarkable product innovations that have endured through time. From the ancient wheel and Gutenberg’s printing press to modern marvels like the internet and cellular phones, these inventions have reshaped society, communication, and daily life. The bagless vacuum cleaner, a more recent addition, showcases ongoing advancements in convenience and efficiency. Each innovation stands as a testament to human ingenuity and progress, shaping the world we live in today.

Product innovation involves the development of a new product or the enhancement of an existing one, strategically crafted to address customers’ needs in a unique and innovative manner. 

Successful Innovative Products Examples include the introduction of electric cars, smart home technologies, or advancements in medical devices. The process of product innovation involves generating and exploring ideas that challenge the status quo, encouraging creativity and the discovery of solutions that have the potential to revolutionize industries and capture the imagination of consumers. It’s through these forward-thinking endeavours that product innovation truly comes to life, shaping the landscape of markets and paving the way for transformative advancements.

1) Apple Product Innovation:

Apple Company stands as a paramount example of product innovation , redefining the way people interact with mobile devices. Despite not being the initial creator of touchscreen devices, Apple’s distinctive edge lay in its meticulous attention to user interface (UI) and user experience (UX), creating devices that were not only accessible but also garnered a dedicated following. The introduction of the iPhone, with its seamless touch interface and intuitive design, set a new standard for the entire smartphone industry.

2) Ikea Product Innovation

Ikea the global furniture giant revolutionized the furniture industry by selling innovative products in a ‘flat-pack’ format. This not only improved the convenience and logistics of furniture purchasing but also positioned Ikea as the go-to brand for value furniture. Customers could now transport and assemble furniture easily, reducing costs and enhancing the overall customer experience. Ikea’s approach transformed the way people buy and assemble furniture, setting a benchmark for the industry.

3)Toyota Product Innovation

Toyota company renowned Japanese automotive manufacturer, has embraced a continuous improvement philosophy known as kaizen. Instead of pursuing risky radical transformations, Toyota focuses on core developments that compound over time. This approach has allowed Toyota to stay at the forefront of the automotive industry, introducing incremental innovations in manufacturing processes, fuel efficiency, and vehicle safety.

4) Tesla Product Innovation

Tesla’s impact on the automotive industry is profound, stemming from a combination of groundbreaking innovations. At the core of their success is the introduction of electric vehicles (EVs) that transcend traditional automotive norms. 

Tesla’s commitment to sustainability is evident in its battery technology, notably produced at the Gigafactory, which not only enhances the efficiency of EVs but also lowers overall production costs. The Supercharger network addresses EV charging concerns, providing a rapid charging infrastructure for long-distance travel. 

(2) Technological Innovation Examples

Technology Innovation is about creating or improving technologies for enhanced capabilities. It requires substantial investment in research and development, adaptability to market trends, and a focus on delivering value. Success hinges on effective management of intellectual property, talent, and partnerships.

Delivering value is the ultimate goal of technology innovation. Whether it’s enhancing efficiency, improving user experiences, or solving complex problems, innovative technology aims to make a positive impact. This focus on value creation is what drives the adoption of new technologies and positions them as drivers of progress.

1) Mobile Technology and Smartphones:

The advent of mobile technology, particularly smartphones, has revolutionized communication, entertainment, and productivity. Smartphones are not merely devices for making calls; they serve as portable computers with features like high-quality cameras, powerful processors, and a myriad of applications that have transformed how individuals access information and connect with the world.

2) Electric Vehicles (EVs) Technological Innovation

Electric Vehicles (EVs) stand as a pinnacle of technological innovation within the automotive sector, ushering in a transformative era for transportation. Key advancements in battery technology, notably the adoption of lithium-ion batteries, play a crucial role in extending driving ranges and minimizing charging times. Complementing these innovations are regenerative braking systems that enhance energy efficiency, and the integration of electric motors like Permanent Magnet Synchronous Motors, ensuring superior performance.

Battery Management Systems (BMS) emerge as critical components, actively monitoring and optimizing battery health to contribute to longevity. Beyond their electric prowess, EVs incorporate autonomous driving features and connectivity options, heightening safety and operational efficiency. The concerted efforts to establish a robust fast-charging infrastructure aim to further reduce charging times, while the incorporation of lightweight materials and aerodynamic design bolsters energy efficiency and overall range.

Adding another layer of sustainability, Vehicle-to-Grid (V2G) technology enables bidirectional energy flow, empowering EVs to contribute surplus energy back to the grid. These collective technological innovations position EVs not only as eco-friendly alternatives but also as efficient solutions that are reshaping the landscape of personal transportation for a sustainable future.

3) Information Technology (IT) Innovation

Innovative solutions continually redefine how businesses operate and interact with the digital realm. Here are two compelling examples that showcase the transformative power of innovation example :

Artificial Intelligence (AI):

AI involves the development of computer systems that can perform tasks that typically require human intelligence. Machine learning, a subset of AI, enables systems to learn and improve from experience. AI is applied in various domains, including natural language processing, image recognition, and autonomous systems. Companies use AI to enhance customer experiences, optimize operations, and drive innovation in products and services.

Internet of Things (IoT):

IoT refers to the interconnectivity of everyday devices, enabling them to send and receive data. This interconnected network allows for real-time monitoring, analysis, and control of devices. In the home, IoT devices include smart thermostats, security cameras, and wearable devices. In industries, IoT is used for predictive maintenance, supply chain optimization, and more.

Cloud Computing:

Cloud computing has transformed the way businesses store, process, and access data. Instead of relying on physical servers, cloud computing provides on-demand access to computing resources, allowing organizations to scale operations seamlessly. It has facilitated innovations such as Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). 

(3) Process Innovation Examples

Process Innovation involves creating and implementing new or improved processes with enhanced capabilities, functionalities, or efficiencies. It focuses on finding better ways to do things, offering useful improvements over previous methods.

1) Ford Assembly Line Process Innovation Examples

An example of process innovation is the Ford automated assembly line. In 1913, Henry Ford introduced the pioneering concept of an assembly line to enhance automobile production. Through innovative practices, Ford successfully slashed the time required to manufacture a car from 12 hours to an astonishingly efficient less than 2 hours.

Beyond the assembly line, Ford has continued to innovate, incorporating automation, advanced materials, and digital technologies into its manufacturing processes. These advancements have not only improved efficiency and product quality but have also allowed Ford to adapt to the evolving landscape of the automotive industry.

2) MBA Polymers Process Innovation Examples

MBA Polymers is an industry leader in plastic recycling, innovating through advanced sorting and separation technologies. Their automated systems efficiently extract high-quality plastics from complex waste streams, including electronic waste. This process results in recycled plastics with properties comparable to virgin materials, reducing environmental impact and promoting a circular economy. MBA Polymers’ continuous investment in research and development ensures ongoing improvement and adaptability to global waste challenges.

3) Starbucks Process Innovation Examples

Starbucks has revolutionized the coffee industry through pioneering process innovations that prioritize efficiency and customer satisfaction. Their commitment to a seamless and customer-centric ordering and fulfilment process stands out prominently. Leveraging cutting-edge digital technology, Starbucks has introduced mobile ordering systems, allowing customers to place orders and make payments conveniently through their smartphones. This not only streamlines the purchasing process but also enhances overall efficiency. 

Additionally, Starbucks has excelled in delivering personalized customer experiences, utilizing data insights to tailor recommendations and promotions. By integrating technology into every facet of its operations, Starbucks has not only set new industry standards but has also created a dynamic and engaging coffee shop environment for its customers.

(4) Business model innovation Examples

Business model innovation empowers companies to distinguish themselves from competitors through the provision of distinctive value propositions, exploration of uncharted market segments, or harnessing emerging technological advancements. You can download it now.

You can now access the complete Business Model Innovation Patterns Package, including a full presentation, related models and instructions for use.

The UNITE Business Model Innovation Patterns

This strategic approach not only facilitates the attainment of a competitive advantage but also ensures that businesses remain at the forefront of the market.

