business plan company establishment

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Business plans aren't just for startups. Developing a business plan for an established business serves several purposes: It can help convince investors or lenders to finance your business, persuade a business buyer to purchase your business or entice partners or key employees to join your company. Most importantly, it serves as a roadmap guiding your business's growth and continued success throughout its following stages.

Writing a business plan is an opportunity to carefully think through every step to achieving your goals for your company. This is your chance to discover any weaknesses that may threaten your business, identify opportunities you may not have considered, and plan how to deal with challenges that are likely to arise.

This template includes instructions for each section of the business plan for your established business, followed by corresponding fillable worksheet/s.

Sections of this business plan include:

• Executive Summary
• Company Description
• Products and Services
• Marketing Plan
• Operational Plan
• Management & Organization
• Personal Financial Statement
• Financial History and Analysis
• Financial Plan

The last section in the instructions, “Refining Your Plan,” explains ways to modify your plan for specific purposes, such as getting a bank loan, or for specific industries, such as retail.

After you complete the worksheets, print them out, and you will have a working business plan for your established business. Then, contact a  SCORE mentor  to review and refine your plan.

Business Planning & Financial Statements Template Gallery Download SCORE’s templates to help you plan for a new business startup or grow your existing business.

Simple Steps to Write and Follow a Sustainable Business Plan that Ensures You Achieve Your Goals In this webinar, you will learn how to write a business plan to ensure you can go from business idea to business success.

You Created a Business Plan; Now What? So you have created your business plan. Now what?. In this webinar, you will learn the next step, how to execute your business plan.

Copyright © 2024 SCORE Association, SCORE.org

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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

• 3 years ago

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?

Brandon Boushy

Brandon Boushy lives to improve people’s lives by helping them become successful entrepreneurs. His journey started nearly 30 years ago. He consistently excelled at everything he did, but preferred to make the rules rather than follow him. His exploration of self and knowledge has helped him to get an engineering degree, MBA, and countless certifications. When freelancing and rideshare came onto the scene, he recognized the opportunity to play by his own rules. Since 2017, he has helped businesses across all industries achieve more with his research, writing, and marketing strategies. Since 2021, he has been the Lead Writer for UpFlip where he has published over 170 articles on small business success.

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Blog / Small business tips / How to create a business plan: A complete guide to writing your company roadmap

How to create a business plan: A complete guide to writing your company roadmap

A business plan is a roadmap that outlines what your business does, how it’s going to work and how you’re going to achieve your goals. 

According to Bplans , who worked with the University of Oregon to analyse academic research around planning, entrepreneurs who take the time to create a plan for their business idea are 152% more likely to start that business.

Further, 129% are more likely to push forward with it beyond the start-up phase. And companies that strategically plan grow 30% faster than those that don’t. 

In this guide, we’re going to walk you through how to write a business plan that helps your company start, build and achieve success.   

Table of contents

What is a business plan and why do you need one, the nine key components of a business plan and how to write them.

• Five top tips for writing a compelling business plan

📹 Masterclass video: How to write the perfect business plan

Wrapping up.

A business plan is a document that guides you through the various stages of building, launching and running your business. Essentially, it helps you put the building blocks in place to make your company a success.

If you’re bringing a new small business to market, a business plan will be crucial in:

• Securing funding or loans
• Achieving investment or raising venture capital
• Attracting talent or business partners
• Guiding your go-to-market strategy

All banks and most investors and venture capitalists will only invest in a business if they can see that they’ll get their money back. They want to know that you have the business idea, team, scalability and planned sales growth to succeed. A business plan gives financiers the details they need to make informed decisions. 

Similarly, for talent or prospective partners, a business plan is your assurance to them that your business matches their short and long-term career ambitions. 

A business plan also keeps you focused on what you need to do to accomplish your goals. If you’re not meeting your targets, you can turn to your business plan to help guide you on changes that need to be made. It’s the drawing board you can always go back to. 

Because of this, having a business plan is as important for existing businesses as it is for start-ups. 

Top Tip: Business plans also apply to side hustles. Even if you have a full-time job or already run a small business, a side hustle can be a great way to pull in extra income or capitalise on a hobby. But just because it doesn’t take up all of your time doesn’t mean it should lack structure. To learn more about how to effectively run a side business, read our guide to 5 side businesses you can start quickly and affordably 💡

How long should a business plan be?

According to Growthink surveys, 15 to 25 pages is the optimum business plan length. But the number of pages isn’t the ideal way to measure length. 

As Bplans points out: “A 20-page business plan with dense text and no graphics is much longer than a 35-page plan broken up into readable bullet points, useful illustrations of locations or products, and business charts to illustrate important projections.”

Instead, Bplans says that your business plan should: 

• Take no longer than 15 minutes to skim read . Make sure that key information in each section is easy for readers to find.
• Mirror the length of its audience . The length is directly tied to the intent. If the purpose is for outsiders who know nothing about your business to gain a deeper understanding, it must include detailed executive summaries and team descriptions. If the intent is to procure investment, it must be built to withstand legal scrutiny and include any information a bank would look for in a business loan application. Know your audience, and work backwards to create the ideal business plan to match that scenario (we’ll dive into exactly how to do this in a later section).

How to present your business plan?

Your business plan is designed to evolve as your business grows. It’s a living document that should be consistently tweaked to match the health and goals of your company. Because of this, it’s best to keep your plan as a digital document that can be easily updated and sent to third parties as a PDF. 

That said, there may be times when your plan needs to be presented to investors or bank managers in person, so it should always be print-ready with a front cover that includes your:

• Company name
• Company logo and colour scheme
• Business name and date
• Contact information

It should also have a contents page, with numbered pages and sections so that readers can easily find what they’re looking for.

When you are ready – register your business with Tide for FREE ! Registering your business with Tide is incredibly fast, easy and free. You not only get to officially start your company, but you get a free business bank account at the same time, which is the best way to ensure you’re keeping your finances in order from day one. Be your own boss and register your company with Tide !

A business plan features nine main sections related to your business operations, structure and finances: 

• Executive summary
• Company description

Market analysis

• Management and company structure
• Service or product information
• Marketing and sales strategy
• Funding information
• Financial projections

Let’s take a closer look at each. 

1. Executive summary

The executive summary is a top-level look at your business that summarises the detailed information found in the rest of the sections.

It’s also your elevator pitch—a chance for you to immediately captivate the reader by portraying your mission, vision, goals, product, leadership, finance information and growth plans.

Picture yourself in a lift for 45 seconds with a potential investor. How would you sell your business? Think about that when writing this section. Be concise and compelling with your words.

Because it is a summary, it’s often easier to write this section last after you’ve fleshed out the finer details of your business plan .

Writing your executive summary

Start with the basic information:

• Your company name
• Company address
• Names of all owners and partners

Then, get into the business information. 

• Value proposition . Describe in one sentence what your company does and why it’s great. This is your value proposition. For example, Uber’s value proposition is “The smartest way to get around”. For email marketing platform MailChimp it’s “Send Better Email”. For Dollar Shave Club it’s “A great shave for a few bucks a month”.
• Problem and solution . In a paragraph, briefly explain the problem customers are facing and how your product or service solves it.
• Target customers. Who is your ideal customer? Be extremely specific. For example, if you’re selling men’s suits, your audience won’t simply be every man because every man wears suits. That doesn’t hold true. It’s more likely to be targeted towards ‘fashion-conscious men’ or ‘businessmen’.
• Competitors . List other companies that are solving the same problems you are and how they’re solving them.
• Team . A sentence or two on why your team is the best team to bring your product or service to market.
• Finances . Focus on the key aspects of your financial plan–your planned costs and how you will make money.
• Funding . Details of your start-up costs and how much you need to raise to get your business off the ground. 
• Milestones . Briefly mention what you’ve achieved so far and what goals you plan to achieve. This lets potential investors, talent or partners know how serious you are in building a successful business. 

As mentioned above, before you can write this section you have to flesh out all of your company details, including who you are, who you’re selling to, how you’re going to sell your product or service, what your financial goals are, how you will reach those financial goals, and so on. 

The rest of this article will inform you on how to do just that. 

2. Company description

The company description is your story. It digs deeper into your value proposition, looking at how you came to be and what you intend to achieve.

Break your description down into three sections: 

Mission statement

Company profile, business objectives.

Your mission statement is a sentence or short paragraph that describes why your business exists.

To create your mission statement, answer the following questions:

• What does my business do?
• How do we do it?
• Who do we do it for?
• What value are we bringing to customers?

For example, Patagonia’s mission statement is “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

In a single sentence, they get across their aims and ambitions, their value to the market (safe, quality products) and their value to people and the world (helping the environment). 

Use this as inspiration to come up with a statement that captures the heart and soul of your business.

Top Tip: Your company description will also help to inform your business culture. You will carry these core values throughout all of your business behaviours and they will also influence how you make future business decisions. Because of this, it’s crucial to devote the necessary time and energy to get this right. To learn exactly how to do that, read our guide on why business culture matters & how to get it right from the start ☀️

In a paragraph or two, your company profile should detail your: 

• Founding date
• Company location
• Products or services
• Number of employees
• Details of company leaders and their roles
• Company milestones

The information is the most important thing here, so approach it like a business profile and stick to the facts and figures.

In a paragraph or two explain what you want to achieve as a business. This needs to be a realistic aim that investors can get behind and your team members can work towards. 

The SMART goals method can help you to ensure your goals are practical.

SMART stands for: Specific, Measurable, Attainable, Relevant, and Timely. 

Use graphs to add weight to your objectives. For example, if you aim to increase revenue from £100,000 in year one to £500,000 by year five, create a chart that plots your growth. The visual aspect helps to grab attention whilst providing readers with key information they may miss if skim reading. 

This chart from an example business plan does just that:

You’re immediately drawn to the planned-growth projections and want to learn about how they’ll reach such high goals. We will get into the specifics of how to create accurate sales and revenue forecasts in a later section.

Top Tip: To learn more about how to establish practical SMART goals that will inform your business strategy and help you effectively market your brand, read our beginners guide to digital marketing strategy . 

3. Market analysis

Marketing analysis focuses on three areas:

• Your target market (the industry your selling in)
• Your customers (who you’re selling to)
• Your competitors (who you’re selling against)

By detailing information about the themes and trends within your industry, you’ll be able to show that the appetite for your product or service exists. Outlining information about your ideal customer helps you to identify the marketing and sales tactics you can use to attract them. And highlighting your competitor’s strengths and weaknesses gives you a chance to showcase what you do better than the rest. 

Market analysis should identify the market as a whole, as well as your addressable market and your share of the market. From this information, you can begin to get an idea of your target market, which informs your messaging, positioning and unique selling point (USP).

