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Startup Business Plan Template for Word, PDF

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Template Highlights

• There are ten sections, including the executive summary, introduction to your company, a market analysis, the problem you want to solve, your innovative/disruptive/other -ive word solution, who's on your team, the sales & marketing strategy, your financial plan, your implementation plan, a conclusion, and any additional resources
• The instructions are specific and easy to follow, so all you have to do is fill in the blanks. Bonus: thinking about these things will prepare you for meetings with potential investors, customers, and employees as well
• Some of the sections don't apply to your startup? Delete 'em. Want to add a section that's not there? Add it. You can even customize the branding and color scheme
• Download it as a PDF or Word file
• Print it, email it, send it to your parents so they can frame it

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Startup Business Plan Template

The term “startup” has become a familiar part of the business lexicon and is often used to describe fast-growing, entrepreneur-led companies in the technology sector. Actually, a startup is any business enterprise that has recently been established. If you are in the early stages of starting a business, one of the first steps you will need to take is to create a business plan.

This simple template was designed to help someone new to the business world to easily put together a professional plan describing a new venture. Keep your startup plan short. As your business matures, you can adapt the plan to include additional detail.

You can create different iterations of it for different audiences. The bank will want more financial information, but a new employee might be more interested in your company’s mission statement and your plan for selling the product or service.

Executive Summary

An executive summary is a crucial part of any business plan. It should come first in your document. The executive summary gives the reader, who may be a very busy bank executive, a chance to understand your business in a quick, one-page read.

In no more than a short paragraph for each point, summarize the sections of your business plan:

• Give your elevator pitch and briefly describe your company

• Summarize the market research you have done

• Present the problem you are aiming to solve

• Describe how your product or service solves the problem

• Introduce key management

• Provide a synopsis of your sales and marketing plan

• Explain your financial plan

Close your executive summary with a clear explanation of your project, why it is needed, and how it will benefit future customers and investors.

HubSpot Tip: Write this section last, after you have written all of the other sections. It should summarize your entire business plan in about a page.

About the Company

Describe what makes your company different. This section should convince readers that your business idea is important and that the product or service that you will offer is needed.

Present your company’s name, location, type of business, ownership, and significant assets.

Describe your company’s mission: What is your reason for existence? Describe the values on which you are founding the company.

List the company’s goals and objectives and explain how you fit into the industry.

HubSpot Tip: Keep this section brief. The remainder of the document allows space for you to go into more detail about your business.

Market Analysis

Before writing your business plan, you need to conduct research on the market and industry you are planning to enter. Based on that research, you should describe your industry, the opportunities it offers, and the growth it is experiencing.

Describe the key environmental trends in your industry. What are the barriers to entry (e.g., high production or marketing costs, tariff barriers, regulatory challenges, extensive training)? How is the industry progressing? What is changing?

You should also define your target customers. Who will buy your product or service?

Who are your major competitors? Identify and describe them.

Identify what defines your product or service in the marketplace. What distinctive competencies or offerings do you provide that other companies do not?

HubSpot Tip: Note the key factors for success in this industry, and focus on proving that your company has them.

The Problem

Describe the need in the market that your business idea will fill. How did this need arise and why has it not been filled yet? Explain how you identified the need and how your product or service will meet it.

HubSpot Tip: Keep this section short, as the focus should be on your solution, which you will describe in the next part of the business plan.

Our Solution

Describe the products or services your business will provide. Include your value proposition - describe how your service/product is attractive to customers.

You should also include a description of the features and benefits of your product or service to your customer. Consider capturing this in a simple table like the one below.

Product/Service Feature

Benefit to the Customer

HubSpot Tip: You can include photos or brochures of your products, but consider putting them in an appendix so that they do not interrupt the message in your narrative.

Organizational Structure

Since your company is just starting, it is likely that you do not have many people on your staff. Describe the key operations and management roles in your company, and provide brief biographical sketches of your leadership. The aim is to show to readers that your team has the skills and qualifications to implement what you have outlined in the business plan.

If you receive advice from a board of directors or any high-level external advisors, mention them in this section.

HubSpot Tip: The biographical sketches should include the educational credentials, relevant experience, and related accomplishments of your leaders. Consider personalizing your plan by including headshots of your staff.

Sales and Marketing Strategy

In this section, you should describe how you will promote your new product or service. Begin by identifying challenges with entering the market and explain how you will overcome them. You can use a table like the one below to outline the barriers and your solutions.

Market Barrier/Challenge

Justify the following choices you have made:

• Location – Does it bring cost savings? Is it close to your customer base?

• Pricing Strategy – How will it entice customers to buy your products or services? How will it lead to profits for your business and investors?

• Promotion Plan - Will you use print, radio, television, or social media? Will you hire a marketing manager?

Note the budget for your marketing strategy and tell the reader how you will obtain the funding for this important aspect of your business. If you plan to use consultants or an advertising agency, include these costs in your budget.

HubSpot Tip: Consider including a few mockups of your company’s logos, branding, or marketing materials in an appendix.

Financial Plan

Describe the cost structure and financial aspects of the business. Explain the kind and amount of investment that you need, what you will use the money for, and how you envision your business becoming profitable.

To give readers a peek into your company’s projected financial future, you should include as much of the following financial information as possible. Remember, your business plan is a living document, so even if you do not have all of this information at the startup stage, you can add it as your business matures.

• Cash flow projection – An estimate of how much money you expect to flow in and out of your business.

• Capitalization plan – Lists the sources and uses of capital that your business plans to amass.

• Break-even analysis – A determination of what you need to sell in order to cover the costs of doing business.

• Income statement – Also known as a profit and loss statement (P&L), it shows the company’s revenues and expenses over a period of time.

• Balance sheet – A statement of the assets, liabilities, and capital of a business at a point in time.

Financial documentation is often long, so you should reference them here and include copies in an appendix.

HubSpot Tip: Not everyone is an expert in finance, but it plays an important role in starting a business. Unless you have an accounting background, consider seeking assistance on this section of your plan.

Implementation Plan

Tell the reader how you will implement your business plan. Consider including a timeline like the one below to illustrate the steps in the process to getting your business up and running. Customize it with your dates and the specific steps you will take.

HubSpot Tip: Set reasonable deadlines that you are able to meet, but that show your initiative and eagerness to realize your new venture.

In a few sentences, summarize the main point that you would like the reader to understand about your business. This can vary based on the target audience. For example, if you are presenting your plan to a bank to ask for a loan, this section should focus on your financial viability and why the bank should choose to finance your business.

Describe the next steps, and provide detailed contact information so that the reader can get in touch with you easily.

HubSpot Tip: Your conclusion should incite the reader to act. Make it easy for them by including all of the information they need to move forward.

Want to provide additional detail but need to avoid making your business plan too long? You can insert documents in the Appendices and reference them in the text. In this way, you can provide more information without breaking up the flow of your business plan text.

HubSpot Tip: Consider including examples of your marketing materials, a map of the business location, background research, images of your products, resumes of company leaders, or financial documents in the appendices of your business plan.

Frequently Asked Questions

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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.

• 212 best farm names

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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• Marketing strategies : Take note of how they attract customers using social media ads, search engines, and other platforms.