1) Airbnb Business Model Innovation

Airbnb’s impact on hospitality goes beyond its peer-to-peer model, relying on process innovations. User-generated reviews build trust, enhancing host accountability. “Instant Booking” streamlines reservations, catering to immediate needs. Safety initiatives like the Host Guarantee and dynamic pricing show commitment. Diversification with “Experiences” and “Airbnb Plus” enhances offerings. A community-centered approach fosters direct communication among hosts. Amidst COVID-19, the “Enhanced Clean” program addresses health concerns, showcasing Airbnb’s dedication to a unique, secure, and community-driven travel experience.

2) Spotify Business Model Innovation:

Spotify’s freemium model offers features such as personalized playlists and recommendations based on individual listening habits. This enhances the overall user experience and encourages users to explore premium features for an even more tailored and enjoyable music streaming experience.

It strategically expanded its content offering beyond music to include podcasts, diversifying its platform and attracting a broader audience. This move positions Spotify as a comprehensive audio streaming platform, showcasing business model innovation in content delivery.

3) Google (AdWords) Business Model Innovation:

AdWords revolutionized digital advertising with the introduction of keyword targeting, enabling advertisers to bid on specific keywords related to their products or services. This precision targeting ensures that ads reach users actively seeking relevant information, enhancing the effectiveness of advertising campaigns.

Google’s continuous innovation with AdWords includes the introduction of ad extensions. These extensions provide additional information such as contact details, location, and site links, elevating the visibility and impact of advertisements. This business model innovation caters to advertisers’ evolving needs for comprehensive and engaging ad formats.

4) AirAsia Business Model Innovation:

AirAsia’s innovative business model relies on diversifying revenue streams beyond ticket sales. Ancillary services, including in-flight meals, seat selection, and baggage fees, contribute significantly to the airline’s revenue. This à la carte approach enables AirAsia to maintain competitive base ticket prices while offering customers flexibility in choosing additional services.

AirAsia’s embrace of digital technologies for ticket sales, check-ins, and customer interactions represents a strategic business model innovation. This digital transformation enhances operational efficiency, reduces costs, and elevates the overall customer experience, showcasing AirAsia’s adaptability in the dynamic aviation industry.

(5) Social Innovation Examples

Social Innovation involves developing and implementing new ideas, strategies, and solutions that address societal challenges and improve the well-being of communities. It goes beyond traditional approaches, seeking novel ways to tackle social issues such as poverty, inequality, healthcare, and environmental sustainability. 

It often involves collaboration between various stakeholders, including governments, businesses, non-profits, and communities, to create a positive and lasting social impact. The focus is on finding innovative, sustainable, and inclusive solutions that address the root causes of social problems and lead to positive societal change.

1) Grameen Bank Social Innovation:

Founded by Muhammad Yunus in Bangladesh, the Grameen Bank pioneered the concept of microcredit in the 1970s. It extends small loans, often without requiring collateral, to impoverished individuals, particularly women, to support them in starting or expanding small businesses.

• Grameen Bank’s model emphasizes financial inclusion and social development, focusing on the empowerment of women as key drivers of economic growth.
• The program’s success in reducing poverty and empowering women has inspired similar microcredit initiatives worldwide, leading to the establishment of microfinance institutions across the globe.

2) Kiva Social Innovation:

Kiva is an online crowdfunding platform that connects individuals who want to lend money to entrepreneurs in developing countries who need microloans.

Borrowers on Kiva typically have small businesses or entrepreneurial endeavours, ranging from agriculture to small-scale manufacturing or retail.

Kiva’s innovative model allows people from around the world to make small contributions (as low as $25) to collective endeavours, creating a global community of lenders who support businesses in underserved areas.

3) Fair Trade Movement Social Innovation:

The Fair Trade movement promotes equitable trading relationships between consumers in developed countries and producers in developing nations.

Fair Trade standards ensure that producers, often small-scale farmers and artisans, receive fair compensation for their products. This fair pricing helps alleviate poverty and improve the quality of life in producer communities.

The movement also emphasizes sustainable and environmentally friendly practices, encouraging responsible agriculture and production methods.

4) Barefoot College Social Innovation:

Barefoot College’s social innovation extends beyond empowering women from marginalized rural communities to become solar engineers. The organization employs a unique model that emphasizes community-driven development and sustainability. It recognizes the significance of local knowledge and cultural context. The training provided not only equips women with the expertise to install and maintain solar panels but also emphasizes the integration of traditional wisdom and practices. This approach fosters a sense of ownership and self-reliance within the communities.

• Barefoot College’s commitment to sustainability is evident in its emphasis on renewable energy sources. By harnessing solar power, the organization addresses both the energy needs of rural villages and the environmental impact of traditional energy sources. This aligns with global efforts to promote clean energy solutions and mitigate the effects of climate change.
• The impact of Barefoot College extends beyond the immediate provision of clean energy. By empowering women in rural areas, the organization contributes to gender equality and women’s economic independence. Women trained as solar engineers not only play a crucial role in improving access to electricity but also become catalysts for broader community development.
• Barefoot College’s innovative approach has gained international recognition, serving as a model for empowering marginalized communities globally. Its emphasis on skill-building, sustainability, and community-led initiatives underscores the potential for social innovation to address pressing challenges and create positive, lasting change.

5) Mobile Money Services Social Innovation:

Mobile money services like M-Pesa in Kenya have transformed the way people in underserved communities access financial services.

These services enable users to send and receive money, make payments, and access basic banking functions through their mobile phones.

By reducing the reliance on physical banks, mobile money services have significantly increased financial inclusion, making it easier for people in remote or rural areas to manage their finances and access economic opportunities.

(6) Service Innovation  Examples

Service innovation involves the development and implementation of new and existing innovation ideas and solutions for improved services, with examples such as Netflix, Uber, and Amazon Prime showcasing innovative services that have transformed their respective industries. Innovative solutions address customer problems, enhance customer experiences, and improve the overall quality and value of services.

Netflix Service Innovation:

Netflix revolutionized the entertainment industry by providing a subscription-based streaming service, allowing users to watch a vast library of movies and TV shows on various devices, disrupting traditional cable and satellite television.

Uber Service Innovation:

• Uber transformed the transportation industry by introducing a convenient and efficient ride-sharing service through a mobile app. It changed the way people hail rides and significantly impacted traditional taxi services.
• Uber’s impact includes the gig economy transformation, creating flexible earning opportunities for drivers. The app’s integration of features like real-time tracking and cashless transactions further enhanced the overall ride-sharing experience.

Amazon Prime Service Innovation:

• Amazon Prime offers a subscription service that includes benefits like fast shipping, access to a vast library of movies and TV shows, and exclusive deals on Amazon’s e-commerce platform, providing a comprehensive package for customers.
• Amazon Prime’s innovative bundling of services not only boosts customer loyalty but also drives sales on the e-commerce platform. The inclusion of services like Prime Video and Prime Music adds significant value, creating a holistic and competitive membership program.

(7) Value Innovation Examples

Value innovation is about creating a unique value proposition . It involves creating new or improved products, services, or business models that deliver unique value to customers while simultaneously reducing costs. Here are some examples of value innovation:

1) Southwest Airlines Value Innovation:

Southwest Airlines pioneered the low-cost, no-frills model in the airline industry. By eliminating unnecessary services and focusing on efficiency, they provided affordable air travel, challenging the traditional airline business model.

2) Cirque du Soleil value innovation examples:

Cirque du Soleil redefined the entertainment industry by combining elements of circus arts with theatre. This innovative approach created a new form of live entertainment that appealed to a broad audience, distinguishing itself from traditional circuses.

3) Nintendo Wii:

Nintendo Wii introduced a motion-sensing gaming console that appealed to a broader demographic, including non-traditional gamers. This innovation expanded the gaming market by making gaming more interactive and accessible.

(8) Breakthrough Innovation Examples

Breakthrough innovation refers to an internal innovation within a company that propels a product, service, or strategy to a higher level. It not only expands the company’s presence into new markets but also fundamentally alters the dynamics of how customers engage with the market or industry. This transformative process, occurring within the company, often results in a significant shift in market perception and customer interaction.

1) SpaceX Breakthrough Innovation:

• SpaceX’s groundbreaking development of reusable rocket technology has not only significantly slashed the cost of space travel but has also ushered in a new era of sustainability in space exploration. By successfully landing and reusing rocket components, SpaceX has demonstrated the feasibility of cost-effective space missions. This breakthrough innovation not only has immediate financial implications but also fosters the potential for more frequent and ambitious space exploration missions, including those involving human spaceflight and interplanetary travel.