Start by researching the current state of your industry and where the market is heading in terms of size, trends and projected growth.

Your approach here will depend on your business. For example, if you’re opening a small local shop, you should assess the market around your shop. If you’re starting an ecommerce business and selling UK-wide, you’ll need to analyse the market at a national level. 

When estimating market size, look at:

• Volume . The number of potential customers
• Value . The value of the market

You can find this information by searching for publicly available data or by commissioning a market research report. If you’re searching on a national level, you may find figures published online. On a local level, data might not be as easy to come by, which is where you’ll need to carry out your own research. 

Top Tip: Conducting market research takes time, but it’s important that you get a full picture of your audience to ensure your message and USP resonates. To learn more, read our detailed guide on how to conduct market research for your business idea ⚡️

Once you have the information, you can use TAM SAM SOM to work out your business’ relationship to the market size.

• TAM stands for Total Addressable Market
• SAM stands for Serviceable Addressable Market
• SOM stands for Serviceable Obtainable Market

• To calculate your TAM, work out how many people have a need for your business. For example, let’s say you’re opening a shop selling custom-designed women’s clothes in a town of 100,000 people. Market research shows that 50% (50,000) of residents are women. Your total addressable market would be 50,000 people. 
• To calculate your SAM, take your TAM and discount all the people that fall outside of your target market. Let’s say your target market is women between 18 and 35, with disposable income. This discounts 30,000 people, which means your serviceable addressable market is 40% (20,000) of your total addressable market. 
• To calculate your SOM, work out how many of your SAM you can realistically serve. Your shop offers a measuring service and design consultation but only to people in a five-mile radius, which means you can serve 200 people a month. That would mean serving 2,400 people a year, which makes your SOM around 12% of your SAM.

Ideal customer

Your ideal customer is the person your product or service is aimed at. In the above example of the women’s clothes shop, the ideal customer is between 18 and 35, with disposable income. 

Customer analysis digs deeper than this, looking at your target customers’ education, income, job, relationship, buying concerns, interests and more.

You’ll find methods to help you discover your ideal customer and create customer personas in our guide on how to create a go-to-market strategy . 

Competitors

Competitive analysis is the process of identifying gaps in the market that your product or service can fill. It’s about finding out what the competition does so you gain a competitive advantage. 

In our guide on how to run a competitive analysis , we walk you through the process of analysing the finer details of your rivals in five steps:

Step 1: Identify & segment your competitors

Step 2: Analyse their market positioning

Step 3: Review their content & social media

Step 4: Check out what their customers are saying

Step 5: Walk through their customer journey

Use this information to show potential investors and talent that your business is going places. Our competitive analysis matrix template is a great starting point.

Once complete, take it a step further and create a simple visual that clearly shows where your company outperforms the competition. Here is a basic example of how to build out this visual.

It’s hard to ignore a chart that checks all of the boxes. 

4. Management and company structure

This section goes into detail on how your company is structured and who is running it. 

The structure here means two different things:

Team structure

Company structure.

First, you need to show your management structure: what each leader’s role is within the company. 

The simplest way to show your company hierarchy is with an organisational chart like this example:

For each member of your team, give details on their background and credentials with a bio that includes their:

• Professional background
• Achievements

Including this information gives readers assurances that the team you have in place is well-positioned to take the company forward. 

If there are any roles yet to be filled, give details on those positions.

Company structure is your legal structure. For example, limited company or sole trader.

Top Tip: If you’re yet to decide on a business structure, you can weigh up the pros and cons for setting up as a sole trader or limited company in our sole trader vs limited company guide.

If you plan on changing the structure of your company in the future, include details on this as well. For example, you may start as a private limited company (Ltd), but grow to become a public limited company with shares offered to members of the public. 

5. Service or product information

Here is where you get to wax lyrical about your offer and why it’s better than anything currently on the market. 

This section should include: 

• A description of your product or service . Details on what it is and what it does.
• How your product or service will be priced . Do you offer tiered pricing or a subscription model, for example.

Top Tip: Choosing the right pricing strategy is another key part of your go-to-market strategy. Will you price higher, lower, or similar to your competitors? What does the market demand? How does your pricing strategy reflect the value of your products and services? To learn more about how to answer these questions, read our 6-step guide on how to price a product and achieve profitable markups 💷

• How your products compare to competitors . List several competitor products along with their pros and cons.
• The production process . Details on how your products are created, how your source materials, quality control management, supply chain, inventory and bookkeeping.
• Product lifecycle . Details on upsells and cross-sells, research and development plans and time between purchases.
• Orders . Details on how you process and fulfil orders.
• Legal aspects . Details on any intellectual property or trademarks you own.
• Future products or services . If you plan on expanding your offer, give details on the offer and any research and development plans.

While there are formal and practical details to get across, the main point of this section is to get the reader excited about your product. To do this:

• Focus on the benefits . Describe how features give value to the customer. Here are some examples of features turned into benefits:
• Highlight your features. Get across what features your product or service has that the competition doesn’t. For example, your product might be the cheapest on the market or your turnaround time might be quicker or your expertise might allow you to offer a better level of service. 
• Get across why you’re needed . Shine the light on why your product or service is important to the market. This will be especially crucial if your startup is bringing a new invention to the market, or you’re creating an entirely new market. 

6. Marketing and sales strategy

If your business is going to be a success, you need a marketing strategy and sales plan that takes customers on a journey from awareness to purchase.

This section of your business plan should include:

• Your target market . Reiterating the information from the market analysis section.
• Which marketing channels you’ll use and which you’ll prioritise . For example, social media, word of mouth, Google Ads, print or radio advertising, exhibition stands or fairs, or referrals.
• Your plan to attract customers at launch . For example, you might run an opening discount offer to people who share your post on social media. Or give a voucher to every customer who refers a friend.
• Your plan to retain customers . For example, you may offer reward programs that allow customers to collect points for every purchase that can be redeemed for free or discounted products.
• Your expected results . What you hope to achieve from your marketing and how it will help you grow your business in terms of sales and visibility. If you’ve already started marketing your business, give details on what you’ve done and how it’s benefited the business.

7. Funding information 

Funding information is all about how much money you need to start your business, why you need it and how you’ll use any capital. 

The most critical part of this is your startup costs, which detail:

• The cost of producing your product or service
• Your fixed outgoings
• The cost of equipment, premises, supplies, insurance and other necessities required to run your business

Top Tip: If you’re yet to work out how much capital you need, check out our guide on how much it costs to start a business in the UK 📌

If you have the figures in place, you can set out presenting them. 

This section should be broken down into three parts: 

Current and future funding requirements

How funds will be used, current and future financial plans.

Include how much money you need to get your business off the ground, along with any funding you’ll need in the foreseeable future (up to five years). Be clear about why you’re requesting a loan or investment and outline what your needs are based on in your financial forecasts (we’ll get onto those soon). 

If you’re offering equity in exchange for investment, provide details on how an investor will be paid, as well as how and when they can cash out. For most small businesses, investors are paid in dividends (a share of company profits).

This part should explain how you plan to use the funds so that investors can determine if your business is a worthwhile investment. If you plan on using capital for several things, list and provide costs for each.

Again, putting these numbers into a visual format will help to more clearly outline your vision.

Finally, if applicable, provide information on any current investments and/or outstanding loan repayment plans. 

If you’re seeking investment or a loan for the first time, most lenders will have their own repayment schedules. However, you should detail any factors that may affect lenders, such as any plans to relocate or sell the business. 

Unlike other sections, funding information will need to be tailored to each financier. Investors will be interested in return on investment (ROI), whereas lenders will be interested in loan repayments. Create separate reports so that information is relevant to the reader. 

Top Tip: Investors and banks will also be interested in your business credit report (if you have one). To learn more about why your business credit score is important and how it’s determined, read our guide to everything you need to know about your business credit score (and how to improve it) 🙌

8. Financial projections

Financial projections supplement your funding information by showing potential lenders and investors that your business has a positive financial outlook.

This section should include the following key information: 

• Sales forecast. The amount of money you expect to raise from sales.
• Cash flow statement. Your cash flow balance and monthly cash flow patterns–how much is coming in and going out of your business every month.
• Balance sheet. An overview of the financial health of your business.
• Profit and loss statement . Your profit level and how much you expect to make based on projected sales, minus the cost of overheads and providing goods or services. 

Top Tip: Unless you’re an accountant, this part of the business plan can be overwhelming. To learn more about the fundamentals of accounting and how to create each of the aforementioned statements, read our complete guide to accounting for startups 📣 

If your business is already established, you’ll need to include financial figures from the last three years (or however long you’ve been trading if it’s less than three years) for all of the above, other than your sales forecast. 

If you’re a new business, your financial figures need to be predicted.

We’ve built several spreadsheet templates to help you generate the below financial reports:

• Three main financial statements (balance sheet, profit and loss statement, cash flow statement)
• Cash flow forecast
• Estimated sales

Forecasting your finances

Sales forecast.

Use your market analysis and knowledge of industry trends to estimate your future sales. For the first year, break these figures down into monthly sales, detailing what you’re selling, price points and how much you expect to sell. Moving into the second and third year of business, reduce forecasting to quarterly sales.

Cash flow statement

As a startup, your cash flow statement becomes a cash flow forecast based on your sales forecast, minus your expenses. Your expenses are the: 

• Fixed costs . Expenses that are the same or close the same every month (e.g. rent, insurance and utilities).
• Variable costs . Expenses that vary every month depending on demand (e.g.costs for raw materials, production costs, shipping and advertising).

Provide monthly cash flow patterns for the first 36 months. Keep in mind that, depending on your business, you may need to account for a lag in revenue. For example, if you provide a service to a client, their payment terms might dictate the invoice is paid 60 days after being sent.

Top Tip: To learn more about the various types of expenses and how to manage them, read our guide to small business expense management 🙌

Balance sheet

Create a balance sheet by calculating company assets, minus company liabilities.  

Company assets include:

• Property you own
• Equipment you own
• Unsold inventory
• Company vehicles you own
• Outstanding invoices

Company liabilities include:

• The amount you owe on a business loan
• The amount you owe unpaid invoices

Your balance is the difference between your assets total and your liabilities total.

Profit and loss statement

Use the figures from your sales forecast, expenses and cash flow statement to forecast how much you expect in profit and losses for your first three years in business. 

Your statement needs profit and loss projections for each year, as well as a total figure for the three years and should include a breakdown of:

• Sales . Based on figures from your sales forecast.
• Cost of goods sold (COGS) . The total cost of selling your product or service. If you need help with this, check out our guide on everything you need to know about cost of sales .
• Gross margin . Your sales minus your COGS. This is usually listed as a percentage, which you can calculate as: 

Gross margin (total revenue – COGS / total revenue x 100

For example, £500,000 total revenue, minus £300,000 leaves a gross margin of £200,000. 