Step 4. How to Write An eCommerce Business Plan

• How you came up with the ecommerce business idea
• The problem the new online business solves
• Why your ecommerce business idea is the solution
• A detailed overview of the ecommerce space and how you’ll fit into it
• Your organizational structure
• How the e-business will operate
• How you will drive traffic to the website and guide people along the customer journey
• Your progress as an ecommerce entrepreneur
• Your budget and what you’ll spend it on
• Your funding needs, how you’ll get them, and what you’ll spend any borrowed money on

Step 5. Choosing An eCommerce Name and Logo

• Registration
• Domain name (the home page of your ecommerce website)
• Social media accounts
• eCommerce marketing

Step 6. How to Register Your E-Commerce Services

Limited Liability Company

• Amazon ecommerce : Use Sell on Amazon to get your online ecommerce business on the largest ecommerce website.
• Woocommerce : If you have used WordPress before, you might find Woocommerce the easiest place to create your own website.
• Shopify : Shopify is one of the easiest-to-use online store platforms on the market.
• SquareSpace : Squarespace is another operator owned platform.

• Offer Online Customers similar results.
• Manage customer expectations.

Step 9. Begin eCommerce Site Marketing

• Social media organic marketing
• Search engine optimization (SEO)
• Email marketing
• Influencer marketing
• Content creation
• Public relations

• Use keyword research tools like Ahrefs Google Trends, or Keyword Surfer . 
• Drive your content strategy with keywords .
• Specify metadata for pictures and websites. Moz has a great article on this.
• Limit each product page’s size to less than 2 MB.
• Limit load time to less than 3 seconds.
• Save the email in a database.
• Send the customer automated and personalized emails routinely.  
• Track results using analytics.

• Reach out to potential influencers.
• Offer them free products.
• Pay a fee for sharing your eCommerce products.
• Use analytics to monitor posts.

How Much Does It Cost To Start An Ecommerce Business?

• Open a store on Shopify
• Select a print-on-demand company. (I find Printful easy to use.)
• Budget for social media marketing of less than $500/mo.

How To Get Funding For An E-Commerce Site

• Personal funds, savings, 401K loans
• Loans from family or friends
• Crowdfunding  
• Credit cards
• Business loans
• Home equity loans
• Rollover for business startups (ROBS) . (similar to 401K loans, but with different requirements)

How Do I Start an eCommerce Business With No Money?

How many ecommerce stores are there, how many ecommerce businesses fail.

Major Ecommerce Players

• Amazon : $156.4 billion revenue and $10.8 billion profit
• Walmart : $33.4 billion revenue and nearly $2 billion profit
• Apple : $31.3 billion revenue and $5.3 billion profit
• Ebay : $5.5 billion revenue and $376.9 million profit

Ecommerce Industry Information

• Internet Merchants Association
• Internet Society
• US Census Bureau

Software for E-Commerce Companies

• Klaviyo : Email and SMS marketing automation platform
• Helium 10 : Useful software for Amazon FBA and Walmart sellers 
• Jungle Scout : Resources and data for Amazon sellers
• QuickBooks : Financial management software for all types of small businesses
• Shopify : Leading eCommerce platform
• WordPress : Free website building and hosting platform ideal for eCommerce businesses

15 Most Profitable Franchises To Buy

For many budding business owners, buying a franchise is a no-brainer. That’s because the best franchises to buy have high profit margins and low failure rates.

Entering a franchise agreement helps your business get to financial stability quicker. For instance, Hilton Hotel franchises benefit from a loyal customer base, a recognizable brand, and a proven business model that helps you skip the shaky time when most new businesses fail. Multiple hotels under the Hilton name have less than a 1% failure rate.

Sure, you’ll have high initial investments and have to pay ongoing fees. But that is a small price to pay given that the most successful franchises are 63.3% more likely to succeed than the average small business during a three-year period.

[su_note note_color="#dbeafc"]We’ll discuss the most profitable franchise opportunities to help you choose one. Click on any of the links to jump straight to one of the best franchises to own, or read on.

Are franchises profitable?

What is the most profitable franchise to own, what are the most profitable franchises to own, factors that impact franchise owners’ success, how to measure franchise profitability.

• Are you ready to become a franchise owner? [/su_note]

Yes, franchises can be profitable. According to Sculpture Hospitality , franchisees can expect to have 4% to 12% profit margins within a few years of opening a new franchise.

Profitability will depend on the franchise, investment costs, location, and managerial experience of the franchisee.

Yes, franchises can be more successful than other small businesses

Earlier, we told you the most successful franchises are 66.3% more likely to succeed than the average small business. Here’s how we figured that:

• Franchise failure rate over 3 years (top 100) : Under 2%
• Small business failure rate over 3 years : 40%

That means 98% of the top 100 franchises survive a three-year period, compared to 60% of businesses overall. Do a little more math (98% divided by 60%), and you’ll find that a top-100 franchise has a 63.3% higher probability of surviving three years.

The most profitable franchise to own is Express Employment Professionals, a staffing agency. We’ll dive further into Express Employment Professionals, how we arrived at this conclusion, and the rest of the most profitable franchises below.

The most profitable franchises as measured by the time it takes to make the initial investment back are:

• Express Employment Professionals
• Chick-Fil-A
• Ace Hardware
• Matco Tools

Author’s Note: Our Methodology

We spent a lot of time debating the best way to establish the most profitable franchises.

The absolute best way to establish the most profitable franchise businesses is to review Franchise Disclosure Documents and establish the profit margins for over 2,000 franchises. Unfortunately, that requires a ton of labor (or an amazing web crawler), so we went with the next best viable option.

We found an Insider Monkey report that ranked the top 10 most profitable franchises. It provides annual sales numbers and maximum initial costs. We took that information and went a couple of steps further.

We divided the average annual sales by the number of franchises to find the annual revenue per franchise. This allowed us to determine the average monthly revenue per franchise. Then we divided the high end of the estimated franchise cost by the average monthly revenue to find the “time to return,” or time to recoup the initial franchise cost.

It’s not as precise a method as we would like for the most profitable franchises, but it gives you a good idea of the franchises that will pay for themselves quickly.

#1. Express Employment Professionals

• Number of Franchises: 860 • Average Monthly Revenue: $4,837,209 • Maximum Initial Cost: $400,000 • Time to Return: Less than 1 month

Though Express Employment Professionals is one of the lesser-known names on the list, this staffing agency has been in business for over 40 years.

Once fully operational, the average franchise could cover its initial costs within the first month. That’s hard—nay, impossible—to beat.

• Number of Franchises: 9,175 • Average Monthly Revenue: $1,758,038 • Maximum Initial Cost: $239,500 • Time to Return: Less than 2 months

RE/MAX is the only real estate franchise on this list. This is one of the best franchises in the real estate market, with each RE/MAX real estate agent averaging 13.3 transactions per year.

#3. Wendy's

• Number of Franchises: 6,949 • Average Monthly Revenue: $1,798,820 • Maximum Initial Cost: $698,500 • Time to Return: Less than 5 months

Wendy’s franchises have the shortest time to return of any fast food industry franchise on the list. The brand recognition will help drive net profits, and many franchisees own multiple stores.

#4. Chick-Fil-A

• Number of Franchises: 2,928 • Average Monthly Revenue: $5,836,74 9 • Maximum Initial Cost: $2,803,435 • Time to Return: Less than 6 months

Chick-Fil-A s are some of the best franchises to own because they bring in massive revenue. With less than six months from opening to reach profitability, most franchises will be highly successful. 

They are closed on Sundays and require Christian values, which may exclude some people looking to buy a franchise.

#5. Ace Hardware

• Number of Franchises: 5,555 • Average Monthly Revenue: $4,028,80 3 • Maximum Initial Cost: $1,913,000 • Time to Return: Less than 6 months

Ace Hardware is another one of the best franchises to own. With 5,555 stores and average sales of $4 million per year, it can take six months for this franchise to recoup its initial investment.