2) (IBM Watson) Breakthrough Innovation:

• IBM Watson has consistently pushed the boundaries of innovation across various industries. A standout breakthrough lies in its prowess in natural language processing, enabling it to comprehend and generate human-like text. In healthcare, Watson has played a pivotal role in medical research, drug discovery, and personalized medicine by analyzing vast datasets from clinical trials and patient records. 
• The financial sector has benefited from Watson’s capabilities in risk assessment and fraud detection, while its application in customer service, through virtual assistants and chatbots, has enhanced user interactions. Watson’s strength in data analytics has found applications in diverse fields, from marketing to supply chain optimization. 

3) Blockchain Technology Breakthrough Innovation:

• Recent breakthroughs in blockchain technology showcase a dynamic landscape marked by innovations addressing key challenges and expanding the technology’s potential applications. Scalability solutions, including layer-two protocols, are enhancing transaction throughput and alleviating congestion on major blockchains. Interoperability protocols are fostering a more interconnected blockchain ecosystem, enabling seamless communication between different networks.
• Smart contracts, a cornerstone of blockchain functionality, are evolving to become more secure, flexible, and applicable across diverse industries. Privacy and confidentiality features, leveraging advanced cryptographic techniques, facilitate private transactions and secure data sharing on public blockchains. Additionally, there’s a notable emphasis on improving the energy efficiency of blockchain networks, with a shift toward more sustainable consensus mechanisms. The tokenization of assets, encompassing real estate, art, and intellectual property, is gaining traction, providing a liquid and accessible representation of ownership. 
• The decentralized finance (DeFi) sector continues to flourish, reshaping traditional financial systems through blockchain-based lending, borrowing, and trading. These innovations collectively highlight the ongoing maturation and diversification of blockchain technology, with implications for industries far beyond its initial application in cryptocurrencies. For the latest developments, it’s advisable to refer to recent updates from the blockchain community.

(9)  Organizational Innovation Examples

Organizational Innovation entails creating and adopting new organizational structures, processes, and practices to enhance the efficiency, effectiveness, and sustainability of businesses. It involves reimagining conventional approaches, embracing emerging technologies and systems, and fostering a culture of innovation within the organization.

1) Morning Star’s Colleague Letter of Understanding (CLOU) Organizational Innovation:

• Decentralized Decision-Making: The CLOU at Morning Star facilitates decentralized decision-making, allowing employees to negotiate and define their roles, responsibilities, and performance expectations. This approach empowers individuals to take ownership of their work and contribute to the organization’s success.
• Flexibility and Adaptability: The absence of traditional managers encourages a culture of flexibility and adaptability. Employees can quickly adjust their roles and responsibilities based on changing priorities, fostering a dynamic and responsive work environment.
• Mutual Accountability: The CLOU promotes mutual accountability, as colleagues collaboratively define expectations for each other. This shared understanding of roles and responsibilities enhances communication and accountability at all levels of the organization.

2) W.L. Gore’s Lattice Organizational Innovation:

• Collaborative Environment: The lattice organizational structure at W.L. Gore promotes a collaborative and non-hierarchical environment. Employees, known as associates, are encouraged to collaborate across functions and departments, breaking down traditional silos.
• Project-Based Teams: The lattice structure allows employees to work on multiple projects simultaneously, contributing their skills to various initiatives within the company. This flexibility enhances creativity, knowledge sharing, and innovation.
• Flat Hierarchy: With minimal hierarchy, decision-making is distributed, and associates have the autonomy to make decisions within their areas of expertise. This flat organizational structure supports a culture of trust and empowerment.

Open Innovation vs Closed Innovation Examples

Continuous innovation vs discontinuous innovation examples, 4 types of innovation examples.

(1) Disruptive Innovation Examples

Disruptive innovation is the concept that the introduction of a product or service into an established industry when it outperforms or offers a more cost-effective solution than existing offerings has the potential to replace market leaders and fundamentally reshape the industry.

1) General Electric (GE) Disruptive Innovation 

General Electric (GE), founded in 1892, stands as a disruptive innovation company that has transformed various industries. Pioneering advancements such as the first Radio Corporation, electric motor technology, and lighting fixtures, GE’s innovations have reshaped communication, illumination, and travel. Renowned scientists like Thomas Edison and Michael Faraday played a crucial role in GE’s success, contributing to the electrified and modern world we know today.

• First Radio Corporation: GE played a pivotal role in the development of the first radio corporation, revolutionizing communication.
• Electric Motor Technology: GE’s advancements in electric motor technology had a profound impact on various applications, from industrial machinery to household appliances.
• Lighting Fixtures: GE’s innovations in lighting fixtures contributed to the widespread adoption of electric lighting, fundamentally changing the way we illuminate our world.
• Scientists like Thomas Edison and Michael Faraday were instrumental in GE’s success, contributing to the electrification of the modern world. GE’s innovations continue to shape modern society, laying the foundation for advancements in technology and infrastructure.

1- Blockbuster vs. Netflix:

• Convenience and Accessibility:

Netflix’s subscription-based model offered customers the convenience of renting and watching movies from the comfort of their homes without the need to visit a physical store. Although Blockbuster had its charm, the convenience of having DVDs delivered to your doorstep by Netflix disrupted the traditional “go to the store” approach.

And Netflix’s introduction of streaming further increased accessibility, allowing users to instantly watch content on various devices. Meanwhile, Blockbuster clung to the familiar routine of browsing physical aisles. The shift from brick-and-mortar to on-demand streaming was a blockbuster move by Netflix.

• Personalization:  Netflix utilized algorithms to analyze user preferences and provide personalized recommendations, enhancing the overall user experience. This level of personalization was a stark contrast to the more generic recommendations found in traditional video rental stores like Blockbuster. Netflix wasn’t just about movies; it was about a personalized blockbuster of entertainment tailored for you.
• Original Content Production:  Netflix’s shift into original content production, with series like “House of Cards” and “Stranger Things,” distinguished it from traditional video rental services. While Blockbuster relied on stocking the latest blockbusters, Netflix created its blockbuster content. This strategic move not only attracted new subscribers but also showcased Netflix’s commitment to being a blockbuster creator, not just a distributor.

3) Cryptocurrency Disruptive Innovation 

Cryptocurrency, utilizing decentralized blockchain technology, has disrupted the financial industry by offering faster transactions, lower fees, and enhanced security. This challenges traditional financial systems, enabling peer-to-peer transactions and empowering individuals to have greater control over their finances. Bitcoin, a prominent cryptocurrency, stands out for providing an alternative to traditional banking control, reshaping the dynamics of finance and the broader economy.

Despite the transformative potential, challenges like regulatory considerations and market volatility must be addressed for cryptocurrencies to fully realize their impact on the financial landscape.

(2) Radical Innovation Examples

Radical innovation is an invention that dismantles or replaces an established business model. Unlike architectural, incremental, or disruptive innovations, radical innovation entails a complete overhaul of existing systems and processes, replacing them with entirely new structures.

1) Electric and Autonomous Vehicles Radical Innovation (e.g., Tesla):

• The development of electric vehicles (EVs) and autonomous driving technology signifies a revolutionary shift in the automotive industry. Electric vehicles leverage electric power, reducing environmental impact and dependence on traditional fuel sources. Simultaneously, autonomous driving technology aims to enable vehicles to operate without direct human control, utilizing advanced sensors and artificial intelligence for navigation.
• Pioneering companies like Tesla have been instrumental in driving the widespread adoption of EVs. By combining cutting-edge electric vehicle technology with advancements in autonomous driving capabilities, Tesla challenges conventional transportation models. The impact extends beyond individual ownership, influencing discussions on shared mobility, urban planning, and the future of transportation. Tesla’s innovative approach has prompted other automakers to invest heavily in electric and autonomous technologies, shaping the industry’s trajectory toward a sustainable and autonomous future.