£200,000 / £500,000 x 100 = 40%

• Operating expenses . A list of all your expenses, minus COGS (which you’ve already included), tax, amortisation and depreciation. List each expense individually and include a total sum. 
• Operating income statement . Your total operating expenses minus your COGS, before interest, tax, amortisation and depreciation.
• Total expenses . Your expenses including interest, tax, amortisation and depreciation.
• Net profit . Your monthly and yearly bottom line.

List financial figures using bullet points and include graphs to show how you predict your business will grow over your first three years of trading.

9. Appendix 

The appendix is the place to include any supporting documents. If a lender or investor hasn’t requested additional documentation, you can choose to leave this section out. But it’s a good place to strengthen your business plan, by including: 

• Reference letters
• Credit reports
• Permits and licences
• Client contracts or customer purchase orders
• Legal documents
• Associations and memberships  

Format the appendix with a clear table of contents and sections that correspond to the business plan section.

5 top tips for writing a compelling business plan 

• Keep it concise . Say what you need to say using simple language (no jargon) in as few words as possible. Your business plan only needs to get the key information across. The intricacies can come later. 
• Make it easy on the eye . Most lenders and investors will skim read your business plan, picking out relevant information as they go. Use headings to define sections and make key data stand out on each page by using bullet points for lists, bolding important sentences and using graphs and charts to add weight to financial figures. 
• Think about your audience . Consider who your business plan is aimed at and write with them in mind. If it’s an internal plan, think about what your team would want to gain from reading the document. If it’s for a lender or investor, think about the questions they might ask and which information is of particular interest to them. 
• Get the figures right. If you’re forecasting costs, sales and expenses, numbers will never be 100% accurate and it’s better to overestimate than underestimate. However, figures must be realistic and they must add up. Expect lenders and investors to scrutinise your calculations. Always double and triple check the numbers. 
• Proofread and proofread again . Don’t let your hard work be undone by something as simple as a typo or grammar mistake. Proofread your document from start to finish and then finish to start. Have someone you trust look over it too.

You now know what goes into a strong business plan, but you might be wondering what tools and frameworks you can use to bring it to life.

In this Tide Masterclass, our Events Manager Cuan Hawker is joined by Tom Horbye , Head of Campaigns Development at Seedrs .

Seedrs connects investors and businesses. They help startups raise capital and grow a supportive community. As they put it, it’s “equity crowdfunding done properly”. It’s unlikely anyone has seen and improved more business plans than Tom!

Tom will explain:

• Why you need a business plan 📘
• How to structure your plan 📃 Two tried-and-tested structures that work.
• What to include in your plan 📋 And what to leave out.
• Tools, help and next steps 🛠

This Masterclass is useful for anyone thinking about starting their own business in the UK.

A business plan is the cornerstone of your company. By clearly detailing your business objectives, strategies, marketing and sales plans, and financial forecasts you’ll be able to set out your business goals and keep track of your progress. 

Use this guide to complete the key components and put together a plan that a) brings clarity to your team, and b) provides assurances to lenders and investors that your business is a safe bet.

Photo by William Ivan, published on Unsplash

Valentine Hutchings

Head of Community and small business enthusiast

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What Is a Business Plan?

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

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

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

Key Takeaways

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

Investopedia / Ryan Oakley

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

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

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

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

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

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

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

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

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

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

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

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

2 Types of Business Plans

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

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

Why Do Business Plans Fail?

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

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

What Does a Lean Startup Business Plan Include?

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

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

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

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

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

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

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

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

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

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

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

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

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550+ Business Plan Examples to Launch Your Business

Need help writing your business plan? Explore over 550 industry-specific business plan examples for inspiration.

Find your business plan example

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View all sample business plans

Example business plan format

Before you start exploring our library of business plan examples, it's worth taking the time to understand the traditional business plan format . You'll find that the plans in this library and most investor-approved business plans will include the following sections:

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally only one to two pages. You should also plan to write this section last after you've written your full business plan.

Your executive summary should include a summary of the problem you are solving, a description of your product or service, an overview of your target market, a brief description of your team, a summary of your financials, and your funding requirements (if you are raising money).

Products & services

The products & services chapter of your business plan is where the real meat of your plan lives. It includes information about the problem that you're solving, your solution, and any traction that proves that it truly meets the need you identified.

This is your chance to explain why you're in business and that people care about what you offer. It needs to go beyond a simple product or service description and get to the heart of why your business works and benefits your customers.

Market analysis

Conducting a market analysis ensures that you fully understand the market that you're entering and who you'll be selling to. This section is where you will showcase all of the information about your potential customers. You'll cover your target market as well as information about the growth of your market and your industry. Focus on outlining why the market you're entering is viable and creating a realistic persona for your ideal customer base.

Competition

Part of defining your opportunity is determining what your competitive advantage may be. To do this effectively you need to get to know your competitors just as well as your target customers. Every business will have competition, if you don't then you're either in a very young industry or there's a good reason no one is pursuing this specific venture.

To succeed, you want to be sure you know who your competitors are, how they operate, necessary financial benchmarks, and how you're business will be positioned. Start by identifying who your competitors are or will be during your market research. Then leverage competitive analysis tools like the competitive matrix and positioning map to solidify where your business stands in relation to the competition.

Marketing & sales

The marketing and sales plan section of your business plan details how you plan to reach your target market segments. You'll address how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success.

The operations section covers the day-to-day workflows for your business to deliver your product or service. What's included here fully depends on the type of business. Typically you can expect to add details on your business location, sourcing and fulfillment, use of technology, and any partnerships or agreements that are in place.

Milestones & metrics

The milestones section is where you lay out strategic milestones to reach your business goals.

A good milestone clearly lays out the parameters of the task at hand and sets expectations for its execution. You'll want to include a description of the task, a proposed due date, who is responsible, and eventually a budget that's attached. You don't need extensive project planning in this section, just key milestones that you want to hit and when you plan to hit them.

You should also discuss key metrics, which are the numbers you will track to determine your success. Some common data points worth tracking include conversion rates, customer acquisition costs, profit, etc.

Company & team

Use this section to describe your current team and who you need to hire. If you intend to pursue funding, you'll need to highlight the relevant experience of your team members. Basically, this is where you prove that this is the right team to successfully start and grow the business. You will also need to provide a quick overview of your legal structure and history if you're already up and running.

Financial projections

Your financial plan should include a sales and revenue forecast, profit and loss statement, cash flow statement, and a balance sheet. You may not have established financials of any kind at this stage. Not to worry, rather than getting all of the details ironed out, focus on making projections and strategic forecasts for your business. You can always update your financial statements as you begin operations and start bringing in actual accounting data.

Now, if you intend to pitch to investors or submit a loan application, you'll also need a "use of funds" report in this section. This outlines how you intend to leverage any funding for your business and how much you're looking to acquire. Like the rest of your financials, this can always be updated later on.

The appendix isn't a required element of your business plan. However, it is a useful place to add any charts, tables, definitions, legal notes, or other critical information that supports your plan. These are often lengthier or out-of-place information that simply didn't work naturally into the structure of your plan. You'll notice that in these business plan examples, the appendix mainly includes extended financial statements.

Types of business plans explained

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

Traditional business plan

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

Business model canvas

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

The structure ditches a linear format in favor of a cell-based template. It encourages you to build connections between every element of your business. It's faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan . This format is a simplified version of the traditional plan that focuses on the core aspects of your business.

By starting with a one-page plan , you give yourself a minimal document to build from. You'll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan.

Growth planning

Growth planning is more than a specific type of business plan. It's a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, forecast, review, and refine based on your performance.

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

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

Download a free sample business plan template

Ready to start writing your own plan but aren't sure where to start? Download our free business plan template that's been updated for 2024.

This simple, modern, investor-approved business plan template is designed to make planning easy. It's a proven format that has helped over 1 million businesses write business plans for bank loans, funding pitches, business expansion, and even business sales. It includes additional instructions for how to write each section and is formatted to be SBA-lender approved. All you need to do is fill in the blanks.

How to use an example business plan to help you write your own

How do you know what elements need to be included in your business plan, especially if you've never written one before? Looking at examples can help you visualize what a full, traditional plan looks like, so you know what you're aiming for before you get started. Here's how to get the most out of a sample business plan.

Choose a business plan example from a similar type of company

You don't need to find an example business plan that's an exact fit for your business. Your business location, target market, and even your particular product or service may not match up exactly with the plans in our gallery. But, you don't need an exact match for it to be helpful. Instead, look for a plan that's related to the type of business you're starting.

For example, if you want to start a vegetarian restaurant, a plan for a steakhouse can be a great match. While the specifics of your actual startup will differ, the elements you'd want to include in your restaurant's business plan are likely to be very similar.

Use a business plan example as a guide

Every startup and small business is unique, so you'll want to avoid copying an example business plan word for word. It just won't be as helpful, since each business is unique. You want your plan to be a useful tool for starting a business —and getting funding if you need it.

One of the key benefits of writing a business plan is simply going through the process. When you sit down to write, you'll naturally think through important pieces, like your startup costs, your target market , and any market analysis or research you'll need to do to be successful.

You'll also look at where you stand among your competition (and everyone has competition), and lay out your goals and the milestones you'll need to meet. Looking at an example business plan's financials section can be helpful because you can see what should be included, but take them with a grain of salt. Don't assume that financial projections for a sample company will fit your own small business.

If you're looking for more resources to help you get started, our business planning guide is a good place to start. You can also download our free business plan template .

Think of business planning as a process, instead of a document

Think about business planning as something you do often , rather than a document you create once and never look at again. If you take the time to write a plan that really fits your own company, it will be a better, more useful tool to grow your business. It should also make it easier to share your vision and strategy so everyone on your team is on the same page.

Adjust your plan regularly to use it as a business management tool

Keep in mind that businesses that use their plan as a management tool to help run their business grow 30 percent faster than those businesses that don't. For that to be true for your company, you'll think of a part of your business planning process as tracking your actual results against your financial forecast on a regular basis.

If things are going well, your plan will help you think about how you can re-invest in your business. If you find that you're not meeting goals, you might need to adjust your budgets or your sales forecast. Either way, tracking your progress compared to your plan can help you adjust quickly when you identify challenges and opportunities—it's one of the most powerful things you can do to grow your business.

Prepare to pitch your business

If you're planning to pitch your business to investors or seek out any funding, you'll need a pitch deck to accompany your business plan. A pitch deck is designed to inform people about your business. You want your pitch deck to be short and easy to follow, so it's best to keep your presentation under 20 slides.