#6. UPS Store

• Number of Franchises: 5,465 • Average Monthly Revenue: $631,290 • Maximum Initial Cost: $476,993 • Time to Return: Less than 10 months

The UPS Store is one of the best franchises to open. It consistently ranks in the Entrepreneur Top 10 franchises list, and the average revenue indicates that the franchise requires about 10 months to earn back the initial investment.

#7. Matco Tools

• Number of Franchises: 1,937 • Average Monthly Revenue: $400,103 • Maximum Initial Cost: $313,646 • Time to Return: Less than 10 months

Matco Tools is a mobile automotive tool franchise. It is the best franchise to open that doesn’t require a building. Matco Tools franchisees and deliver tools straight to mechanics. It’s easy work, low cost, and doesn’t ask for royalties, which makes it one of the most popular franchises to start.

#8. McDonald's

• Number of Franchises: 40,000 • Average Monthly Revenue: $2,812,500 • Maximum Initial Cost: $2,503,000 • Time to Return: Less than 11 months

People commonly think McDonald’s is the best franchise to buy. It does have high profit margins and an established brand, but there is a hefty initial investment and a lot of competition.

• Number of Franchises: 590 • Average Monthly Revenue: $1,008,47 5 • Maximum Initial Cost: $899,300 • Time to Return: Less than 11 months

PIRTEK focuses on hoses for hydraulic machines. If you’re looking for entrepreneurial endeavors that focus on industrial applications and offer financial stability, PIRTEK might be for you.

#10. Snap-on

• Number of Franchises: 4,775 • Average Monthly Revenue: $429,319 • Maximum Initial Cost: $465,436 • Time to Return: Less than 14 months

Snap-on is another of the most profitable franchises that sells tools, but the retailer focuses on more than just automotive tools. Both the revenue and the minimum initial costs are higher than Matco, but the time to return might be slightly longer because of the higher initial costs.

UpFlip Top Franchise Opportunities

The following franchise ideas are some of the franchises we have interviewed. These make our best franchise opportunity list because they have low start-up costs, good business processes, and great owners who believe in helping franchisees succeed.

#11. MaidThis

This home and Airbnb cleaning franchise lands on the list of most profitable franchises instead because its extensive business support and remote business model provide many financial benefits.

You focus on business processes and pay others to clean the properties.

Franchise units require a $35K franchise fee and between $48K to $67K total startup costs.

The average location makes $10K per month in revenue. Assuming you make 30% profit, you’ll make back your money in less than two years.

Competing with other franchisees will not limit your financial success because most locations do not have a franchise. When you want to expand your business model, you can expand to other cities quickly.

Learn more about how to start a remote cleaning business from Neel below.

Like Neel's strategy?

Find out how to start a MaidThis franchise .

#12. Brown’s Pressure Washing

Brown's Pressure Washing just launched a franchise opportunity developed by founder Joshua Brown and UpFlip that enables you to launch a fully equipped pressure washing business seamlessly. The licensing fee gives franchisees access to video courses, a website, a boot camp, contracts, a territory, systems manuals, brand licenses, and a 24/7 online support community. Franchisees also agree to pay a 10% royalty fee to cover weekly coaching and administrative support.

• Licensing Fee: $20,000 • Total Investment: $50,000-$100,000 • Royalty Fee: 10% • Space Needed: 100-2,000 square feet • Employees: Hire employees or subcontractors to do the cleaning • Territories: You can buy more than one territory if they are available in your area • Franchising Funding Assistance: Yes, through third-party financing services

Find out how Joshua Brown started Brown's Pressure Washing below.

Want to use Josh's recipe? Become a Brown's franchise .

#13. Wise Coatings

A Wise Coatings franchise coats garage floors and other surfaces with a material similar to epoxy.

You’ll need an initial franchise fee of $50K and a total initial investment of $114K-$134K to become a Wise Coatings franchise owner.

The franchises make between $400K and $500K in revenue and 15%-20% profit margins. The average Wise Coatings franchise recoups its initial costs in two to three years.

• Franchise Fee: $50K • Total Investment: $117K-$160K (including 3 months working capital) • Space Needed: 100-2,000 square feet • Number of Employees: 2-4 (suggested) • Territories: Discounts for buying more than one • Franchising Funding Assistance: Provided through Benetrends. Learn how to qualify.

Check out our interview with Brandon Vaughn, who runs a successful epoxy flooring business, below.

#14. Spray-Net

Spray-Net holds patents in a unique painting process that was innovated by Carmelo Marsala after he found a way to modernize the house painting industry. The company has 40 franchisees (and counting) and owns patents that mean only those who buy in and learn the process can offer it to their customers.

• Franchise Fee: $45,000 • Total Investment: $170,825-$241,825 • Royalty Fee: 8% • Space Needed: 100-2,000 square feet • Employees: Hire employees or subcontractors to do the cleaning • Territories: You can buy more than one territory if they are available in your area • Franchising Funding Assistance: Yes, through third-party financing services

See how you can start a Spray-Net painting franchise in this video:

#15. EverLine

John Evans started EverLine with $500 and a unique vision for parking lot maintenance. Twelve years later, the multimillion-dollar company has franchises all over North America that help keep other businesses’ parking lots safe and looking sharp.

• Franchise Fee: $49,500 • Total Investment: $164,744-$332,443 • Royalty Fee: 9% or $500 per territory+ 3%—whichever is greater • Space Needed: 100-2,000 square feet • Employees: Hire employees to provide the services • Territories: You can buy more than one territory if they are available in your area • Franchising Funding Assistance: Yes, through third-party financing services

Learn more about EverLine in our in-depth interview with its founder here:

Other Commonly Mentioned Franchises

There are plenty of other franchises that provide profitable opportunities. Some commonly mentioned options include:

Anytime Fitness

Dream vacations.

Anytime Fitness earns monthly membership fees from people who want a workout. The company has 2,349 franchises and claims a 16.9% profit margin.

Dream Vacations franchises require very little upfront costs. You can get a franchise for a few thousand dollars and then you make a commission on each travel arrangement you help someone book.

Factors that impact a franchise’s profitability include:

• Costs of goods or services: A franchise, like most small businesses, may spend up to 60% of revenue providing the primary products and services of the business.
• Franchisee satisfaction: A franchisee who is happy with the franchise business is more likely to be successful than one who is disgruntled with the franchisor. Prospective franchisees should talk to other franchisees to see if they are satisfied with their franchise units.
• Sales, general, and administrative (SG&A) costs: According to NYU Stern , SG&A costs are 14.4% of business spending, but the exact amount varies by sector. When SG&A is too high, the business is inefficient; when it is too low, the company may not make as much as the franchisee would like.
• Industry trends: Technology is evolving, and how a company responds to industry trends can make or break it.
• Rent: Owning a franchise will be much more profitable if the company can be a home business. You won’t have additional rent and utilities to pay. Read our resource on how to start a home-based business for more.
• Revenue: A franchise opportunity that has higher average gross sales tends to do better than one with lower gross sales.
• Royalties: Most franchisors collect royalties, which may be either a percentage of sales or a fixed rate each month. These royalties will eat into your profits. Be wary if they are substantially higher than your industry’s SG&A costs.