2) Robot-Assisted Surgery Radical Innovation (e.g., da Vinci Surgical System):

• Robot-assisted surgical systems, exemplified by the da Vinci Surgical System, utilize robotic technology to aid surgeons in performing minimally invasive procedures with heightened precision. These systems typically consist of robotic arms controlled by a console, offering surgeons a greater range of motion and enhanced visualization during surgeries.
• The innovation of robot-assisted surgery has transformed the landscape of medical procedures. By allowing for smaller incisions, reduced scarring, and improved surgical precision, these systems enhance patient outcomes and accelerate recovery times. The da Vinci Surgical System, in particular, has been employed in various surgical specialities, including urology, gynaecology, and cardiovascular surgery, demonstrating the versatility and positive impact of robotic assistance in the medical field.

3) CRISPR-Cas9 Radical Innovation :

• CRISPR-Cas9 technology, a continually evolving gene-editing tool, showcases ongoing advancements in precision and diverse applications. This revolutionary technology allows scientists to modify DNA sequences with unparalleled accuracy, offering promising avenues for treating genetic disorders, creating genetically modified organisms, and addressing agricultural challenges.
• Ongoing developments in CRISPR technology underscore its versatility and potential across various fields. In medicine, CRISPR holds promise for personalized therapies and treatments for genetic diseases. In agriculture, it enables the development of crops with desirable traits, contributing to food security. While the technology presents ethical considerations, its ongoing evolution continues to shape genetic research, therapeutic interventions, and the broader landscape of biotechnology.

(3) Incremental Innovation Examples

Incremental innovation involves making a series of small enhancements or upgrades to a company’s existing products, services, processes, or methods. The modifications introduced through incremental innovation typically concentrate on improving the development efficiency, productivity, and competitive differentiation of an existing product.

1) Smartphone Incremental Innovation:

The smartphone industry, known for its dynamic pace, consistently introduces incremental innovations through successive model releases. Each iteration serves as a stepping stone for technological advancement, ushering in improvements in crucial features such as camera quality, processing speed, and battery life. These enhancements not only meet the evolving demands of users but also contribute to the overall refinement of the user experience. From enhanced photography capability to faster processors and extended battery longevity, each iteration represents a strategic response to market trends and user expectations.

2) Software Applications Incremental Innovation:

Companies regularly engage in the practice of releasing incremental updates. These updates are pivotal in maintaining the integrity and functionality of the software by addressing bugs, refining performance, and introducing new features. The iterative nature of these improvements ensures that the software evolves to meet changing user needs and technological standards. Through ongoing updates, companies not only rectify issues but also optimize the user experience, fostering a dynamic and responsive relationship between the software and its users.

3) Automotive Incremental Innovation:

The automotive industry demonstrates a commitment to safety through the continual integration of incremental innovations in safety features. Technologies such as lane departure warnings, adaptive cruise control, and collision detection systems are systematically refined and seamlessly integrated into newer car models. This incremental approach allows manufacturers to enhance vehicle safety without compromising overall design or functionality. As these safety features evolve, they contribute to the industry’s collective goal of creating vehicles that provide not only efficient transportation but also prioritize the well-being of drivers, passengers, and pedestrians.

(4) Architectural Innovation Examples

Architectural innovation takes place when novel products or services leverage existing technology to establish new markets or attract consumers who had not previously considered purchasing that particular item.

1) Valve Corporation Architectural Innovation:

• Employee Autonomy: Valve’s flat structure empowers employees to choose projects based on their interests and expertise. This autonomy fosters a sense of ownership and accountability, encouraging innovation and creative problem-solving.
• Elimination of Traditional Hierarchy : Valve does not have traditional managers or hierarchies. This absence of bureaucracy promotes a more fluid and agile decision-making process, enabling the company to respond quickly to market opportunities.
• Fluid Project Teams: Employees at Valve can move freely between projects, forming dynamic and fluid teams. This promotes knowledge sharing, diverse skill development, and the ability to tackle projects with a fresh perspective.

2) DevOps Architectural Innovation:

• Integration of Development and Operations : DevOps breaks down silos between development and operations teams, fostering collaboration throughout the software development life cycle. This integration aims to improve communication, efficiency, and the overall quality of software releases.
• Automation : DevOps emphasizes the automation of manual processes, including code deployment, testing, and infrastructure management. Automation reduces the risk of errors, accelerates release cycles, and enhances overall system reliability.
• Continuous Integration and Continuous Delivery (CI/CD): DevOps practices promote a continuous integration and continuous delivery pipeline, allowing for the rapid and reliable release of software updates. This approach minimizes downtime and ensures a smoother user experience.

3) HubSpot’s Architectural Innovation:

• Content-Centric Approach : HubSpot’s Inbound Marketing methodology revolves around creating valuable content to attract, engage, and delight customers. This content-centric approach positions HubSpot as a thought leader in the industry and builds trust with its audience.
• Digital Channels and Analytics : Inbound marketing leverages digital channels such as blogs, social media, and email, combined with analytics tools to track user behaviour. This data-driven approach allows for targeted and personalized marketing strategies based on customer insights.
• Customer-Centric Strategy : The methodology places a strong emphasis on understanding and addressing the needs of the customer. By creating content that aligns with customer interests and challenges, HubSpot builds a customer-centric marketing strategy.

Conclusion 

Innovation, in its myriad forms, stands as the driving force behind the ever-evolving landscape of progress. The examples woven throughout this exploration unveil a rich tapestry of creativity, showcasing the profound impact of human ingenuity across diverse domains. From the transformative leaps of disruptive innovations by companies like Tesla and Walmart to the nuanced, iterative advancements seen in the smartphone and software industries, the spectrum of innovation is vast. Beyond technological marvels, the realm of organizational innovation paints a picture of companies like Morning Star and W.L. Gore, exemplifying how flexible structures and collaborative environments can redefine efficiency.

The dichotomy of open and closed innovation strategies emphasizes the strategic choices organizations make to propel themselves forward. As we delve into the dynamic interplay of continuous and discontinuous innovation, we recognize the need for both steady progression and paradigm-shifting leaps in our journey forward. The innovation journey, marked by resilience, adaptability, and creativity, remains an ever-unfolding narrative, with the promise of groundbreaking discoveries and societal transformations on the horizon.

Frequently Asked Questions 

1- what are some innovative ideas.

Innovation is the driving force behind progress, addressing societal needs and pushing the boundaries of what’s possible. Here’s a closer look at the innovative ideas highlighted:

• Elderly Care Robotics: The idea centres around leveraging robotics to revolutionize elderly care. These robotic companions not only assist with daily tasks but also serve as health monitors and sources of companionship. In an ageing population, this innovation tackles the challenges of elderly care, enhancing the well-being of seniors while easing the burden on caregivers.
• Sustainable Packaging Alternatives: The focus is on creating eco-friendly packaging solutions, replacing traditional plastics in the food and retail industries with biodegradable or reusable materials. Addressing environmental concerns, this idea responds to the urgent need for sustainable practices in consumer packaging, contributing to a greener future.
• Virtual Health Assistants : This idea involves implementing AI-driven virtual assistants dedicated to healthcare, offering personalized advice, and medication reminders, and facilitating connections with healthcare professionals. Bridging gaps in healthcare accessibility, this innovation promotes proactive health management and empowers individuals to take charge of their well-being.
• Blockchain for Supply Chain Transparency : The concept revolves around using blockchain to establish transparent and traceable supply chains, ensuring authenticity and ethical sourcing of products. Combating counterfeiting and promoting fair trade practices, this innovation responds to consumer demands for transparent and ethically produced goods.
• Community-Based Renewable Energy: This innovative idea centres on empowering communities through shared ownership of renewable energy projects, fostering local sustainability with solar or wind farms. Addressing energy challenges, this approach not only contributes to environmental conservation but also economically empowers communities.

2- How does organizational innovation impact efficiency?