Your pitch deck and pitch presentation are likely some of the first things that an investor will see to learn more about your company. So, you need to be informative and pique their interest. Luckily, just like you can leverage an example business plan template to write your plan, we also have a gallery of over 50 pitch decks for you to reference.

With this gallery, you have the option to view specific industry pitches or get inspired by real-world pitch deck examples.

Ready to get started?

Now that you know how to use an example business plan to help you write a plan for your business, it's time to find the right one.

Use the search bar below to get started and find the right match for your business idea.

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How to Start a Business: A Step-by-Step Guide

Table of Contents

• You should prepare thoroughly before starting a business, but realize that things will almost certainly go awry. To run a successful business, you must adapt to changing situations.
• Learning how to start your own business involves conducting in-depth market research on your field and the demographics of your potential clientele is an important part of crafting a business plan.
• In addition to selling your product or service, you need to build up your brand and get a following of people who are interested in what your business offers.
• This article is for anyone who wants to learn how to start a business.

Starting a business can be hard work, but if you break down the process of launching your new company into individual steps you can make it easier. Rather than spinning your wheels and guessing where to start, you can follow the tried and true methods of entrepreneurs who’ve done it successfully. If you want to learn how to start your own business, follow this 10-step checklist to transform your business from a lightbulb above your head into a real entity.

Starting a business is a lot of work, but we’re here to help! Check out our useful resources for everything you need to successfully build your business from the ground up.

• 11 Things To Do Before Starting A Business
• Tax and Business Forms You’ll Need To Start A Business
• 20 Mistakes To Avoid When Starting A Business

How to start a business

1. refine your idea..

If you’re thinking about starting a business, you likely already have an idea of what you want to sell online , or at least the market you want to enter. Do a quick search for existing companies in your chosen industry. Learn what current brand leaders are doing and figure out how you can do it better. If you think your business can deliver something other companies don’t (or deliver the same thing, only faster and cheaper), you’ve got a solid idea and are ready to create a business plan. 

Define your “why?”

“In the words of Simon Sinek, ‘always start with why,’” Glenn Gutek, CEO of Awake Consulting and Coaching, told Business News Daily. “It is good to know why you are launching your business. In this process, it may be wise to differentiate between [whether] the business serves a personal why or a marketplace why. When your why is focused on meeting a need in the marketplace, the scope of your business will always be larger than a business that is designed to serve a personal need.” 

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Consider franchising.

Another option is to open a franchise of an established company. The concept, brand following and business model are already in place; you only need a good location and the means to fund your operation.

Brainstorm your business name.

Regardless of which option you choose, it’s vital to understand the reasoning behind your idea. Stephanie Desaulniers, owner of Business by Dezign and former director of operations and women’s business programs at Covation Center, cautions entrepreneurs against writing a business plan or brainstorming a business name before nailing down the idea’s value.

Editor’s note: Looking for a small business loan? Fill out the questionnaire below to have our vendor partners contact you about your needs.

Clarify your target customers.

Desaulniers said too often, people jump into launching their business without spending time to think about who their customers will be and why those customers would want to buy from them or hire them.

“You need to clarify why you want to work with these customers — do you have a passion for making people’s lives easier?” Desaulniers said. “Or enjoy creating art to bring color to their world? Identifying these answers helps clarify your mission. Third, you want to define how you will provide this value to your customers and how to communicate that value in a way that they are willing to pay.” 

During the ideation phase, you need to iron out the major details. If the idea isn’t something you’re passionate about or if there’s no market for your creation, it might be time to brainstorm other ideas.

Tip: To refine your business idea, identify your “why,” your target customers and your business name.

2. Write a business plan.

Once you have your idea in place, you need to ask yourself a few important questions: What is the purpose of your business? Who are you selling to? What are your end goals? How will you finance your startup costs? These questions can be answered in a well-written business plan . 

Fledgling business owners can make a lot of mistakes by rushing into things without pondering these aspects of the business. You need to find your target customer base. Who is going to buy your product or service? What would be the point if you can’t find evidence of a demand for your idea? 

This business plan template can help you launch and grow your business the right way.

Conduct market research.

Conducting thorough market research on your field and the demographics of your potential clientele is an important part of crafting a business plan. This involves conducting surveys, holding focus groups, and researching SEO and public data. 

Market research helps you understand your target customer — their needs, preferences and behavior — as well as your industry and competitors. Many small business professionals recommend gathering demographic information and conducting a competitive analysis to better understand opportunities and limitations within your market. 

The best small businesses have differentiated products or services from the competition. This significantly impacts your competitive landscape and allows you to convey unique value to potential customers.

Consider an exit strategy.

It’s also a good idea to consider an exit strategy as you compile your business plan. Generating some idea of how you’ll eventually exit the business forces you to look to the future. 

“Too often, new entrepreneurs are so excited about their business and so sure everyone everywhere will be a customer that they give very little, if any, time to show the plan on leaving the business,” said Josh Tolley, CEO of both Shyft Capital and Kavana. 

“When you board an airplane, what is the first thing they show you? How to get off of it. When you go to a movie, what do they point out before the feature begins to play? Where the exits are. During your first week of kindergarten, they line up all the kids and teach them fire drills to exit the building. Too many times I have witnessed business leaders that don’t have three or four predetermined exit routes. This has led to lower company value and even destroyed family relationships.” 

A business plan helps you figure out where your company is going, how it will overcome any potential difficulties, and what you need to sustain it. When you’re ready to put pen to paper, use a free template to help.

3. Assess your finances.

Starting any business has a price, so you need to determine how you will cover those costs. Do you have the means to fund your startup, or will you need to borrow money? If you’re planning to leave your current job to focus on your business, do you have savings to support yourself until you make a profit? Find out how much your startup costs will be. 

Many startups fail because they run out of money before turning a profit. It’s never a bad idea to overestimate the amount of startup capital you need, as it can take time before the business begins to bring in sustainable revenue. 

Perform a break-even analysis.

One way you can determine how much money you need is to perform a break-even analysis. This essential element of financial planning helps business owners determine when their company, product or service will be profitable. 

The formula is simple:

• Fixed Costs ÷ (Average Price Per Unit – Variable Costs) = Break-Even Point

Every entrepreneur should use this formula as a tool because it tells you the minimum performance your business must achieve to avoid losing money. Furthermore, it helps you understand exactly where your profits come from, so you can set production goals accordingly. 

Here are the three most common reasons to conduct a break-even analysis: 

Ask yourself: How much revenue do I need to generate to cover all my expenses? Which products or services turn a profit, and which ones are sold at a loss?

Ask yourself: What are the fixed rates, what are the variable costs, and what is the total cost? What is the cost of any physical goods? What is the cost of labor?

Ask yourself: How can I reduce my overall fixed costs? How can I reduce the variable costs per unit? How can I improve sales? 

Watch your expenses.

Don’t overspend when starting a business. Understand the types of purchases that make sense for your business and avoid overspending on fancy new equipment that won’t help you reach your business goals. Monitor your business expenses to ensure you are staying on track.

“A lot of startups tend to spend money on unnecessary things,” said Jean Paldan, founder and CEO of Rare Form New Media. “We worked with a startup with two employees but spent a huge amount on office space that would fit 20 people. They also leased a professional high-end printer that was more suited for a team of 100; it had key cards to track who was printing what and when. Spend as little as possible when you start, and only on the things essential for the business to grow and succeed. Luxuries can come when you’re established.”  

Using accounting software can streamline your expense tracking. Read our reviews of the best accounting software to learn more and find the right platform for your needs. Try starting with our Intuit QuickBooks Online review — this vendor is our top pick for small businesses.

Consider your funding options.

Startup capital for your business can come from various means. The best way to acquire funding for your business depends on several factors, including creditworthiness, the amount needed and available options.

• Business loans. If you need financial assistance, a commercial loan through a bank is a good starting point, although these are often difficult to secure. If you cannot take out a bank loan, apply for a small business loan through the S. Small Business Administration (SBA) or an alternative lender. [Read related article: Best Business Loans ]
• Business grants. Business grants are similar to loans, but do not need to be paid back. Business grants are typically very competitive and come with stipulations that the business must meet to be considered. When securing a small business grant , look for ones specific to your situation. Options include minority-owned business grants, grants for women-owned businesses and government grants .
• Startups that require significant funding up front may want to bring on an angel investor . Investors can provide several million dollars or more to a fledgling company in exchange for a hands-on role in running your business.
• Alternatively, you can launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers. Crowdfunding has helped numerous companies in recent years, and dozens of reliable crowdfunding platforms are designed for different types of businesses. 

You can learn more about each of these capital sources and more in our guide to startup finance options . 

Choose the right business bank.

When you’re choosing a business bank , size matters. Marcus Anwar, co-founder of OhMy Canada, recommends smaller community banks because they are in tune with the local market conditions and will work with you based on your overall business profile and character. 

“They’re unlike big banks that look at your credit score and will be more selective to loan money to small businesses,” Anwar said. “Not only that, but small banks want to build a personal relationship with you and ultimately help you if you run into problems and miss a payment. Another good thing about smaller banks is that decisions are made at the branch level, which can be much quicker than big banks, where decisions are made at a higher level.” 

Anwar believes that you should ask yourself these questions when choosing a bank for your business: 

• What is important to me?
• Do I want to build a close relationship with a bank that’s willing to help me in any way possible?
• Do I want to be just another bank account, like big banks will view me as? 

Ultimately, the right bank for your business comes down to your needs. Writing down your banking needs can help narrow your focus to what you should be looking for. Schedule meetings with various banks and ask questions about how they work with small businesses to find the best bank for your business. [Read related article: Business Bank Account Checklist: Documents You’ll Need ]

Financially, you should perform a break-even analysis, consider your expenses and funding options, and choose the right bank for your business.

4. Determine your legal business structure.

Before registering your company, you need to decide what kind of entity it is. Your business structure legally affects everything from how you file your taxes to your personal liability if something goes wrong. 

• Sole proprietorship: You can register for a sole proprietorship if you own the business independently and plan to be responsible for all debts and obligations. Be warned that this route can directly affect your personal credit.
• Partnership: Alternatively, as its name implies, a business partnership means that two or more people are held personally liable as business owners. You don’t have to go it alone if you can find a business partner with complementary skills to your own. It’s usually a good idea to add someone into the mix to help your business flourish.
• Corporation: If you want to separate your personal liability from your company’s liability, consider the pros and cons of corporations (e.g., an S corporation or C corporation ). Although each type of corporation is subject to different guidelines, this legal structure generally makes a business a separate entity from its owners. Therefore, corporations can own property, assume liability, pay taxes, enter contracts, sue and be sued like any other individual. “Corporations, especially C corporations, are especially suitable for new businesses that plan on ‘going public’ or seeking funding from venture capitalists in the near future,” said Deryck Jordan, managing attorney at Jordan Counsel.
• Limited liability company: One of the most common structures for small businesses is the limited liability company (LLC). This hybrid structure has the legal protections of a corporation while allowing for the tax benefits of a partnership. 