There are a variety of ways to measure a franchise’s profitability. We’ll discuss how to measure a franchise’s profitability using:

• Net operating income (NOI)
• Franchise fee
• Initial investment
• Return on investment (ROI)
• Break-even analysis

Let’s look at how each of these helps prospective franchise owners judge the most profitable franchise opportunities.

Net Operating Income

The best metric to measure a franchise’s profits is the NOI. This measure of profitability excludes taxes, financing costs, earnings from investment activities, and depreciation to show how much money the business is making.

Franchise Fee

Every franchisor charges a franchise fee for the right to use their business name, business model, and intellectual property. Depending on the opportunity, expect to pay initial franchise fees between $1,000 and a million dollars.

Your franchise won’t be truly profitable until you have taken home at least this much from the franchise opportunity.

Initial Investment

In addition to an initial franchise fee, you’ll want to know the total initial investment to start owning a franchise. Franchise opportunities may require up to $5 million initial investment, but most are between $10K and $100K.

Until you make the initial investment back, you haven’t really made a profit.

Return on Investment

Another way to measure the most profitable franchises is by comparing the ROI. To measure this, you’ll use the net operating income divided by the total investment.

You can measure your ROI on both an annual basis and a lifetime basis.

Cash flow is the amount of money going in and out of the business each month. A negative number means cash is flowing out of the business and you’ll need to reinvest or cut your losses, while a positive number means you are bringing more in than your expenses.

You can divide the initial investment by the cash flow to see how long it will take to get the investment back.

Break-Even Analysis

The break-even point considers the initial investment plus fixed and variable expenses and compares them to revenue. To break even, your investment and expenses equal your revenue—and thus, you’re not losing money. Check out our article on performing a break-even analysis .

Are you ready to become a franchise owner?

Buying any of the most profitable franchises is a great way to start your entrepreneurial journey. While buying a franchise location might cost more than starting your own business on the front end, they are more likely to succeed long term.

Which of these successful businesses are you considering purchasing?

How to Start a Clothing Boutique (And Make $102K/Month)

What is an online boutique?

• Accessories
• Shopping bags

Defining the Idea

• What type of business models are used in successful boutiques and which is best for me?
• Who are the major players in clothing boutiques?

What is the industry outlook?

Which business model is best for a clothing boutique.

The traditional retail boutique

An online boutique, both a retail boutique and an online boutique.

• Increasing brand awareness
• Having higher cost-per-item with drop shipping because you are not ordering in bulk

Who are the major players in the clothing boutique business?

• Asos $2.5B/year in revenue
• Revolve $479.5M/year in revenue
• NastyGal $167.7M/year in revenue
• Lulus $385M/year in revenue
• Francesca's $34M/ year in revenue
• Urbanity $102K/month in revenue
• Check out our interview with Marcus
• Throwbacks NW $25K/month in revenue
• Trendy & Tipsy

Starting a successful boutique

• Writing a Boutique Business Plan
• Purchasing Inventory For Your Boutique
• How Much Does It Cost To Start A Clothing Boutique?
• How to start your own clothing boutique with little or no capital

Funding Your Clothing Boutique

• How Profitable is a boutique?

Naming Your Clothing Boutique

• Getting a domain name
• Meeting the legal requirements for a boutique business.

Write a Boutique Business Plan

• One-page business plan
• U.S. Small Business Administration (SBA) Business Guide
• State-specific templates
• Business Plan Template for a Startup Business
• UpFlip’s blog on How to Write a Business Plan
• SCORE’s free business plans and startup assistance resources
• The Complete Business Plan Course (Includes 50 Templates)

Where to buy clothes for a boutique

• Check out resellers like Goodwill and other nonprofits. Sometimes you can find steals for a low cost.
• If you frequent other boutiques, you can sometimes find improperly priced items. A friend of mine has sold over 1,500 items on Poshmark this way.
• Magic Fashion Events are a great way to keep up with trends in the fashion industry.
• Dropshipping companies which I discussed earlier.
• Check out Brands Gateway's blog about 70 wholesalers for a great list of wholesalers to contact.

How Much Does It Cost To Start A Boutique?

How to start a boutique with no money.

• Shopify - 14-day free trial, which is plenty of time to set up an online shop and sell some products.
• Dropshipping - Check Shopify's app store for options that sell the brand-name clothing you want to sell.
• Amazon - Connect Shopify to Amazon Marketplace to increase exposure to potential customers
• Instagram - Create an Instagram shop and connect your Shopify to it.
• Use social media marketing to start selling to potential customers.
• Reinvest earnings to get some inventory for photoshoots and paid advertising to start marketing and attract even more customers.

• Personal funds/personal assets
• A loan from family or friends
• Funds from a business partner
• Government programs
• Home equity loan
• Business loan - check out our partners
• Rollover for business startups (ROBS)

How much profit can a boutique make?

• Does it describe what you do?
• Is it easy to remember?
• Does it prevent weird acronyms?
• Is it available as a domain name? Check that the domain name and social media accounts are available with namechk .

Get a domain name

• Google Domains

Meeting the legal requirements for a boutique business

Sole proprietorship

Limited liability corporation (llc), partnerships and corporations, sales tax permit.

Tax filing and withholding

Federal employment and labor law posters.

• Employment Eligibility Verification (Form I-9)
• State’s New Hire Program
• Worker’s Compensation Insurance
• Disability Insurance—varies by states
• Occupational Safety and Health Administration (OSHA)

Launch a Website

Product pages.

• The backend of the platform
• Cybersecurity requirements to protect your customers’ credit card information

• Multiple pictures of the product. I suggest following Amazon photography specs as they are the leader in e-Commerce sales.
• Capitalize the 1st letter of each word in the title but don’t use all caps. Make sure the brand and product name is in the title too.
• Include the price, quantity, and an add-to-cart button.
• Product descriptions should communicate the purpose of the product, important features, dimensions, care instructions, and warranty.
• Product identifier that is used to differentiate products. To learn about them or buy some for your products, go to the GS1 website . You’ll need a separate barcode for each variation of size, color, style, or quantity.
• Quick checkout buttons, like the Checkout with Paypal button, are fabulous for conversions.
• Manufacturer information if it is not your own brand.

The back end of a boutique online store

• Woocommerce
• SquareSpace

Cybersecurity requirements

Payment processors, strategies for opening day of a clothing boutique.

• Set up social media pages for your business. Post whole pictures of whole outfits on your social media with links to each product page. Add a discount if they buy the whole outfit.
• Partner with popular brands and do popup stores at fun locations.
• If you are comfortable with Facebook Live, TikTok, or other social media that uses video, launch your brand there.
• Hire teenagers to help you keep an eye on the market and help spread the word with your business.

Grow through marketing

Market Research

• Marketing Plan
• Marketing on Social Media
• Growing Your Email List
• Tapping Into and Growing Your Network

How do I find out who my potential customers are?

Demographics and psychographics.

• Number of children

Use Demographics and interests to build your target market

Use your marketing plan and update it regularly.

Marketing with Social Media

• Facebook (rebranding as Meta) - the largest platform with over 2 billion global monthly users. You can use it for lead generation and email collection.
• Instagram - another Meta-owned platform with approximately 500 million global monthly users. With the highest engagement rate and the best ability to reach 18-29-year-olds, Instagram is best for showing off outfits and linking to product pages.
• Twitter Advertising - I'll be honest with you: I find Twitter to be a way to communicate in industries that move the quickest. While fashion changes, it doesn't change as fast as politics, current events, crypto, and other financial news. If your target market falls into these categories, it might be worth it. If not, don't bother.
• Pinterest Advertising - 175 million monthly users that are mostly women. Pinterest is best for products without being a promotion because the promoted pins blend in with the rest of the styles.
• LinkedIn Advertising - 227 million monthly users that are primarily in the B2B market. I'd only use this if you are offering fashion for business professionals that are too busy to do their own shopping.