Organizational innovation, particularly through practices like decentralized decision-making, flexibility, and mutual accountability, plays a pivotal role in enhancing efficiency within a company. Here’s a closer look at the impact and significance of these elements:

• Decentralized Decision-Making : By decentralizing decision-making, organizations empower employees to take ownership of their work. This not only expedites decision processes but also taps into the collective expertise of individuals throughout the organization. Streamlining decision-making enhances overall agility. In a rapidly changing business landscape, the ability to make informed decisions quickly is a key component of staying competitive.
• Flexibility and Adaptability : The absence of rigid hierarchies allows for a culture of flexibility and adaptability. In this environment, roles and responsibilities can be quickly adjusted to align with changing priorities or market dynamics. In a business landscape characterized by uncertainty and evolving consumer demands, a flexible organizational structure is crucial. It enables companies to respond swiftly to market shifts and stay ahead of the competition.
• Mutual Accountability: The promotion of mutual accountability ensures that colleagues collaboratively define expectations for each other. This shared understanding of roles and responsibilities enhances communication and accountability at all levels of the organization. Accountability is the bedrock of a high-performing organization. When every team member is accountable not only to their immediate superiors but also to their colleagues, it fosters a collaborative culture that propels efficiency.
• Dynamic Work Environment: Collectively, decentralized decision-making, flexibility, and mutual accountability contribute to the creation of a dynamic work environment. Teams can adapt quickly to changing circumstances and seize opportunities. A dynamic work environment is not just a response to change but a proactive stance toward innovation. It encourages experimentation, continuous improvement, and the ability to navigate complexity.

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Here is a free business plan sample for a startup.

If you're an aspiring entrepreneur with a groundbreaking idea for a startup but aren't sure how to turn that idea into a reality, you've landed on the perfect page.

In the content that follows, we will guide you through a comprehensive business plan tailored for startups.

As you might already be aware, a robust business plan is crucial for any startup's success, as it outlines your mission, objectives, and the roadmap to achieve them.

To streamline your planning process and get started on the right foot, you can utilize our startup business plan template. Our team of seasoned professionals is also available to review and refine your plan at no cost.

How to draft a great business plan for your startup venture?

A good business plan for a startup must reflect the unique challenges and opportunities that come with launching a new venture in the tech-driven and innovative market landscape.

To begin with, it is crucial to articulate a compelling executive summary that captures the essence of your startup. This includes outlining the problem you are solving, your solution, and the potential market opportunity, as illustrated in our startup business plan template .

Your business plan should clearly define your value proposition and business model. Identify your target customer segments, the channels through which you will reach them, and your revenue streams.

Market analysis is vital. It should encompass a thorough examination of market size, growth projections, competitive landscape, and customer needs. Highlight how your startup stands out in terms of innovation, technology, or business model.

Product or service development is at the heart of a startup. Describe your offering in detail, including its features, benefits, development stage, and any intellectual property or proprietary technology.

The operational plan for a startup often includes the roadmap for product development, the technology stack, partnerships, and logistics. It should also cover the team's composition, highlighting the experience and skills of key members.

Startups must emphasize their go-to-market strategy. This includes marketing tactics, user acquisition strategies, and scaling plans. Digital marketing, network effects, and growth hacking techniques are often crucial components.

Financial projections for a startup are typically more speculative than for established businesses. Include detailed assumptions, cash flow forecasts, funding requirements, and a clear path to profitability or next funding round.

Unlike traditional business plans, a startup business plan must address the fast-paced nature of the startup ecosystem, the need for agility, and the potential for pivoting the business model based on market feedback.

A well-crafted business plan will not only help you clarify your strategic direction but also serve as a tool to communicate with potential investors, partners, and employees.

Investors are particularly interested in the scalability of the business, the founding team's expertise, and the startup's potential for high returns.

By presenting a detailed and well-researched plan, you showcase your commitment to building a sustainable and successful startup.

To streamline the process and ensure you cover all critical aspects, consider using our startup business plan template .

A free example of business plan for a startup

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a startup .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market overview and projections.

The startup ecosystem is a dynamic and rapidly evolving sector with significant growth potential.

Recent evaluations place the global startup economy at over $3 trillion, a figure that continues to rise as new technologies and innovative business models emerge. In the United States alone, startups play a critical role in job creation and economic development, with Silicon Valley being a notable hub for tech innovation.

These statistics underscore the critical role startups have in driving forward technological advancements and economic growth.

Industry Trends

The startup landscape is characterized by several key trends that shape the future of business and technology.

Artificial Intelligence (AI) and Machine Learning (ML) are at the forefront, with startups leveraging these technologies to disrupt traditional industries and create new categories of products and services.

Blockchain technology is gaining traction beyond cryptocurrencies, offering solutions for secure and transparent transactions in various sectors.

The rise of the gig economy and remote work platforms reflects a shift in employment patterns, with startups often leading the way in offering flexible work arrangements.

Environmental sustainability has become a priority, with a surge in green startups focusing on renewable energy, waste reduction, and eco-friendly products.

Healthtech startups are revolutionizing healthcare by improving accessibility, personalization, and preventative care through technology.

These trends indicate a move towards more intelligent, decentralized, and sustainable business practices, driven by innovative startups.

Key Success Factors

For a startup to succeed, several factors are crucial.

Innovation is the cornerstone of any successful startup. Offering a unique product, service, or business model that addresses specific market needs can set a startup apart from the competition.

Scalability is essential, as a startup must be able to grow its operations and customer base without a corresponding increase in costs.

Access to capital is another critical factor, as startups need funding to develop their products and scale their businesses.

A talented and adaptable team is vital for navigating the challenges of a rapidly changing business environment.

Networking and partnerships can provide valuable resources, mentorship, and access to larger markets.

Lastly, a clear understanding of the target market and customer needs, along with an effective go-to-market strategy, is imperative for gaining traction and achieving long-term success.

The Project

Project presentation.

Our startup is dedicated to developing innovative software solutions for individuals and businesses seeking to optimize their workflows and increase productivity. Located in a tech hub with access to a pool of talented developers and entrepreneurs, our startup will offer a suite of applications and tools designed to streamline project management, enhance communication, and facilitate data analysis.

The focus will be on user-friendly interfaces, robust functionality, and seamless integration with existing systems to ensure a superior user experience.

This tech startup aspires to become a leader in the software industry, revolutionizing the way people and companies approach their daily tasks and long-term projects.

Value Proposition

The value proposition of our tech startup is centered on delivering cutting-edge software solutions that simplify complex processes and empower users to achieve their goals more efficiently.

Our commitment to innovation, user-centric design, and continuous improvement offers a competitive edge, while contributing to the productivity and success of our customers.

We are dedicated to fostering a culture of technological advancement where businesses and individuals can leverage our tools to overcome challenges and seize opportunities in the digital age.

Our startup aims to become a cornerstone in the tech community, providing indispensable software that enhances the capabilities of our users and drives forward the future of work.

Project Owner

The project owner is a seasoned software developer and entrepreneur with a keen insight into the evolving needs of the modern workforce.

With a background in computer science and a track record of successful project launches, he is determined to build a startup that distinguishes itself through innovation, reliability, and user satisfaction.

With a vision of transforming the landscape of productivity software, he is committed to delivering solutions that not only meet but exceed the expectations of users, while contributing to the efficiency of the global market.

His dedication to technological excellence and his passion for problem-solving make him the driving force behind this project, aiming to empower users with tools that unlock their full potential.

The Market Study

Market segments.

The market segments for this tech startup, which specializes in developing innovative health-tracking applications, are diverse and multifaceted.

Firstly, there is a significant segment of health-conscious individuals who actively seek out technology to monitor and improve their well-being.

Additionally, the market includes fitness enthusiasts and athletes who require precise data to optimize their training and performance.

Another important segment comprises patients with chronic conditions who need to track their health metrics regularly for better disease management.

Lastly, healthcare providers and wellness coaches can be a crucial segment as they may recommend the startup's applications to their clients for better health outcomes.

SWOT Analysis

A SWOT analysis of this health-tech startup reveals several key points.

Strengths include a strong technical foundation, innovative product features, and a user-friendly interface that appeals to a tech-savvy audience.

Weaknesses might encompass the challenge of gaining trust in a market with privacy concerns and the need for continuous investment in technology to stay ahead.

Opportunities can be found in the growing global emphasis on health and wellness, partnerships with health institutions, and the potential for international expansion.

Threats include rapid technological changes, the emergence of new competitors, and the potential for regulatory challenges as the health data industry evolves.

Competitor Analysis

Competitor analysis in the health-tech sector indicates a dynamic and competitive landscape.

Direct competitors include other startups developing health-tracking apps, as well as established tech companies expanding into the health and wellness space.