Ultimately, it is up to you to determine which type of entity is best for your current needs and future business goals. It’s important to learn about the various legal business structures available. If you’re struggling to make up your mind, discussing the decision with a business or legal advisor is a great idea.

Did you know? You need to choose a legal structure for your business, such as a sole proprietorship, partnership, corporation or LLC .

5. Register with the government and IRS.

You will need to acquire business licenses before you can legally operate your business. For example, you must register your business with federal, state and local governments. There are several documents you must prepare before registering.

Articles of incorporation and operating agreements

To become an officially recognized business entity, you must register with the government. Corporations need an articles of incorporation document, which includes your business name, business purpose, corporate structure, stock details and other information about your company. Similarly, some LLCs will need to create an operating agreement.

Doing business as (DBA)

If you don’t have articles of incorporation or an operating agreement, you will need to register your business name, which can be your legal name, a fictitious DBA name (if you are the sole proprietor), or the name you’ve come up with for your company. You may also want to take steps to trademark your business name for extra legal protection. 

Most states require you to get a DBA. You may need to apply for a DBA certificate if you’re in a general partnership or a sole proprietorship operating under a fictitious name. Contact or visit your local county clerk’s office to ask about specific requirements and fees. Generally, there is a registration fee involved. 

Employer identification number (EIN)

After you register your business, you may need to get an employer identification number from the IRS. While this is not required for sole proprietorships with no employees, you may want to apply for one anyway to keep your personal and business taxes separate, or to save yourself the trouble if you decide to hire someone later on. The IRS has provided a checklist to determine whether you will require an EIN to run your business. If you do need an EIN, you can register online for free. 

Income tax forms

You must file certain forms to fulfill your federal and state income tax obligations . Your business structure determines the forms you need. You will need to check your state’s website for information on state-specific and local tax obligations. Once you set this all up, the best online tax software can help you file and pay your taxes quarterly and annually.

“You might be tempted to wing it with a PayPal account and social media platform, but if you start with a proper foundation, your business will have fewer hiccups to worry about in the long run,” said Natalie Pierre-Louis, licensed attorney and owner of NPL Consulting. 

Federal, state, and local licenses and permits

Some businesses may also require federal, state or local licenses and permits to operate. Your local city hall is the best place to obtain a business license. You can then use the SBA’s database to search for state and business type licensing requirements. 

Businesses and independent contractors in certain trades are required to carry professional licenses. A commercial driver’s license (CDL) is one example of a professional business license. Individuals with a CDL can operate certain types of vehicles, such as buses, tank trucks and tractor-trailers. A CDL is divided into three classes: Class A, Class B and Class C. 

You should also check with your city and state to find out if you need a seller’s permit that authorizes your business to collect sales tax from your customers. A seller’s permit goes by numerous names, including resale permit, resell permit, permit license, reseller permit, resale ID, state tax ID number, reseller number, reseller license permit or certificate of authority. 

It’s important to note that these requirements and names vary from state to state. You can register for a seller’s permit through the state government website of the state(s) you’re doing business in. 

Jordan says that not all businesses need to collect sales tax (or obtain a seller’s permit).

“For example, New York sales tax generally is not required for the sale of most services (such as professional services, education, and capital improvements to real estate), medicine or food for home consumption,” Jordan said. “So, for example, if your business only sells medicine, you do not need a New York seller’s permit. But New York sales tax must be collected in conjunction with the sale of new tangible personal goods, utilities, telephone service, hotel stays, and food and beverages (in restaurants).”

Register key documents like articles of incorporation or an operating agreement, a DBA, an EIN, income tax forms, and other applicable licenses and permits.

6. Purchase an insurance policy.

It might slip your mind as something you intend to get around to eventually, but purchasing the right insurance for your business is an important step to take before you officially launch. Dealing with incidents such as property damage, theft or even a customer lawsuit can be costly, and you need to be sure that you’re properly protected. 

Although you should consider several types of business insurance , there are a few basic insurance plans that most small businesses can benefit from. For example, if your business will have employees, you will at least need to purchase workers’ compensation and unemployment insurance.

You may also need other types of coverage, depending on your location and industry, but most small businesses are advised to purchase general liability (GL) insurance, or a business owner’s policy. GL covers property damage, bodily injury, and personal injury to yourself or a third party.

If your business provides a service, you may also want professional liability insurance. It covers you if you do something wrong or neglect to do something you should have done while operating your business.

7. Build your team.

Unless you’re planning to be your only employee, you’ll need to recruit and hire a great team to get your company off the ground. Joe Zawadzki, general partner at AperiamVentures, said entrepreneurs need to give the “people” element of their businesses the same attention they give their products. 

“People build your product,” Zawadzki said. “ Identifying your founding team , understanding what gaps exist, and [determining] how and when you will address them should be top priority. Figuring out how the team will work together … is equally important. Defining roles and responsibilities, division of labor, how to give feedback, or how to work together when not everyone is in the same room will save you a lot of headaches down the line.”

8. Choose your vendors.

Running a business can be overwhelming, and you and your team probably aren’t going to be able to do it all on your own. That’s where third-party vendors come in. Companies in every industry, whether that’s HR or business phone systems , exist to partner with you and help you run your business better. For example, with a business phone system, you can design an IVR system to automatically route your callers to the right representatives.

When you’re searching for B2B partners, choose carefully. These companies will have access to your most vital and potentially sensitive business data, so finding someone you can trust is critical. In our guide to choosing business partners , our expert sources recommended asking potential vendors about their experience in your industry, their track record with existing clients, and what kind of growth they’ve helped other clients achieve. 

Not every business will need the same type of vendors, but there are common products and services that almost every business will need. Consider the following functions that are a necessity for any type of business.

• Enabling multiple customer payment types: Offering multiple payment options will ensure you can make a sale in whatever format is easiest for the target customer. Compare options to find the best credit card processing provider to ensure you’re getting the best rate for your business. That’s because small business credit card processing is often a direct route to more revenue and a larger customer base.
• Taking customer payments: Set up a point-of-sale (POS) system so that you have a state-of-the-art interface for making sales. The best POS systems couple this payment technology — which largely overlaps with credit card processing — with inventory management and customer management features. As such, POS systems are especially important if you plan to sell products instead of offering services.
• Managing finances: Many business owners manage their own accounting functions when starting their business, but as your business grows, you can save time by hiring an accountant , or by choosing the right accounting software provider .

9. Brand yourself and advertise.

Before you start selling your product or service, you need to build up your brand and get a following of people who are ready to jump when you open your literal or figurative doors for business.

• Company website: Take your reputation online and build a company website . Many customers turn to the internet to learn about a business, and a website is a digital proof that your small business exists. It is also a great way to interact with current and potential customers.
• Social media: Use social media to spread the word about your new business, perhaps as a promotional tool to offer coupons and discounts to followers once you launch. The best social media platforms to use will depend on your target audience.
• CRM: The best CRM platforms allow you to store customer data to improve how you market to them. A well-thought-out email marketing campaign can do wonders for reaching customers and communicating with your audience. To be successful, you will want to strategically build your email marketing contact list .
• Logo: Create a logo to help people easily identify your brand, and use it across all of your platforms.

Keep your digital assets up to date with relevant, interesting content about your business and industry. According to Ruthann Bowen, chief marketing officer at EastCamp Creative, too many startups have the wrong mindset about their websites. 

“The issue is they see their website as a cost, not an investment,” Bowen said. “In today’s digital age, that’s a huge mistake. The small business owners who understand how critical it is to have a great online presence will have a leg up on starting out strong.” 

Creating a marketing plan that goes beyond your launch is essential to building a clientele because it should continually get the word out about your business. This process is just as important as providing a quality product or service, especially in the beginning. 

Ask customers to opt into your marketing communications.

As you build your brand, ask your customers and potential customers for permission to communicate with them. The easiest way to do this is by using opt-in forms of consent. These forms allow you to contact them with further information about your business, according to Dan Edmonson, founder and CEO of Dronegenuity. 

“These types of forms usually pertain to email communication and are often used in e-commerce to request permission to send newsletters, marketing material, product sales, etc. to customers,” Edmonson said. “Folks get so many throwaway emails and other messages these days that, by getting them to opt in to your services transparently, you begin to build trust with your customers.” 

Opt-in forms are a great starting point for building trust and respect with potential customers. Even more importantly, these forms are required by law. The CAN-SPAM Act of 2003 sets requirements for commercial email by the Federal Trade Commission. This law doesn’t just apply to bulk email; it covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” Each email violating this law is subject to fines of more than $40,000.

Tip: Create a strategic marketing campaign that combines various marketing channels, like a company website, social media, email newsletters and opt-in forms.

10. Grow your business.

Your launch and first sales are only the beginning of your task as an entrepreneur. To make a profit and stay afloat, you always need to be growing your business. That takes time and effort, but you’ll get out of your business what you put into it. 

Collaborating with more established brands in your industry is a great way to achieve growth. Reach out to other companies and ask for some promotion in exchange for a free product sample or service. Partner with a charity organization, and volunteer some of your time or products to get your name out there. 

While these tips will help launch your business and get you set to grow, there’s never a perfect plan. You want to ensure you prepare thoroughly for starting a business, but things will almost certainly go awry. To run a successful business, you must adapt to changing situations. 

FAQs about starting a business

What are the four basics for starting a business.

The four basics for starting a business are your business name, business structure, business registration certificate and all your other licenses. You must take the proper legal and regulatory steps in each of these four areas before you launch your business. Obtaining external funding and putting together a business plan are also smart moves, but they aren’t legal prerequisites.

How can I start my own business with no money?

You can launch a successful business without any startup funds. Work on a business idea that builds on your skill set to offer something new and innovative to the market. While developing a new business, keep working in your current position to reduce the financial risk.

Once you’ve developed your business idea and are ready to start on a business plan, you’ll need to get creative with funding. You can raise money through investments by pitching your idea to financial backers. You could also gather funding through crowdsourcing platforms like Kickstarter, or set aside a certain amount of money from your weekly earnings to put toward a new business. Finally, you can seek loan options from banks and other financial institutions to get your company up and running.

Check out our list of low-cost business ideas for inspiration on how to start a new company when you’re on a tight budget.

What is the easiest business to start?