Grow Your Email List

Tap into your network, running your boutique, hiring employees.

• Post Open Jobs
• Conduct Interviews
• Establish Compensation
• Manage Tax Filings and withholdings
• Comply with Federal and local labor laws

Job Posting 

• Zip Recruiter
• Who is your current favorite designer?
• How does your previous experience make you a better fit than other applicants?
• How do you respond to a customer when you don’t know the answer to your question?
• Have an article (or articles) of clothing ready and ask them to go through the store and find accessories to go with it.
• What are your compensation expectations?
• Do you have any ongoing commitments that impact your availability? If so, what dates and times will it impact?

Compensation

Hybrid Models

Outsourcing.

• State’s New Hire Program - This is required so that people who owe child support remain in compliance
• Worker’s Compensation Insurance - Insurance for when employees get hurt on the job. Check out this guide to state laws
• Disability insurance - California, Hawaii, New Jersey, New York, and Rhode Island, and Puerto Rico have requirements. Learn more about disability insurance
• Occupational Safety and Health Administration (OSHA) - Federal and state laws govern what are safe working conditions. Fines can be up to $136,532/violation or up to $13,653/day. Make sure you understand your area’s laws at OSHA.gov .

How To Retain Customers For Your Clothing Boutique

• Can they shop without logging in?
• How many steps does it take to check out?
• Can customers easily get to other products that will look good with the item they've added to the cart?
• Do you save items they've added to the cart?
• If they leave the cart (and you have their contact info), do you send them a friendly reminder in case they got distracted?

Managing inventory

Top influencers.

• CladandCloth
• The Pretty Dress
• Check out StarNGage for a ton of other influencers that might fit your boutique.

nice work https://binarychemist.com/

My Name is PRETTY NGOMANE. A south African female. Aspiring to do farming. And finding a home away from home for the differently abled persons in their daily needs.

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Business Proposal Template

Free Resource

A step-by-step business proposal template, including sections for:

• Problem summary
• Proposed solution
• Pricing information
• Proposed schedule
• Project activities
• Completion timeline
• Terms and conditions

Position your company as the best solution.

Whether you're responding to an RFP or reaching out on your own accord, a  business proposal is a key factor in ensuring your services are offered to more people. 

That's why we've made this free  business proposal template.  All you need to do is fill in your company's information, customize the design to fit your brand, and send it off to prospective clients. 

We've included one full-length proposal template for you to be as detailed as possible, as well as one one-page template for a more concise approach.

Download these templates today and start crafting your business proposal on either Word or Google Docs.

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• For Small Business

How to Start a Blog with HubSpot: The Ultimate Guide for 2024

• May 12, 2024
• by steven-austin

Starting a blog has become an essential strategy for businesses looking to attract, engage, and convert their target audience. According to a recent study by HubSpot, companies that publish 16+ blog posts per month generate 4.5x more leads than those that publish 0-4 monthly posts (HubSpot, 2023). With the right platform and strategy, blogging can help establish your brand as a thought leader, drive organic traffic, and contribute to your bottom line. And when it comes to creating and managing a successful blog, HubSpot stands out as one of the most powerful and user-friendly platforms available.

In this ultimate guide, we‘ll dive deep into the process of starting a blog with HubSpot, providing you with expert advice, real-world examples, and actionable tips to help you create a high-performing blog that drives results for your business.

Why HubSpot is the Ideal Platform for Starting a Blog

HubSpot is an all-in-one marketing, sales, and customer service platform that offers a wide range of tools to help businesses grow. When it comes to blogging, HubSpot provides a robust set of features and integrations that make it the ideal choice for businesses of all sizes. Here are some key reasons why:

Ease of use: HubSpot‘s blogging platform is intuitive and user-friendly, with a drag-and-drop editor and customizable templates that make it easy to create professional-looking blog posts without any coding knowledge.

SEO optimization: HubSpot offers built-in SEO tools and recommendations to help you optimize your blog posts for search engines, making it easier to attract organic traffic and rank higher in search results.

Analytics and reporting: With HubSpot‘s analytics and reporting tools, you can easily track your blog‘s performance, monitor key metrics, and gain insights to inform your content strategy.

Integration with other marketing tools: HubSpot‘s blogging platform seamlessly integrates with other marketing tools like email, social media, and lead generation, allowing you to create a cohesive and effective marketing strategy.

Now that we‘ve established why HubSpot is an excellent choice for starting a blog let‘s dive into the steps you need to take to set up your blog and create your first post.

Setting Up Your Blog on HubSpot

Setting up your blog on HubSpot is a straightforward process that can be completed in just a few steps:

Navigate to the blog tool: In your HubSpot account, go to Marketing > Website > Blog.

Create a new blog: Click "Create Blog" and choose a name and URL for your blog. Your blog name should be descriptive and aligned with your brand, while the URL should be short, memorable, and include relevant keywords.

Choose a template: HubSpot offers a variety of customizable blog templates to choose from, or you can create your own. Select a template that aligns with your brand‘s visual identity and provides a great user experience for your readers.

Customize your blog‘s branding: Add your logo, choose colors, and adjust fonts to ensure your blog aligns with your brand‘s visual identity. Consistency in branding across your website and blog helps build trust and recognition with your audience.

Set up navigation and create necessary pages: Create a clear navigation structure for your blog and add any necessary pages, such as an "About" page or a "Contact" page. These pages provide valuable information for your readers and help establish your blog‘s credibility.

Developing Your Content Strategy

Creating a successful blog requires more than just setting up the technical aspects; you also need a well-planned content strategy. Here are the key steps to developing a content strategy that resonates with your target audience and supports your business goals:

Define your target audience: Understanding your target audience is crucial to creating content that resonates with them. Consider creating buyer personas that outline your ideal reader‘s demographics, pain points, challenges, and interests. According to a study by Cintell, companies who exceed lead and revenue goals are 2.4x as likely to use buyer personas for demand generation (Cintell, 2016).

Set clear goals: Determine what you want to achieve with your blog, whether it‘s driving traffic, generating leads, or establishing your brand as a thought leader. Setting specific, measurable goals will help guide your content creation and allow you to track your progress.

Conduct keyword research: Use HubSpot‘s keyword research tool to identify relevant keywords and phrases that your target audience is searching for. Incorporating these keywords into your blog posts can help improve your search engine rankings and attract more organic traffic. According to HubSpot, 64% of marketers actively invest in search engine optimization (HubSpot, 2021).

Plan your content: Create a content calendar that outlines the topics you‘ll cover, the target keywords for each post, and the publication dates. A consistent publishing schedule helps keep your audience engaged and supports your SEO efforts.

Determine content formats: In addition to standard blog posts, consider incorporating other content formats like infographics, videos, and podcasts to provide variety and cater to different learning styles. According to HubSpot, 54% of consumers want to see more video content from brands they support (HubSpot, 2022).

Creating High-Quality Blog Posts

Now that you have a solid content strategy in place, it‘s time to start creating compelling blog posts that engage your audience and drive results. Here are some best practices for crafting high-quality blog content:

Craft compelling headlines: Your headline is the first thing readers will see, so it needs to be attention-grabbing and informative. Use strong action words, include numbers or statistics, and make sure your headline accurately reflects the content of your post.