These entities compete on the basis of technological innovation, user engagement, data accuracy, and integration with other health services.

Key competitive advantages may include proprietary algorithms, partnerships with medical professionals, and a strong focus on user privacy and data security.

Understanding the competitive landscape is crucial for carving out a niche and ensuring the startup's offerings stand out in a crowded market.

Competitive Advantages

Our startup's competitive edge lies in our commitment to creating a seamless and engaging user experience.

We offer cutting-edge health-tracking features that are backed by scientific research, ensuring our users receive accurate and actionable insights.

Our dedication to privacy and data security sets us apart in an industry where users are increasingly concerned about their personal information.

Moreover, our ability to integrate with a wide range of health devices and services makes our application a central hub for our users' health management needs.

You can also read our articles about: - how to start a startup: a complete guide - the customer segments of a startup - the competition study for a startup

The Strategy

Development plan.

Our development plan for the tech startup spans over three years and is designed to establish us as a leader in innovative solutions.

In the first year, we will concentrate on product development and achieving a minimum viable product (MVP) to address market needs. We will also work on user acquisition and feedback to refine our offerings.

The second year will be focused on scaling our operations, enhancing our technology, and expanding our user base. We will seek to grow our team and secure strategic partnerships to bolster our market position.

In the third year, we aim to diversify our product line and explore international markets. We will also look into additional revenue streams and possibly prepare for a Series A funding round.

Throughout this period, we will prioritize innovation, user experience, and sustainable growth to adapt to the evolving tech landscape.

Business Model Canvas

The Business Model Canvas for our tech startup targets customers looking for cutting-edge technological solutions to their problems.

Our value proposition is centered around delivering user-friendly, efficient, and scalable tech products that solve real-world issues.

We will distribute our products through online platforms, leveraging key resources such as our development team's expertise and our technological infrastructure.

Key activities include continuous product development, market research, and customer support.

Our revenue streams will be generated from software subscriptions, service fees, and potentially, data analytics services. Our costs are mainly associated with product development, employee salaries, and marketing initiatives.

Access a complete and editable real Business Model Canvas in our startup plan template .

Marketing Strategy

Our marketing strategy is built on engagement and innovation.

We plan to connect with our target audience by showcasing the unique benefits of our technology and demonstrating how it can simplify their lives. Our strategy includes targeted online advertising, participation in tech expos, and webinars to educate potential users.

We will also establish partnerships with industry leaders to enhance our credibility and reach.

Additionally, we will leverage social media and tech influencers to amplify our message and create a buzz around our products.

Risk Policy

The risk policy for our tech startup is designed to mitigate risks associated with technology development, market competition, and cybersecurity.

We will adopt agile development practices to respond quickly to market changes and user feedback. We will also invest in robust cybersecurity measures to protect our data and that of our users.

Cost management will be prudent to ensure financial stability, and we will maintain a diversified customer base to reduce dependency on any single market.

Furthermore, we will secure appropriate insurance to cover operational and liability risks. Our focus is on delivering secure and reliable tech solutions while safeguarding our company's and customers' interests.

Why Our Project is Viable

We are committed to creating a tech startup that addresses pressing technological challenges faced by consumers and businesses alike.

With our focus on user-centric design, continuous innovation, and strategic growth, we believe we have the right formula to succeed in the competitive tech industry.

We are excited about the potential to drive technological advancements and make a positive impact on society through our solutions.

We remain flexible to pivot as needed and are enthusiastic about the future prospects of our tech startup.

You can also read our articles about: - the Business Model Canvas of a startup - the marketing strategy for a startup

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a startup and our financial plan for a startup .

Initial expenses for our tech startup include costs associated with software development, such as hiring skilled developers, purchasing necessary hardware and software licenses, securing cloud services for hosting and data storage, and investing in cybersecurity measures to protect our intellectual property. Additionally, we will allocate funds for legal fees to establish the company structure, patent applications, and compliance with data protection regulations. Brand creation and launching targeted marketing campaigns to reach our potential users are also part of the initial costs.

Our revenue assumptions are based on a comprehensive market analysis of the demand for innovative tech solutions in our niche, considering the rapid digital transformation and the need for efficient, user-friendly applications.

We anticipate a gradual increase in user acquisition, starting conservatively and expanding as the market becomes more aware of our unique value proposition and the effectiveness of our tech solutions.

The projected income statement outlines expected revenues from our software or service subscriptions, sales, or licensing fees, minus the costs of development, customer support, and operations (hosting, maintenance, updates), and other operating expenses (office space, marketing, salaries, etc.).

This results in a forecasted net profit that is essential for assessing the long-term viability and profitability of our tech startup.

The projected balance sheet will reflect assets specific to our business, such as intellectual property, software, hardware, and liabilities including debts and anticipated operational expenses.

It will provide a snapshot of the financial health of our tech startup at the end of each fiscal period.

Our projected cash flow statement will detail the inflows from customers and outflows for expenses and investments, enabling us to predict our financial needs at any given time. This is crucial for maintaining solvency and supporting growth initiatives.

The projected financing plan will outline the mix of equity, grants, and debt financing we intend to secure to fund our startup costs and fuel our growth.

The working capital requirement for our tech startup will be diligently managed to ensure we have the liquidity to support our day-to-day operations, including software development cycles, customer acquisition costs, and staff remunerations.

The break-even analysis will determine the level of sales or subscription volume required to cover all our costs, including initial investments, and begin generating profits.

It will signal the point at which our startup becomes self-sustaining.

Key performance indicators (KPIs) we will monitor include customer acquisition cost (CAC), lifetime value (LTV) of a customer, monthly recurring revenue (MRR), churn rate, and the burn rate of our capital. These metrics will provide insights into user engagement, revenue stability, and the efficiency of our financial management.

By tracking these indicators, we will be able to gauge the financial performance and overall success of our tech startup.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a startup .

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Le business plan d’une entreprise innovante

Le business plan est un outil indispensable pour les entreprises innovantes , car un p rojet innovan t nécessite la plupart du temps d’obtenir un financement pour couvrir les dépenses liées aux opérations de recherche et de développement prévues .

Pour plusieurs raisons, l’établissement du business plan d’une entreprise innovante est plus compliqué à effectuer qu’un business plan classique. Comme nous le verrons ci-dessous, les difficultés apparaissent surtout pour la réalisation de la partie financière du business plan.

Difficultés liées au business plan d’une entreprise innovante

Voici les principales difficultés rencontrées dans le cadre de la réalisation du business plan d’une entreprise innovante :

• Tout d’abord, c’est très compliqué d’appréhender correctement un nouveau marché ou un marché encore inexistant , les prévisions de chiffre d’affaires sont donc très complexés.

Face à ce problème, il convient de se baser sur une analyse poussée de la demande et rester prudent dans les estimations. Idéalement, il faut s’appuyer sur du concret, comme des volumes d’affaires prévues avec les futurs partenaires si vous parvenez à développer le produit.

• Ensuite, beaucoup d’entrepreneurs ne jugent pas correctement la date de  début de leur activité  et donc la date à laquelle ils commenceront à générer puis encaisser du chiffre d’affaires.  La phase de recherche et de développement est prévue à la base sur une période souvent trop courte .

Il faut toujours prévoir une marge de manœuvre pour prévenir le dépassement des délais au niveau de la recherche et du développement. Des imprévus interviennent souvent dans les opérations de recherche. Prévoir une marge de 25% de temps supplémentaire est plus prudent.

• Des éléments spécifiques, notamment fiscaux et sociaux, sont un peu compliqué à budgétiser pour l’entrepreneur non averti dans ces domaines. C’est par exemple le cas du crédit d’impôt recherche ou des avantages liés à la jeune entreprise innovante .

Nous évoquons ce point dans la seconde partie de cet article.

• Enfin, les business plan liés aux projet innovants ont toujours tendance à être trop optimistes .Persuadé d’avoir trouvé une idée révolutionnaire qui va cartonner, nous avons trop tendance à partir dans des projections déconnectées de la réalité.