The easiest business to start is one that requires little to no financial investment upfront, and no extensive training to learn the business. A dropshipping company, for example, is one of the easiest types of new business to launch. Dropshipping requires no inventory management, which saves you the hassle of buying, storing and tracking stock. 

Instead, another company fulfills your customer orders at your behest. This company manages the inventory, packages goods, and ships out your business orders. To start, create an online store by selecting curated products from the catalog available through partners.

Check out our list of businesses you can start quickly for ideas on how to launch your next business with ease.

Which types of businesses can I start from home?

In today’s world of remote work, you may be thinking of an online business idea . Any online-only business that doesn’t require inventory should be easy to start from home. Ideas that fall within this category include but aren’t limited to copywriting businesses, online tutoring operations and dropshipping businesses. Anything you’re good at or passionate about that you can do from home, and for which demand exists, can make for a great home business. 

When is the best time to start a business?

Each person’s ideal timeline for starting a new business will be different. Start a business only when you have enough time to devote your attention to the launch. If you have a seasonal product or service, then you should start your business one quarter before your predicted busy time of the year. Spring and fall are popular times of year to launch for nonseasonal companies. Winter is the least popular launch season because many new owners prefer to have their LLC or corporation approved for a new fiscal year.

Max Freedman and Skye Schooley also contributed to this article. Source interviews were conducted for a previous version of this article.

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Business Plan: A Beginner’s Guide with Types and Templates

Setting up your own company, business, or startup could be an overwhelming process. It involves a variety of operations that need to be carried out in areas such as legal, financial, sales, among others. All these operations are a part of the Business Plan. The question here is what is a business plan and how do you go about writing it?

This article takes you on a detailed journey of writing a business plan apart from the following points:

• Understanding a business plan
• Elements of a business plan
• Types of business plans
• We also see why making a business plan is important
• How to write a step-by-step business plan?
• We also look into why some business plans fail.
• Business plans FAQ

What Is a Business Plan?

The startup of a company requires knowing and addressing many problems — legal issues, finance, sales and commercialization, protection of intellectual property, protection of liability, and more.

A business plan is defined as a written document that comprises business details, the company’s goals, and methods to achieve these goals. A business plan contains a comprehensive framework for the company in terms of marketing, finance, and operations.

Business plans serve a significant purpose. They are documents that can assist in inviting potential investment before a substantiated record of success has been ascertained. It helps create a good platform for businesses to continue to pursue targets.

Drafting a business plan is specifically useful for a startup or new enterprise. Optimally, the plan will be periodically restructured to see if objectives have been achieved or changed throughout the years. The companies may also decide after some time to redraw and upgrade the business plan to give a new direction after establishment.

Understanding Business Plans

Fundamentally, a business plan is a key document that must be put in place before start-up activities. Therefore, before new companies can provide their capital, banks and risk-capital companies often make a viable business plan a necessary precondition.

It is highly advisable to define a business plan before commencing any operations of the business. There have been examples of companies not lasting long without a competent business plan. It helps the businesses take decisions on matters of investments, learn about potential risks and adapt to new trends.

A strong business plan defines a company's identity, what it does, how it does it, and where it's headed. It is easier to grasp a company plan if you keep this history in mind. The core team or the people in a company's internal dynamics shapes its policies and objectives, or participates in the capital budgeting process must be able to comprehend a business plan.

Here’s a step-by-step guide to understanding the complicated and detailed document.

Executive Summary

Being the first section in a business plan, it comprises the summary of the entire strategy of the company. This 2 to 3-page summary presents the vision statement and brings into perspective the rest of the strategy.

Table of Contents

This comes after the executive summary. This should be looked into carefully to know if there are any particular aspects you would want to know the details about.

The next few sections can tell you a lot about who the adversaries are and what sort of products and services does the company offer. Any kind of issues that the company faces or even its capabilities are mentioned in this section.

Look for Management Capabilities

Within these sections, there would be information about the people playing key roles in the company. You can know about their qualifications and expertise from the document. These spaces will also consist of the description of the location of the company. It would be good to know about it to assess if it is strategically situated.

Operations Section

This section comprehensively describes the manufacturing, marketing, selling of products carried out by the business. Its customer support and other services can be assessed from this section.

Finances and Forecast Section

This could be helpful in understanding the revenue, expenditure, and other critical financial aspects of the organization. A complete chart of costs, risk analyses, and earnings estimates can be accessed through this section. This space also provides details about how these important digits were arrived at.

Final Section

This helps you understand the company’s targets and projections and the measures they wish to take for accomplishing the same. This will also share a glimpse of the ways in which the resources or funds from the investors will be used.

Elements of a Business Plan

Typically, a 20-25 page document, business plan varies hugely based on the type and size of the business. The details or the depth of the plan could be diverse and entail different kinds of elements. However, there are some crucial elements that come under the main plan and are also a part of the appendices.

Although, business plans are different, here are some common critical elements that are included in all the plans. Let’s look at them one by one:

This is the point that elaborately explains the mission of the company. Besides, it also includes information about the company’s management leaders, employees, functions.

Products and Services

This point includes all the products or services that the company is offering. Apart from the names of these products, services, it also comprises the details pertaining to the product such as the pricing, longevity, and benefits that the customers can avail of from its services.

Other information that could be a part of this point, includes production and manufacturing processes. It may also showcase any patents or proprietary technology that the company has acquired. A research and development report is also a part of this element.

Market Analysis

A company must have a thorough understanding of its sector as well as its intended audience. A market analysis will show you the expected demand for the products that the company sells. It will also help you know what difficulties you could face from the competitors. This will also assist you with an insight into the expertise of the contemporaries along with their strengths and drawbacks.

Marketing Strategy

This section explains how the organization plans to recruit and retain customers, as well as how it plans to reach out to them. This necessitates the creation of a distinct distribution channel. It will also detail branding, brand awareness and email marketing campaign plans , as well as the forms of media via which such efforts will be carried out.

Financial Planning

The organization should incorporate its financial planning and future estimates in order to persuade the other parties to review its business plan. The established companies may include income statements , balance sheets, and so on; On the other hand, new enterprises will include objectives and projections for the initial years of operation, as well as venture capitalists.

Every good business should have a budget in place. This comprises expenses such as employment, innovation, production, advertising, and any other business-related expenditure.

Types of Business Plans

The company management and investors can use business plans to help them start and grow their company. A company prepares a business plan to describe the objectives that will forecast and organize for expansion and to understand each area of the firm. A business plan is written by competent entrepreneurs to direct management and attract investment funds.

Business plans are drawn based on the requirements of the company. With this in mind, there are the following types of business plans:

Business Plans for Startups

A start-up business plan should outline the actions necessary to launch a new firm. It also includes a financial study with spreadsheets that describe financial concepts such as income, profit, and cash flow estimates. This may also be used by potential investors to gain an insight into the financial status of the startup. The startup business plans give clarity on market analysis, the product or service that the startup will provide besides the set goals.

Internal Business Plans

Internal plans detail project marketing, staffing, and technology costs. This document will summarise the company's present situation, including administrative performance and profitability, before determining whether and how the company would repay any project-related cash. These are written for a limited audience within the company, such as the marketing team evaluating a proposed initiative. They usually comprise a market study that shows the intended audience, competitive landscape, and the market's beneficial impact on corporate profits.

Business Plans for Strategic Business Development

A strategic business plan lays out a structural plan by providing a high-level picture of the company's objectives and how it moves to achieve them. While the framework of a strategic business plan varies per firm, typically contain five elements:

• The vision statement
• The mission statement
• Defining the key performance factors
• tactics for accomplishing objectives
• Timeframe for implementation

A strategic business plan engages personnel at all levels of the organization in the big picture, motivating them to collaborate to achieve the company's objectives

Business Plans for Scalability

A feasibility or scalability business plan considers two key issues regarding a planned business endeavor:

• If there will be buyers for the products or services that the company intends to sell.
• Whether or not the enterprise will be profitable.

This plan highlights the details of the demand of the product or service and the associated target audience for the said product. A feasibility study typically concludes by providing recommendations for the future.

Business Plans for Operations

These include features regarding the operations of the company and hence, the name. The plan specifies the deployment benchmarks and timelines for the future year. It also entails employee responsibilities.

Business Plans for Growth

These are also known as the plans for expansion and are created for both, internal as well as external use. This plan features the details around the following points:

• Detailed and specific highlights about the company
• Details of officials as the company

It is important to chalk out this plan and give the relevant corporate details to convince the potential investors.

The Importance of Making a Business Plan

Entrepreneurs frequently utilize business plans. It is doable to travel without a business strategy, but doing so will simply raise the chances of wandering aimlessly along the trip. This helps them to steer clear of any potential problems and putting themselves in a situation where they may have to keep asking for directions.

Therefore, business plans are necessary to help business owners in observing the broader picture, planning for the future, making critical decisions, and increasing their overall chances of success.

Defining organizational goals

A small business, a startup, an established business; all need a business plan. When it comes to small businesses, the business plans can be helpful in structuring the goals of the organization. It can allow you to monitor and govern everything you've strived to produce if you use it correctly and use it on a frequent basis. Finally, it can serve as a reliable tool for management to stay on track with administrative milestones.

To assist you in making important decision

The fundamental objective of a good business plan is to assist business owners in making better decisions. Companies don't always have the opportunity to take time and analyzing all of the implications of a decision. A company plan can help with this. Management frequently deals with a never-ending exercise in making decisions and dealing with crises. Developing a business plan involves estimating the outcome with some of the most important company actions.

Minimize Risks

Handling the operations of a business can involve risky steps, but it tends to become much more sustainable with a well-thought business strategy. Developing accounting period predictions, logistics planning, and a thorough knowledge of the future outlook can assist with mitigating the risk of a job that is intrinsically insecure.

A business plan makes it easier to find better solutions, leads to better decisions, and see a clearer picture of the organizational future.

Obtain Funding

While there are multiple activities for which a business plan is required, a major reason why you may need it is to secure funding from venture capitalists. The most effective means of demonstrating your competence is through a business plan, which is usually a prerequisite for anyone seeking outside funding. And anyway, anyone considering investing in your company will want to know it's in fantastic form and will be profitable in the long run.

To serve as a resource for service providers

Contractors, freelancers, and other experts are commonly a part of an organization. They are important people as they help with some of the crucial duties such as bookkeeping, legal aid, consulting, and so on. Having a business plan in place will help them get a fair idea of the key portions of areas where they are required.

To prevent unnecessary blunders

A business plan can help understand the reasons and avoid potential mistakes and blunders. Some of the most commonly observed mistakes could be:

• Capital troubles: Cash flow troubles or just running out of money are both examples of a lack of capital.
• No Appreciation: Nobody buys what you're selling since there isn't a market for it.
• Insufficient team: This emphasizes the significance of employing the correct personnel to assist you in running your company.
• Excessive competition: It's difficult to make a consistent profit when there's huge competition.