Write engaging introductions: The introduction should hook your readers and provide a clear idea of what the post will cover. Use storytelling techniques, ask a thought-provoking question, or share an interesting statistic to draw readers in.

Use subheadings and formatting: Break up your content into smaller, digestible sections using subheadings, bullet points, and numbered lists. This makes your post easier to read and helps readers quickly find the information they‘re looking for.

Incorporate visuals: Adding images, videos, and infographics to your blog posts can make them more engaging and visually appealing. According to HubSpot, articles with an image once every 75-100 words received double the social media shares as articles with fewer images (HubSpot, 2021).

Provide value: Above all, your blog posts should provide genuine value to your readers. Focus on addressing their pain points, answering their questions, and offering actionable advice they can implement.

Optimizing Your Blog Posts for SEO

To ensure your blog posts reach the widest possible audience, it‘s essential to optimize them for search engines. HubSpot‘s blogging platform offers built-in SEO tools and recommendations to help you optimize your posts. Here are some key steps to follow:

Include target keywords: Incorporate your target keywords naturally throughout your post, including in the title, headings, and body content. However, avoid keyword stuffing, which can negatively impact your search engine rankings.

Optimize your meta description: Your meta description is the short text that appears under your post‘s title in search engine results pages (SERPs). Write a compelling meta description that accurately summarizes your post and includes your target keyword.

Use alt text for images: Add descriptive alt text to all images in your post, as this helps search engines understand the context of your visuals and can improve your post‘s accessibility.

Leverage internal and external linking: Link to other relevant posts on your blog to keep readers engaged and help search engines understand your site‘s structure. Additionally, include external links to high-quality sources to support your content and build credibility.

Monitor your SEO performance: Use HubSpot‘s SEO tools to track your post‘s search engine rankings, monitor keyword performance, and identify opportunities for improvement.

Promoting Your Blog Content

Creating great content is only half the battle; you also need to promote your blog posts to reach your target audience. Here are some effective strategies for promoting your blog content:

Share on social media: Share your blog posts on your company‘s social media channels to reach a wider audience and drive traffic back to your site. Use eye-catching images and compelling copy to encourage clicks and engagement.

Email your subscribers: Notify your email subscribers when you publish new blog content to keep them engaged and drive repeat traffic to your site. HubSpot‘s email marketing tools make it easy to create and send automated blog updates.

Engage in guest blogging: Reach new audiences by contributing guest posts to other relevant blogs in your industry. Include a link back to your own blog to drive referral traffic and build backlinks, which can improve your search engine rankings.

Leverage paid promotion: Invest in paid promotion on social media and search engines to reach a targeted audience and drive more traffic to your blog. HubSpot‘s advertising tools can help you create and manage effective paid campaigns.

Repurpose your content: Extend the reach of your blog posts by repurposing them into other formats, such as infographics, videos, or podcasts. This allows you to reach new audiences and cater to different content preferences.

Measuring and Analyzing Your Blog‘s Performance

To continually improve your blog‘s performance and make data-driven decisions, it‘s crucial to track and analyze key metrics. HubSpot‘s analytics and reporting tools provide valuable insights into your blog‘s performance, allowing you to:

Track traffic and sources: Monitor how much traffic your blog is receiving and where that traffic is coming from (e.g., organic search, social media, email, etc.).

Measure engagement: Track metrics like average time on page, bounce rate, and comments to gauge how engaged your readers are with your content.

Monitor conversions: Set up goals in HubSpot to track how many blog visitors are converting into leads or customers, and identify which posts are driving the most conversions.

Identify top-performing content: Analyze which blog posts are receiving the most traffic, engagement, and conversions to inform your future content strategy.

Continuously optimize: Use the insights gained from your analytics to make data-driven improvements to your blog, such as updating underperforming posts, optimizing for additional keywords, or creating more content on popular topics.

Expert Tips for Blogging Success

To help you take your blog to the next level, here are some expert tips from seasoned HubSpot bloggers:

Prioritize quality over quantity: It‘s better to publish one well-researched, in-depth blog post than several shallow, low-quality posts. Focus on creating content that provides genuine value to your readers.

Collaborate with industry influencers: Reach out to influencers in your industry for quotes, interviews, or guest post opportunities. This can help you tap into their audience and add credibility to your content.

Optimize for featured snippets: Structure your content in a way that makes it easy for search engines to pull key information into featured snippets, such as using a Q&A format or creating a "How to" guide. According to HubSpot, featured snippets account for 35.1% of all clicks (HubSpot, 2022).

Encourage engagement: End your blog posts with a question or a call-to-action that encourages readers to leave a comment, share their thoughts, or take a specific action. This helps foster a sense of community and can lead to valuable insights and discussions.

Continuously educate yourself: Stay up-to-date with the latest blogging trends, SEO best practices, and content marketing strategies by attending industry conferences, reading relevant blogs, and participating in online courses or webinars.

Starting a successful blog with HubSpot requires a combination of technical setup, strategic planning, and ongoing optimization. By following the steps and best practices outlined in this ultimate guide, you‘ll be well-equipped to create a high-performing blog that drives traffic, engages your audience, and supports your business goals.

Remember, blogging is a long-term strategy that requires patience, persistence, and a commitment to providing value to your readers. By consistently publishing high-quality content, promoting your blog through various channels, and leveraging HubSpot‘s powerful tools and analytics, you can build a thriving blog that positions your brand as a thought leader and drives meaningful results for your business.

• HubSpot. (2023). The Ultimate List of Marketing Statistics for 2023.
• HubSpot. (2022). State of Inbound Marketing Trends.
• HubSpot. (2021). 22 Essential SEO Tips and Strategies.
• Cintell. (2016). The B2B Benchmark Report: How companies are using buyer personas.

How to Write an RFP for Grants – Everything You Need to Know

Updated: May 09, 2024

Published: May 08, 2024

Beth Goldowitz, who’s been managing nonprofit organizations for the past 20 years, says that when “managed correctly, grants can keep organizations afloat. They’re stable and predictable, a revenue stream that the organization can count on for the duration of a contract.”

But do you know how long it takes to write a single grant application?

Over 30 hours, and considering that grant writers usually get paid between $25 and $100 per hour, depending on their experience, it’s a significant cost. That’s why it’s so important for nonprofits to decide which grants to pick.

Your organization can make it much easier for applicants to assess if they’re the right fit for your project. It all comes down to getting your RFP for grants right, including adding the right sections and asking the right questions.

Before I dive deeper into the subject, let’s answer the question: what is an RFP for grants?

What is an RFP for grants?

The challenges of writing an rfp for grants, the anatomy of an rfp for grants, how to write an rfp for grants, best practices for writing an rfp for grants, rfp for grants resources.

An RFP for grants, or Request for Proposals, is a document issued by grantors such as foundations and government agencies encouraging nonprofit organizations to submit proposals for funding.

Essentially, RFPs offer nonprofits an opportunity to secure funding for various initiatives, irrespective of whether they relate to education, healthcare, or environmental causes.

Each RFP is tailored to achieve a specific goal, so submitted proposals must be in line with the objectives outlined in the RFP.

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I have spoken to a few people working at nonprofits to find out what challenges they came across, either while creating their own RFPs or preparing RFP proposals. Here are the most common obstacles.

Lack of Sufficient Information About the Procurement Process

The quality of your procurement process will impact the quality of the applications you receive. If you don’t share enough information about it, like the timeline, budget, selection criteria, etc., then two things might happen:

• You will receive applications that aren’t the right fit for the project.
• A lot of applicants who are the right fit won’t take part in the process as they’ll feel discouraged by the lack of clarity.