Cette tendance n’est pas sans risque, car elle contribue à surestimer les capacités futures de l’entreprise à rembourser ses dettes. Il est important de partager ses hypothèses avec d’autres entrepreneurs et des professionnels. Si vous êtes dans un incubateur ou une pépinière liée à l’innovation, plusieurs personnes pourront vous donner des avis et partager leur expérience.

Spécificités liées au business plan d’une entreprise innovante

Nous allons aborder ici deux points essentiels liés au business plan d’une entreprise innovante : la partie rédactionnelle et la budgétisation d’éléments spécifiques aux entreprises innovantes.

Importance de la partie rédactionnelle du business plan

Dans tout business plan, la partie rédactionnelle est très importante pour donner au lecteur un bon aperçu du projet.

Lorsqu’il s’agit d’un projet innovant, il va falloir consacrer tout une partie à l’explication de l’idée innovante, de l’intérêt qu’elle peut susciter sur le marché, de sa différence avec l’existant,  des chances de réussite technique de l’opération et du succès commercial pouvant en résulter. C’est une partie cruciale pour convaincre les lecteurs du business plan.

La présentation de l’équipe est également importante : les compétences de ses membres doivent être en adéquation avec les difficultés à résoudre. Si vous avez une très bonne idée mais une équipe trop limitée pour la développer, un investisseur refusera de financer le projet.

Avantages fiscaux et sociaux liés à l’innovation

Les avantages fiscaux et sociaux constituent un plus pour l’entreprise mais le business plan doit à la base être conçu sans ces avantages afin de calculer le besoin exact de financement du projet et de sa rentabilité.

Ils doivent être incorporés dans un second temps si l’entreprise a de sérieuses chances d’en bénéficier. L’intervention d’un expert-comptable est recommandée sur ce point.

Les principaux dispositifs à incorporer sont les suivants :

• le crédit d’impôt recherche ,
• le crédit d’impôt innovation ,
• les avantages fiscaux et sociaux des jeunes entreprises innovantes .

Idéalement, nous vous conseillons de vous faire accompagner par un professionnel qui maîtrise les subtilités liées aux créations d’entreprises innovantes.

1 commentaire sur “Le business plan d’une entreprise innovante”

Les chances de réussite d une innovation sont plus fortes si elle supprime un problème existant ou marque une évolution. Il peut s avérer utile de procéder une enquête consommateurs en négatif car les gens sont plus capables d exprimer ce qui ne leur convient pas plutot que de se projeter dans le futur et réagir par rapport à une rupture technologique. Le facteur temps est certainement la variable la plus difficile à appréhender et il ne faut surtout pas négliger la résilience, la résistance au changement et la force des habitudes.

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Innovation strategy examples

We've used our innovation matrix tool to develop simple innovation strategy examples based on the activities run by Apple, Amazon, Samsung, Microsoft, IBM, and Google.

What is an innovation strategy?

How did we develop these examples.

• 5 innovation strategy examples from this guide.

An  innovation strategy  is a commitment to a common innovation mission and a  structured set of activities  which aim to support the future growth of the organization.

What does an innovation strategy actually look like?

No two innovation strategies are the same. But they should all, at the very least, outline the  goal of your organization’s innovation activities and the  key initiatives  that will help you achieve it.

Buy-in from stakeholders is essential . For this reason, good innovation strategies are  simple, clear,  and  easily understood  by everybody involved.

If everyone has the same map (and can read it), everyone  can be aligned on the destination without arguing about the directions .

5 innovation strategy examples from this guide

1. The innovation strategy of Microsoft

While incremental innovations have seen Microsoft thrive in recent years, the company has struggled to achieve radical innovation. That may soon change. These days, Microsoft’s innovation strategy involves going all in on R&D with the aim of advancing its position in a range of markets – including healthcare.

2. The innovation strategy of Google

Google’s innovation initiatives are all over the matrix, so it’s difficult to assign them just one innovation archetype. Its parent company, Alphabet, invests heavily in R&D, which indicates that it’s targeting disruptive, radical, and architectural innovation.

3. The innovation strategy of Apple

Apple used to outsource R&D initiatives, preferring instead to focus on product development. But these days, they’re developing competencies in-house through internal accelerators while also acquiring startups.

4. The innovation strategy of Samsung

Samsung’s strategy has traditionally been all about incremental innovation (its curved mobile phone screens are a prime example). The organization’s innovation action plan in recent years has been to diversify its portfolio. Its R&D arm is exploring AI, digital health, the Internet of Things, autonomous mobility, data-center infrastructure, security, privacy and more. Samsung also strategically invests in a range of external initiatives to co-create businesses.

5. The innovation strategy of Amazon

Having achieved the impossible feat that is keeping its startup culture while scaling up, innovation is ingrained in every part of Amazon’s culture – not just the R&D arm.

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Key takeaways – Autonomous Innovation Summit

CXO guide: winning in innovation with AI

How to run an AI-powered innovation sprint

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Must-Have Innovation Action Plan Templates with Examples and Samples

Taranjeet Singh

In the dynamic landscape of modern business, innovation isn't just a buzzword; it's a critical driving force behind growth and success. Picture this: You're seated at a strategy meeting, surrounded by enthusiastic minds, all brimming with ingenious ideas that could potentially reshape your company's future. The challenge lies in converting these innovative sparks into a structured action plan that propels your organization forward.

Enter the game-changer: Must-Have Innovation Action Plan Templates. These meticulously crafted templates serve as your strategic compass, guiding you through transforming innovative concepts into actionable steps.

Our Must-Have Technology Plan Templates will help you create a roadmap for your organization's technology needs so that you can achieve your business goals.  

What sets these templates apart is their adaptability – a crucial element in today's ever-evolving business environment. These templates offer diverse frameworks, from product development to process optimization, and are designed to align with your unique vision seamlessly.

Achieve unparalleled growth in the digital age through our Must-have Digital Transformation Plan Templates .

Furthermore, these innovation action plan templates are 100% customizable, allowing you to customize them according to your requirements. 

In this blog, we explore innovation frameworks, their significance and unveil the power of tailor-made solutions. 

Let's begin!

Template 1: Action Plan for Innovation Techniques Categories Analysis PPT Template

This concise and comprehensive one-page PPT presentation is an invaluable guide for businesses and individuals seeking to enhance their innovation strategies. This power-packed PPT encompasses a structured approach to innovation, divided into four meticulously crafted sections.

The Methodology section lays out a systematic framework, offering insights into innovation techniques. Users can explore methodologies such as design thinking, brainstorming, and SWOT analysis, enabling them to approach innovation challenges with a well-defined strategy.

Under the Product Selection segment, users gain access to a curated selection process that aids in identifying the most promising ideas for development. This step ensures that only the most viable concepts move forward in the innovation pipeline, optimizing resources and maximizing the potential for success.

The Product Designing portion delves into the creative aspect of innovation, guiding translating concepts into tangible and marketable products. Users can explore tips and strategies for prototyping, iteration, and user-centric design, ensuring their innovative ideas are brought to life effectively.

In the Marketing section, users are equipped with tactics to propel their innovative products into the market. From target audience analysis to branding and promotion strategies, this segment empowers users to position their products for maximum impact and resonance.

An innovative layout places the user's perspective at the forefront, with the left side featuring three distinct categories: Need Seekers, Market Readers, and Technology Drivers. It allows users to tailor their approach based on their business focus and strategic goals.

Download the PPT to witness a transformative innovation journey.

Download Now!

Achieve goals every quarter with our Quarterly Action Plan Templates .

Template 2: Product Innovation Strategy and Action Plan PPT Template

This impactful one-page presentation and a strategically designed workflow diagram equip you with a winning approach to thrive in competitive markets.

The PPT unfolds a strategic journey in five pivotal steps:

• Determine Organizational Objectives and Product Goals : Start by aligning your innovation efforts with overarching organizational goals. Identify key product objectives harmonizing with your business mission, setting a solid foundation for your innovation strategy.
• Understand Competitors and Customers : Dive deep into the competitive landscape and analyze your potential rivals. Simultaneously, gain valuable insights into your customers' needs, preferences, and pain points. This holistic understanding guides formulating an innovation strategy familiar to your target audience and market dynamics.
• Develop a Unique Value Proposition : Forge a compelling value proposition that sets your product apart. Craft a narrative encapsulating your innovation's distinct benefits, positioning your brand as a frontrunner in meeting customer demands.
• Create a Realistic Strategy with Timeline, Budget, and Team Allocation : Build a pragmatic innovation roadmap. Define clear milestones, allocate budgetary resources judiciously, and assemble a dedicated team with the expertise to execute the strategy effectively and ensures a seamless and efficient implementation process.
• Execute and Measure Success : Put your strategy into action, closely monitoring its progress. Regularly assess key performance indicators against the predetermined goals, fine-tuning your approach as needed. A significant highlight of the plan is transitioning existing consumers seamlessly into new products or features, reducing user downtime by an impressive XX%.