5 Quick and Easy Ways to Create an Excellent Business Plan

Let's speak about certain guidelines that will make the entire company planning process more efficient before you start writing your business plan. We have put together the following points to direct you towards writing a goal-oriented business plan.

Keep it concise

A long business plan which has over 50 pages will not only consume a lot of time in drafting but may not essentially be efficient in the long run. The foundation of writing a business plan is to quickly write it and move on with the tasks defined in it.

Moreover, it is a tool to help the company grow; it will require to be fine-tuned continuously, and therefore, it is best to keep it short and precise.

Audience-centric

Make your business plan by keeping in mind the audience who would be referring to it for accomplishing their goals. An example is if the business plan is aimed at readers that consist of investors as the primary audience, it would be wise to draft it in a language that would be comprehended by them.

Test viability of your business

The more tests you conduct for the elements mentioned in your plan, the better the business plan. Elements of a business plan, as we know now, could include anything from mission and vision statement to products and services. It is recommended you get approval or feedback on the elements included in your business plan.

Determine your aims and objectives

You should have a clear idea of what you want to obtain out of your company from the start. Determine if you are looking for a complete overhaul of your business?  Or if you are aiming to expand your employee base?  Knowing what you want to achieve can help you design a company plan that is tailored to these objectives.

Don’t Get Discouraged

You might be a new entrepreneur who has just started to look for setting up a business plan. No matter, how daunting this may seem in the beginning, it is good you do not get intimidated by the process.

Although initially writing a business plan may seem difficult, all you need is to be confident and expert in your field. If you're an expert in your field and know everything there is to know about it, then this is all that takes to establish a business strategy.

With this information, we move on to the main section of this article which explains a step-by-step process to write a business plan.

Download Business Plan Template

How to write a business plan, step by step.

While writing a business plan, there could be two scenarios that could be considered:

• Traditional Business Plan
• Lean Startup Plan

Let’s look at each of these in detail:

Traditional Business Plan Format

If you're particularly looking for specifics, want a complete plan, or plan to seek funding from conventional sources, you could choose a typical business plan structure. Instead of following the conventional model, focus on the portions that are most relevant to your business and needs. You could use a combination of the sections in the conventional plan to describe how your company can benefit the reader.

Executive Summary: Points that can go here are:

• Mission statement
• Talk about your products and services
• Information regarding the key personnel, employees
• Location of the company
• Also, some high-level plans for growth, in case you wish to seek funds.

Company Details: This includes all the minute details of your company. Talk about what kind of solutions your company provides. Points to be included here are:

• Problems that you can solve
• Enlist your consumers or businesses you wish to serve
• Mention the distinguishing feature or the USP of your company
• Mention the expertise held by the key people involved
• Include a complete overview of the strengths of your company

Market Analysis: You must closely understand your business perspective and the target market. Through thorough competitive analysis, you could assess the market trends and seek answers to the following questions:

• What are the current trends in the market?
• What are the success mantras of other companies?
• Will you be able to achieve what they are doing?
• Do you need more expertise to do it better?

Company and Management: This section is about informing your audience about how and who is in charge of the business. This would be an apt space to describe the points mentioned:

• Company’s legal structure.
• Declare of your company is a general or limited partnership.
• Determine if you want your business to be a C or S corporation
• Also, state if you are the only proprietor or a Limited Liability company.

Products and Services: This section explain the products and services that you wish to sell. Include these under this section:

• Let your audience know of your planning to get a patent, intellectual property, or copyright fr your products.
• Explain the R&D process undertaken with regards to a particular product or service.
• Also, describe the product lifecycle and the benefits of your product.

Marketing and Sales: With the varying requirements per company, the marketing strategies can be unique to all. Based on your domain and industry, you must explain the following points in this section:

• Describe the appeal and retention of customers
• How a sale really is going to take place
• Make revenue projections and forecasts

Funding Application/Request: This area will explain your funding requirements in case you apply for funding. You should also make these points clear:

• How often and how much funding you shall require
• Explain how you plan to use it over the years (providing the number of years would be appropriate)
• Mention the terms and conditions agreeable by you
• If you would want to take a debt or an equity
• Explain your expenses like your bills, employee salaries, purchase of new equipment, etc.
• Always mention your debt repayment strategies.

Financial/Revenue Projections: This goes hand-in-hand with your funding request. It brings forth your company’s stability, sustainability, and growth prospects. Here’s what should go in this section:

• All the revenue reports, balance, and income statements for the past 5 years in case yours is an established company.
• Enlist any guarantees you can levy against a loan
• Explain your financial growth plan for the next 5 years.
• Income forecasts, expenditures, and budgets
• Present a graphical analysis through charts to depict your monthly/quarterly growth plan.

Appendix: This section could be used to attach other essential documents such as:

• Legal documents
• Product pictures, if demanded.
• Credit history
• Licenses, etc.

Let’s look at the startup business plan and its design.

Startup Business Plan

Although all the business plans comprise of the nice segments, the startup business plan can touch upon each one of those without going much into the details. Moreover, as compared to the traditional plan, this one provides you a lot more agility in terms of making amendments. This would be beneficial as a startup frequently undergoes a lot of changes in its initial years.

Let’s look at the components you’ll be adding to your startup business plan:

Customer Segment: This section explains who your target customers or audience will be. While there could be numerous segments enlisted in this section, it would be wise to identify the ones that your business will most appeal to. Identifying them and naming them here is crucial.

Value Proposition: This is intended for the different audiences your business wishes to serve, The value your business holds or offers to them can be different. In this section, you describe how and what value proposition you will be making for each of those businesses/customers. It is important to figure this out and write it down here as that indicates the value-add your company holds.

Channels: This displays the communication channels you will be using to covey your propositions to your customers.

Customer Relationships: This will highlight your ways of maintaining communication with your customers. You can list down the ways through which you shall be communicating: whether they will be informed through automated emails or will you be connecting with them personally, all goes in here.

Revenue Streams: This point elaborates on where your revenue or income is coming from. An already established business may have multiple sources of income but if yours is a startup, then it may have only one. Nevertheless, you must identify and mention it here.

Key Resources: The resources in your company need to be mentioned here; this includes but is not limited to your employees, key personnel, infrastructure, among others.

Activities: Details of all the crucial activities that strengthen your business or lead it to a meritorious milestone need to go in here.

Important Partnerships: Most of the new businesses invite partnerships and have shared resources. There are certainly some other entities or businesses involved and they must find a mention in this section. These include all your vendors, suppliers, manufacturers, or other people you are working with.

Cost Structure: Once you have identified and defined your business’s requirements and infrastructure, it is time to get the details of the costs of your business. You can also give away the plans or strategies you have to optimize those associated costs.

Why do Business Plans Fail?

While there are numerous business plans drafted each year, only a few of these companies make it to the success ladder. While such business plans can include good suggestions, they fall short. The company’s projects also tend to meet the same fate; despite the brilliant ideas, the project collapses. The reasons for this failure could be many. Wouldn’t it be great if we could foresee them and avoid them before they cause failure?

Here are some reasons that could lead to a failed business plan:

Unreal objectives and ambitions

It may not always be a great idea to reach out for the highest goals in the realm of the business plan. Although high goals are important, the path to reach these goals must be realistic and achievable. You might aspire to make a grand sale of say, thousands of your products in a month but that may not always be attainable. It s, therefore, important to work out a business plan to make it realistic to avoid failures in the future.

Lack of Motivation

Businesses are driven on tonnes of motivation, which in turn is effective on the productivity of the company. The entrepreneurs with a solid determination and motivated team have been great examples of turning their ventures into grand success stories in a relatively short time. Not only does the leader need to be motivated, but the motivation also needs to flow on to his team and all employees to make a difference to the overall output. A company where the leaders lack motivation could be walking slowly towards failure.

Lack of Proper Budgeting

Budgeting is a vital aspect of a business, and a lack of real-world budgeting is a factor to avoid. It is not advisable to always go for a loan to launch the company every time. Unless you can get your theory to move in the right direction, your financial support may evaporate. Therefore, the cost of building a company must be determined and maintained through the first year. All the cost factors should be worked out much in advance to keep away disappointments in the later stages of development.

Inadequate Market Research

Market research is all about acquiring enough information and understanding the current trends in the market. Your plan should be aligned with the kind of market research you have done. Being a vital part of a new company’s business plan, market research needs to provide you a competent data to battle out the odds that you may face. Sufficient information in this regard will help you establish a plan that’s effective. Not doing so may lead you to scrap it and restart the work with greater amounts of time and effort.

Business Plans FAQ

Now that you have a fair idea of how to go about writing a business plan, let’s look around at some of the frequently asked questions:

Do I have to include all the sections?

A clear answer is No. You need not include all the sections, but work out only those that are relevant to your company and business. With the nine sections, you are trying to give away maximum relevant information in the plan; however, not all of the sections would need to be addressed.

How long should the plan be?

Your plan only needs to have all the information composed well into one document. There is no specific length or the number of pages that it should have. When you are sure that it mentions all the required information, you are good to go.

Would be a good idea to start a business in an economically challenged scenario?

Although economic ups and downs could be dissuading, especially while starting a new business. Our take is that any business that can compete well with the existing prices and offers great value to customers can make it big.

How can Deskera Help You with Your Business Plan?

Deskera offers you to learn the concepts of business and get acquainted with the top software applications for startups and can also help with accounting for startups . You may refer to Deskera’s blogs to get a better grip over business topics such as How to understand a balance sheet , Main financial statements , Why are income statements important .

Besides, you may also learn a lot from the Best Marketing Blogs 2020 and the user-friendly CRM , Business Expense , Accounting Cycles .

Take your business to the next level with Deskera All-in-One . It is a platform that offers Invoicing, Accounting, Inventory, CRM, HR & Payroll all under one roof. With Deskera Books , you can avail of online invoicing, accounting & inventory software to boost your business. It covers all the significant aspects of business such as billing, payments, warehouse management, Credit &Debit Notes, financial reports, an elaborate business dashboard apart from many other features.

Key Takeaways

Let’s look at the key points from the document:

• A business plan is a written document that describes the functional areas, goals, and the way in which a company aims to address its objectives.
• In order to attract external investors startups utilize business plans.
• Companies can develop a longer traditional business plan or a shorter startup or small business plan.
• Executive summaries, distribution channels, promotional strategies, and analytical information, wealth management, and budget should include good business plans.
• Business plans could be drafted for Startups, internal business, strategic business development, scalability, and operations.
• There are 2 major types of business plans: Traditional business plans and startup business plans.
• Unreal objectives, lack of motivation, and market research could be the reasons for the failure of a business plan

Related Links

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How To Write the Company Background Part of a Business Plan

Tell the story of your company's background

What To Include

Be creative, company background examples.