The more detailed and logical your procurement process is, the higher the chances of receiving high-quality proposals.

RFP Grants Failing to Communicate the Vision Clearly

This is an RFP grant challenge that has come up the most frequently.

Gauri Manglik, CEO and co-founder of Instrumentl , says that “many organizations struggle to articulate what specific issues they are trying to address and how the grant they offer will drive impact.”

What often happens is that RFP grant writers take a scattered approach instead of having a cohesive strategic framework. As a result, it’s hard for founders who give out grants to evaluate the proposal’s purpose and potential.

Manglik adds that “the most effective RFPs have a sharply defined focus outlining the goals, target population, and theory of change for proposed activities.”

Not Understanding the Legal Implications of the Grant

Grants often come with terms and conditions that must be followed to stay compliant. Failing to do so might result in penalties or even in grants being revoked.

These terms and conditions should be clear and easy to understand to minimize the risk of breaching them.

Jonathan Feniak, general counsel at LLC Attorney , says, “When writing RFP grant proposals, it’s crucial to understand the legal implications of the grant and factor any liabilities into your plan.

If any IP is developed with grant funding, you must specify ownership rights to avoid potential conflicts with donors later.”

Feniak also notes that proposals should clearly outline your expectations, and you must agree on whether the charity or the investor owns its rights.

“Generally, it’s best to consult your legal team throughout the RFP writing process to manage the risks and clearly outline IP ownership,” adds Feniak.

Ensuring clarity and specificity in the language used.

It’s vital to use a language that is not only clear but also specific so it’s easier for potential bidders to understand what’s expected of them. This applies to the requirements, objectives, and expectations of the project.

Kimberly Wall, co-founder of BibleKeeper , says, “The challenge lies in articulating the project’s goals, objectives, and expected outcomes clearly using words that are not really overwhelming the potential applicants with unnecessary details.”

Using the right language will eliminate confusion among nonprofits and make sure that their proposals accurately correspond to the needs of the RFP issuer.

RFPs for grants come in two forms: concise, short tables, where information is filled out in bullet points, and longer ones, which cover each section in detail.

The former aims to give a high-level overview, while the latter is where applicants take a deep dive into their proposal.

So, there isn’t such a thing as an “ideal” length for an RFP. These types of documents can take up multiple pages and usually function as downloadable PDFs.

If you’re wondering what elements grantors should include, then here’s an RFP structure we recommend at HubSpot.

RFP: [Project Name]

Proposal Due By: [Date]

[Organization Name]

In addition to the name, this section could also feature a short overview of your mission. Don’t include a long history of your organization. Instead, use this space to provide a bit of context on what it does and its target market.

Project Overview

A brief introduction to the project itself to let nonprofits know right away if it’s something worth bidding on — no longer than 1-2 paragraphs.

Project Goals

This section identifies what you hope to accomplish through assigning funds to relevant organizations. Specify what you’ll see as a “win” so everyone is on the same page.

Scope of Work

A description of the project and a scope of work — either detailed, if it’s a long RFP, or bullet points if it’s short.

Current Roadblocks and Barriers to Success

In this section, mention any potential constraints that could either disqualify certain candidates or increase the operational complexity of meeting goals.

Evaluation Metrics and Criteria

Here, you outline how you’re going to choose grantees. There are different approaches — some companies use simple “yes” or “no” evaluations to check if a proposal meets the project objectives.

Other organizations use percentages to score more important criteria higher than others.

Submission Requirements

Exact guidelines bidders must adhere to.

Project Due By

If there is a specific project delivery date, mention it in the RFP. This will help you filter out applicants who can’t guarantee completing it within the required timeline.

Here, you should include the target budget. Specify if this budget will be distributed among multiple organizations or assigned to a single grantee.

General Conditions of Contract

This could include information like:

• Applicant’s legal status.
• Your stance on subcontracting.
• Indemnification, insurance, and liabilities.

Some templates also suggest asking questions that you expect bidders to answer — these can serve as a way to further check their alignment with your mission.

So, now that you know what goes into an RFP, let’s learn how to write them. Below, I’ll describe the steps you should take when tackling this paperwork.

In each section, I’ll work through the steps, as I build a mock RFP for sustainability nonprofits.

My sample organization, Earthly Partners, is looking to fund sustainability projects based in the Southwestern United States. Let's get started.

1. Identify the objectives.

In this step, I want to list all the key information, like goals, timeline, budget, and applicant profile.

As you gather these, you’ll likely come across some informational gaps or considerations that require expert knowledge, like legal considerations and grantor/grantee obligations.

This is an important preliminary stage, which should end with a complete list of information you’ll need to evaluate bidders.

Testing It Out

So, what does my organization, Earthly Partners, want to accomplish? We want to focus on fighting climate change in the South West, particularly through drought relief and community advocacy.

We are able to provide grants of up to $50,000 to each nonprofit.

2. Write an introduction.

Now, I want to provide a bit of information about the organization and the area we focus on. I may also include my organization’s values, current challenges, and the problems we would like to address.

Here is an example of an intro to Earthly Partners’ RFP. Here, we highlight the mission that we focus on and a little bit about our mock organization’s history.

Earthly Partners is pleased to announce the availability of grant funding to support projects that align with our mission of environmental conservation and advocacy.

Established in 2010, Earthly Partners has been dedicated to promoting eco-friendly practices, water conservation, and community empowerment. We recognize the importance of fostering innovative solutions and collaborations within our community, and through this grant opportunity, we aim to support projects that demonstrate creativity, sustainability, and significant impact.

We are most interested in projects focused on community advocacy for climate policies and drought relief.

3. Provide a project description.

This section should serve as a high-level overview. Potential applicants will look at it to quickly assess whether they can propose a relevant project within the required timeline and available budget.

Here’s my project description for my mock sustainability nonprofit:

Grant Purpose: The purpose of this Request for Proposals (RFP) is to solicit proposals for projects that address environmental conservation, climate change mitigation, or sustainable development.

We seek proposals that offer innovative approaches, foster community engagement, and contribute to the long-term sustainability and resilience of ecosystems and communities.

Grant Details:

• Total Funding Available: $50,000
• Grant Duration: 12 months
• Grant Amount: Grants may range from $2,500 to $10,000
• Eligibility: Nonprofit organizations and community groups operating within the Greater Metropolitan Area are eligible to apply.
• Application Deadline: July 31, 2024.

4. List clear requirements.

Here, I can specify what exactly I need to know about the proposal. That includes asking the applicants for the project description and how it will help fulfill the goals of your grant.

Continuing with the sustainability grant project from above, this section could look like the following:

Proposal Guidelines:

Applicants are invited to submit proposals that address the following key components.

• Project Description: Provide a detailed description of the proposed project, including its objectives, activities, target population, and anticipated outcomes.
• Project Impact: Clearly articulate the potential impact of the project on the environment or the local community. Describe how the project will contribute to positive change and address identified environmental or social needs.
• Innovation and Creativity: Highlight any innovative approaches or strategies proposed to address the identified environmental or social challenge. We encourage applicants to think creatively and propose solutions that may be outside traditional approaches.
• Sustainability: Demonstrate the project’s sustainability beyond the grant period. Describe plans for ongoing funding, partnerships, and stakeholder engagement to ensure the long-term success of the project.
• Roadblocks to Success: Identify potential challenges or roadblocks that the project may face and describe strategies to overcome them. Consider factors such as regulatory hurdles, community resistance, funding constraints, or technical limitations.
• Budget and Timeline: Provide a detailed budget that outlines how grant funds will be used. Include a project timeline with key milestones and deliverables.