Download the PPT to embark on a transformative journey to revolutionize your product development and market leadership approach.

Template 3: Action Plan for Cross-Functional Product Teams PPT

Our one-page PowerPoint template provides

• a clear and concise overview of your project's progress,
• ensuring streamlined communication,
• effective delegation,
• successful goal attainment.

At the heart of this PPT lies a dynamic representation of your project's key components:

• Name of the Goal : Clearly stated at the top, your project's objective takes center stage, providing immediate context for all stakeholders involved.
• Number of Tasks Complete : Visualized through an intuitive bar percentage, track the completion of individual tasks, and gain insight into their status at a glance.
• Percent of Goal Complete : Another bar percentage dynamically showcases the overall progress towards achieving the set goal, aiding in real-time decision-making.

The template further extends into a detailed table that serves as your project's command center:

• Action : Each task is accompanied by a description of its activity, ensuring a comprehensive understanding of its purpose.
• Responsible : Assign specific team members to tasks, fostering accountability and promoting seamless collaboration.
• Start Date : Keep track of task initiation, enabling effective time management and progress assessment.
• Required Resources : Easily identify the resources needed for each task, minimizing delays and optimizing resource allocation.
• Status : A pie chart visualizes the task's current status, providing a holistic view of progress and bottlenecks.

With this template, you'll be equipped with a powerful tool that promotes clarity, accountability, and efficiency within your cross-functional product teams. Seamlessly manage tasks, allocate resources, and monitor progress while maintaining a concise and informative overview. Download the PPT and pave the way for successful project execution!

Innovation is the heartbeat of progress, and with these Innovation Action Plan Templates at your disposal, you hold the key to unlocking unprecedented growth. By harnessing the power of these customizable templates, you're poised to transform visionary concepts into tangible achievements. Embrace the future confidently, armed with strategic blueprints that transcend boundaries and redefine success. Your journey towards innovation begins now – carve your path and pioneer change like never before.

FAQs on Innovation Action Plan

How do you write an innovation plan.

To craft an effective innovation plan, follow these steps:

• Assessment : Understand current challenges, market trends, and competitor landscape.
• Goal Setting : Define clear objectives and align them with business strategy.
• Idea Generation : Encourage brainstorming, idea-sharing platforms, and cross-functional collaboration.
• Idea Selection : Evaluate ideas based on feasibility, potential impact, and goal alignment.
• Resource Allocation : Allocate budget, time, and personnel for implementation.
• Prototyping : Develop prototypes or concepts for testing and refinement.
• Testing : Assess prototypes through pilot programs or simulations, gathering feedback.
• Iterative Refinement : Continuously improve based on feedback and data.
• Implementation : Execute chosen ideas with well-defined project management.
• Measurement : Establish key performance indicators (KPIs) to track success.
• Communication : Regularly update stakeholders on progress and outcomes.

What is an innovation action?

An innovation action is a strategic endeavor to introduce novel ideas, processes, or technologies to drive positive change and advancement. It involves creatively addressing challenges, improving existing systems, or inventing new solutions, fostering progress and competitiveness across various fields. By fostering ingenuity and experimentation, innovation actions contribute to societal and economic development, encouraging growth and transformation in both established industries and emerging sectors.

What are the 4 types of innovation strategies?

The four types of innovation strategies are incremental, disruptive, architectural, and radical. Incremental innovation involves gradual improvements to existing products or processes. Disruptive innovation creates new markets by introducing simpler or more affordable solutions. Architectural innovation reconfigures existing components to create novel systems or products. Radical innovation entails groundbreaking advancements, often leading to entirely new industries. Each strategy offers distinct benefits and challenges, shaping how organizations approach innovation. By diversifying their approaches, businesses can balance short-term gains with long-term transformative potential, ensuring sustained growth and competitiveness in dynamic markets.

What is an innovation plan?

An innovation plan is a strategic roadmap that outlines a systematic approach for generating novel ideas, implementing creative solutions, and fostering organizational advancements. It encompasses a structured framework to identify areas of improvement, drive research and development, and introduce groundbreaking products, services, or processes. An effective innovation plan includes clear objectives, resource allocation, timelines, and metrics to measure progress and success. It encourages a culture of continuous learning, experimentation, and adaptation, aiming to stay competitive, address evolving customer needs, and drive growth. By fostering a collaborative environment and aligning innovation efforts with business goals, an innovation plan empowers companies to stay at the forefront of their industry and navigate ever-changing markets.

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• Is Your Business Really Growing? Top 7 Business Metrics That’ll Prove You Right Or Wrong
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• [Updated 2023] Top 20 Innovation Strategy Templates to Churn Out Remarkable Products

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Drift-RFT won the Holloway Competition finals on May 8. Pictured (L to R) Riley Desmarais, Kara Wittmann, Cameron Vose, and  William Moore.

A team specializing in engineering and business earned the $15,000 grand prize at the 36th Paul J. Holloway Prize Innovation to Market Competition . 

Drift-RMT emerged victorious following an impressive final round on May 8, where six teams of student entrepreneurs from across the University System of New Hampshire (USNH) pitched their business plans to a panel of esteemed alums and industry-leading judges.  

Drift-RMT is a renewable ocean data collection device that uses wave motion for self-sustaining power. The team included Kara Wittmann, Riley Desmarais and William Moore from the College of Engineering and Physical Sciences, and Paul College student Cameron Vose. 

Ocean surface drifters collect data for climate modeling, severe weather prediction and ocean navigation. Traditional drifters last about 18 months, but many die sooner. The Drift-RMT drifter is projected to last 4-6 years and tackles the issue of marine pollution from its battery-operated counterparts. 

The Drift-RMT team will now focus on the Marine Energy Collegiate Competition (MECC) in Portland, Oregon at the end of May.     

Second Place 

The Trim-Able accessible nail trimmer took home the $10,000 second-place prize. 

Trim-Able is the world’s first Bluetooth automatic nail trimmer designed to help people who have difficulty using standard nail trimmers. Trim-Able was created by Kyle Dimick of Plymouth State University. 

Third Place 

Info-P earned the $5,000 third-place prize. Info-P is a revolutionary urinary tract infection detection solution providing continuous, accurate patient data to save healthcare facilities time and money.  

The Info-P team featured UNH nursing students David Brown, Sophie Grondin, Cecilia Robison and Matthew Harry from the College of Health and Human Services. 

In addition to earning third place, Info-P won the inaugural New Hampshire Impact Award. The award recognizes ventures, regardless of where they place in the competition, that would significantly impact the New Hampshire community and economy if successfully launched. 

Runner-Up Teams 

The three runner-up teams, each earning $1,000, were: 

• Centrip : An online platform that provides a centralized location for study abroad necessities, prioritizing organization, connection and affordability through various features. The team included Paul College students Avery Langone, Emmett Roy, Alexander Cruz and Axel Barretto. 
• Rose Beauty : A skincare product that provides skin protection against blue light digital exposure while offering a pampering yet convenient experience for women in their 20s and 30s. The team included Paul College students Allison Ivers, Gianna Salvi, Alexandra Bonadies and Delaney Cunningham. Rose Beauty was the People’s Choice Award Winner, earning the team an additional $2,000. 
• The After Grad Pad : A platform designed to seamlessly ease the transition from university housing to city renting for graduating college seniors. Paul College student Brandon Murphy created the platform. 

Named in honor of Paul J. Holloway, an accomplished business leader and successful entrepreneur, the Holloway competition is USNH's premier business plan competition for undergraduate and graduate students. 

Students from UNH, Plymouth State University and Keene State College are invited every year to compete for cash prizes totaling $40,000.

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