5. Include a submission deadline.

Here, I want to call out the deadline for submissions and explain my preferred way of submitting proposals.

For Earthly Partners, I want to have proposals by the end of July. I call that out, along with my preferred submission format, below.

Submission Instructions:

Please submit your proposal electronically to [email address] no later than July 31, 2024. Proposals should be submitted in PDF format and include the organization's name, contact information, and the title of the proposed project in the subject line.

​​​​6. Be clear on the evaluation factors.

It’s important to explain all the elements your organization will pay attention to while evaluating applications.

Applicants who do not meet your criteria will likely withdraw from submitting their proposal if they don’t see they’re a good fit. This, in turn, will help you pre-qualify organizations and shorten the selection process.

For Earthly Partners, I want to explain how we plan to evaluate applicants and give an overview of next steps. This allows me to explain what projects are likely to receive funding and the timeline for these evaluations.

Evaluation Process:

Proposals will be evaluated based on the following criteria:

• Alignment with Earthly Partner’s mission and grant objectives.
• Clarity and feasibility of the project proposal.
• Potential impact and sustainability of the project.
• Innovation and creativity of proposed approaches.
• Budget justification and cost-effectiveness.

Notification:

Applicants will be notified of funding decisions by August 31, 2024. Successful applicants will receive further instructions regarding grant agreements, reporting requirements, and funding disbursement.

7. Proofread and edit the document.

I use the editing process to make sure that all the necessary elements are included in my RFP and that the instructions are easy to follow.

Failing to use easy-to-understand language might result in low-quality submissions. It’s a good idea to ask a few of your colleagues for feedback to ensure you’ve not missed any important details.

Here are a few considerations to take into account while preparing your RFP.

Dedicate time to selecting the right eligibility and application criteria.

This is, arguably, the single most important section of your RFP — perhaps even more important than “budget,” as NGOs will want to quickly assess their eligibility.

Esther Strauss, co-founder of Step by Step Business , agrees:

“Given the diversity of causes we support, from education to environmental conservation, finding a grant that provides the necessary funding and also aligns with our goals can be like searching for a needle in a haystack.”

Strauss says that, whenever applying for a grant herself, she needs to know if her organization can genuinely meet the grantor’s requirements while staying true to the organization’s objectives and values.

The need to get the application “right” can also extend to selecting the right application format or method. “The pressure to get it right is immense, as these grants can significantly impact our ability to serve our community,” she adds.

So, how can you make it easier for applicants to assess if they’re the right fit and avoid application mistakes?

Include clear information like:

• Only bidders who meet at least X out of Y criteria will be considered.
• Proposals must be sent in [FORMAT] by [DEADLINE]. Applications sent in through other channels will not be considered.
• Application needs to include a proposed schedule.
• Proposals must be shorter than [NUMBER] pages. Failure to comply with this guideline will result in an automatic rejection.

For a real-life example, you can also look at this RFP proposal from the U.N. , which keeps the requirement descriptions clear and concise.

As you can see, the quality of the proposals and organization fit lies largely in your hands.

Image Source

Simplify negotiations by including key contract terms.

Earlier, I’ve mentioned that many RFP grant writers struggle with translating legal requirements in the RFP.

Wayne Tung of Sendero wrote a great piece on this subject, encouraging RFP publishers to give it the same level of attention as requirements and scope.

“Many people do not include contract term requirements, such as legal and commercial terms, in RFPs. This results in prolonged negotiations,” or even failed grants, he says.

Featuring the main contract terms in the RFP shows respect for both parties — you as the project operator and the organizations seeking funding.

Sometimes, fewer questions are better.

I spent quite some time going through Reddit threads popular among the RFP community, and one of the most interesting points I’ve seen was about question-fit.

One Redditor, roger_the_virus , blatantly says grantors should avoid “useless questions that won’t provide helpful answers. I do my best to make sure we’re not asking for a bunch of information we don’t need and won’t do anything with.”

That said, when it comes to questions, don’t automatically discredit applicants who can’t answer all of them. Offer organizations that have pitched a fitting project and budget the opportunity to ask follow-up questions.

This will prevent them from submitting answers with low informational value, i.e., responses that are vague or unrelated to your query.

Speaking of supplementary questions, this leads to the next point.

Provide clear contact information.

The larger your organization, the less likely it is that there will only be one person responsible for proposal reception and answering questions from applicants.

However, even if it’s an entire office, you should provide contact information with the relevant communication method — either walk-ins between a specific time, like Monday to Friday, email address, or phone number.

Bear in mind that many nonprofits apply to RFPs ongoingly and will only do so if they see that the grantor can help with applicant requests. Here’s an opinion on Reddit from an RFP proposal writer, which garnered multiple upvotes:

“I won’t respond to an RFP unless they commit to giving me their time for detailed discovery and a chance for them to read me the RFP requirements line by line and why they’re important.”

Disclose any potential blockers.

Finally, be transparent about any potential roadblocks winning bidders might come across.

When applying for grants, NGOs need to know if they have the means to complete the project and if there are any other issues, like conflict of interest.

For example, say your organization wishes to assign funds to boost literacy rates in remote rural areas. One of the prerequisites could be having established relationships within target communities.

Such an approach will help preselect applicants, particularly those who don’t have the operational capacity to navigate around any potential constraints.

Here are three resources that might come in handy while drafting an RFP for grants.

1. Candid’s Foundation Directory

Candid’s Foundation Directory shares essential information to help you make smart and strategic funding requests. These resources and tools give you access to funding opportunities that go beyond RFPs.

It includes a list of foundations, including their profiles, funding priorities, application procedures, and contact information.

RFP writers can go through the proposals that have been published already and use them as inspiration to create their own.

2. Free RFP Templates From HubSpot

HubSpot’s Free RFP templates are a great starter kit and will help you draft your request in no time.

This resource gives you two RFP versions — a shorter one and a longer one. Both documents are fully customizable, allowing you to easily add your company name and logo.

You can download them in PDF or turn them into a Microsoft Word or Google Docs file.

These templates include all the crucial elements of an RFP, such as:

• Company name and background.
• Project goals.
• Expected project timeline.
• Submission requirements.
• Evaluation criteria.
• Potential roadblocks.

Each section comes with a quick explainer to help you get the contents right.

Download HubSpot’s RFP Templates for Free

3. Reddit – RFP Subreddits

Unsurprisingly, Reddit is one of the best places to learn from RFP experts as well as understand the applicant’s perspective.

I especially recommend following the RFP subreddit and navigating into more intricate conversations and topics from there.

While many of the discussions cover not only grants but also commercial projects, the advice is universal.

It also goes without saying that you shouldn’t just lurk around the corner — if there’s a challenge you’ve come across while drafting your RFP, this is the community you should ask for advice.

Getting Your RFP for Grants Right

Writing the RFP is the first — and arguably — most important step in the entire grant process. How so? It’s up to you as the grantor to select the right questions and criteria and explain the purpose of the project.

Remember, the more information you provide potential applicants, the easier it will be for them to assess if they fit the grant objectives. And this, in turn, will lead to a higher quality of proposals.

While there isn’t a one-size-fits-all template for each project, there are certain must-have sections to include. So, refer to this article to get a head start next time you need to create an RFP for grants.

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