A crucial part of any business plan is spelling out your company history and telling your origin story to show potential teammates and investors how you landed on your business idea and why you are uniquely qualified to pursue it.

Sharing your business background goes far beyond simply telling a clever story of how you triumphed over adversity to launch your new business. What investors will care about is how your personal history, work experience, skills, strengths, and education will help you succeed in the business.

The background portion shows what you've already done to start executing and bringing your idea to life. Potential investors want to know you'll be able to return their investment with dividends in the years to come, and the background section can help.

Key Takeaways

• Company backgrounds share a bit about the market opportunity you are pursuing (and why you're pursuing it).
• Company backgrounds can be brief for new companies, while established corporations will have more developed backgrounds.
• Company backgrounds can be more creative than other parts of your business plan that need to include industry jargon or marketing buzzwords.

The company background should include a brief history of the company. Your company background could be very brief at the beginning stages of starting up, but you can still detail what you want your company to be about and the origin of your idea. Focus instead on your personal history and the journey that led you to start your business in the first place.

In a traditional business plan, your company background (also called the "company description") follows the executive summary.

Sharing the origin of the idea is valuable because it shows how you think and how you were able to take an idea, craft it into something more detailed, and ultimately build a business out of it. Detailing your progress to date, including any relevant key milestones, is an important part of this, as is listing the problems you’ve faced so far (and how you've overcome them).

Describe the market opportunity you're pursuing and why. A business plan to open a pizza parlor is not particularly creative or original, but if your idea is built around a specific market that is not being tapped, you need to emphasize this and discuss your short-term plans for growth and for reaching that market.

Key topics to include are:

• Any existing experience or relationships with customers
• The market you plan to cater to
• Your educational background
• Other companies you’ve worked for and the roles you've held in those businesses
• Previous businesses you’ve started and their outcomes/current status
• Your technical skills
• Your areas of expertise in your industry segment
• Your areas of weakness or inexperience and how you plan to compensate for them
• Any relevant professional clubs or associations you belong to

Company backgrounds don't need to include technical details about your business structure, finances, or other information along those lines. That information will go elsewhere in the business plan.

Tell your story in a way that's more engaging than just another page that leans on industry jargon, buzzwords, and trite platitudes.

To illustrate your company's history, use images that show how you started. For example, you could highlight charts and graphs to draw attention to key milestones or incorporate customer testimonials or excerpts from news stories that featured you or your business. Take it a step further toward building connections with the people reading your company history by showing vulnerability and sharing some of your past failures (and the lessons you learned from them).

Remember to be concise and stick to just one or two creative approaches that best highlight your particular approach to business and your specific history. This section should be brief.

Here are some company background examples from familiar names.

The Coca-Cola Company

The Coca-Cola Company (NYSE: KO) is a total beverage company with products sold in more than 200 countries and territories.

Our company's purpose is to refresh the world and make a difference. Our portfolio of brands includes Coca-Cola, Sprite, Fanta, and other sparkling soft drinks. Our hydration, sports, coffee, and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, Powerade, Costa, Georgia, Gold Peak, Ayataka, and BodyArmor. Our nutrition, juice, dairy, and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife, and AdeS.

We're constantly transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to market. We seek to positively impact people's lives, communities, and the planet through water replenishment, packaging recycling, sustainable sourcing practices, and carbon emissions reductions across our value chain. Together with our bottling partners, we employ more than 700,000 people, helping bring economic opportunity to local communities worldwide.

The Home Depot

When The Home Depot was founded in 1978, Bernie Marcus ad Arthur Blank had no idea how revolutionary this new "hardware store" would be for home improvement and the retail industry. Today, we're proud to be the world's largest home improvement retailer. In 2,300 stores across North America, we aspire to excel in service—to our customers, associates, communities, and shareholders. That's what leadership means to us. That's The Home Depot difference.

Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!

Nussbaum Center for Entrepreneurship. " Business Plan Outline ."

Small Business Administration. " Write Your Business Plan ."

The Coca-Cola Company. " About the Coca-Cola Company: Overview ."

The Home Depot. " Our Story ."

Establishing a company in Finland and business plan creation

A business plan is one of the most important and useful tools for a beginner entrepreneur who is just planning to start his own business and for an active businessman who is looking for ways to find investors or get an additional financing to develop his own business.

The business plan allows you to think ahead about future actions for the implementation of your project. Developing a good business plan is not quite difficult: creating a business plan and its structure, analyzing the market and competitors, finding a break-even point and determining profit taking into account various risks.

Main content

What is a business plan, finding a business idea and its testing, business concept model, protecting the business idea, different forms of entrepreneurship in finland, what kind of company would i set up company forms, the establishment of the company. select a company name, business plan sketch.

Writing your first-ever business plan can be difficult to do. To simplify the process, here are some tools/tips that help you to start.

Number of businesses in the Trade Register by company type, 03.01.2024

The most popular form of company type according to Trade Register are Limited liability company (42%), Private trader (37%) and Housing company (13%). See slide . This statistical data analysis may help you to define the company type to choose.

SWOT analysis of the business idea

SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. The SWOT table can summarize and visualize the entrepreneur / company situation relative to the market. The entrepreneur describes the strengths and weaknesses of his own business idea as well as opportunities and threats. List briefly the relevant core points in each table for the action you plan. These essentials will be described in detail later in your business plan. It is worth to consider at the beginning, but it can also be done and completed in the end of your business plan when you will study all-important questions more detailed.

Choosing a business idea

You have a great idea for a business but is it so worth to start it? Have you a good chance of success? You can estimate your business ideas using this table.

The first 6 steps for your business plan creation

Consider the following questions and write your thoughts up: What do I sell? Whom do I sell? How do I sell? Choose a company form and name for your firm and write it in your business plan, in the section with background information.

• A written plan of business
• the company's operating environment
• modes of operation and
• objectives.
• longer-term goals
• quantitative targets, for example in the form of earnings budgets and financial statements
• A planning tool for the entrepreneur himself
• Negotiating tool when discussing with potential investors, financiers, business partners, landlords or suppliers

With a business plan a starting entrepreneur can:

• prove that the company is successful
• show the company's profitability and prospects and makes it easier to get funding
• get start-up money from TE's office or business support from the ELY Center. Read more about Funding a new business and find all the useful links on our website in the section Resources. How to set up and start business in Finland .

In the business plan you can:

• business idea
• entrepreneur's knowledge and education
• product / service features
• customer groups / markets
• market competition / competitors
• the funding needed to start a business (investment need)
• profitability, sales
• risk factors that may affect the company's success
• other factors affecting entrepreneurship

Finding the right business idea is a crucial point in successful entrepreneurship. The things you might always remember and take into account when you have decided to start a new business:

• The most important thing for an entrepreneur is to keep the eyes open and know how to follow the most significant trends in the scope of their businesses.
• What kind of gaps and problems exist in the sphere of your business now?
• Could your company solve that problem and how you are going to do it? How your company can solve that problem?
• There must be a well-marked reason for the company to exist.
• The new product or service must be so useful for potential customers that they are willing to buy it.
• The potential customer base must be large enough for getting a profitable business.

Business idea testing

The content of the business idea can be described, for example, with the following questions:

• What does the company produce, what kind of services does it has? What benefit does the customer receive and what types of needs the idea can fulfill? What are the markets?
• For whom the company services are intended, and which target groups will use them. Who are your customers?
• How does the company work, what are the company’s principles? How a business idea can help you to earn money?

Using the Business Concept Model, you can picture how your business will operate. A business concept is a connecting link between your idea and future business plan.

Did you get the idea? Did you make the invention? You have to think how to protect your business idea! The idea cannot be patented if it is just a wish or a dream about a product. You can consult your nearest ELY center or PRH (Finnish Trade Register) for advice.

You got a brilliant idea. You wonder if you can patent it so that others will not benefit from your good idea. If your idea is at intention stage, you still do not have the invention for which you could get a patent. When you have thought about the details of your invention up to the technical solutions, you can apply for patent protection.

1. Method of protecting the business idea №1 - Patent

• The exclusive right granted to the inventor prohibits others from using a patented idea; time-limited, up to 20 years of protection
• The patent is only granted to the new invention
• Find out if your invention is the new one
• Data search can be started at Google and continue with patent information from the Espacenet database
• PRH (Finnish Trade Register)

2. Method of protecting the business idea №2 - Design right

• The form of design protection, which protects from the appearance of the same product and gives you exclusive rights for it.
• The object of protection is always visible
• The goal is to encourage designers to design and support those who are willing to invest in design results

3. Method of protecting the business idea №3 - Utility Model

• The holder is entitled to prohibit the professional exploitation of his invention by others.
• The utility model can be, for example, a technical solution.

4. Method of protecting the business idea №4 - Trademark "TM"

• It allows the goods to be distinguished from similar products which produced by other traders
• If you have invented a name, immediately start using the trademark symbol TM-symbol, even if the trademark application is pending!

5. Method of protecting the business idea №5 - ® sign

• Should only be used with registered brands
• A trader can protect his brand by seeking registration

The New Finnish Trademarks Act (in Finnish, Tavaramerkkilaki 544/2019) entered into force on 1 May 2019. Read about the changes at PRH (in English) or at Finlex (in Finnish)

To start a new business, you have to choose the entrepreneurial form. There are several forms of entrepreneurship in Finland:

Light Entrepreneurship

• Activities through firms, which take care of all your paperwork or book keeping
• Act, for example, as an expert lecturer
• Invoicing, salary calculation, tax withholding, insurances etc. have been outsourced

Partnership

• 100% divided into parts (two or more individuals share management and profits)
• General (general partners manage the company, take responsibility for the debts and obligations)
• Limited (general and limited partners; where limited partners work as an investors only )
• Joint venture (agreement between two or more individuals or companies; try to reach the same strategic goal while holding their individual businesses)

Part-time entrepreneurship

• Entrepreneurship in addition to one's own work, studying etc.
• For example, your own firm, private entrepreneur
• Costs can be reduced in taxation

Company Acquisition/Purchase of company

• Changes of generations
• Buy the whole company, business, share?
• Clarification / finding a purchase price. Estimate the realistic value of a company.
• Continuation of a lease

Franchising

• You use a firm's business model and brand
• Parent company
• Pay franchise fee, royalties
• Have certain operating rules
• Have support

Own business

• Freedom to do what you like. Independence
• You decide when and where to work. Lifestyle
• Chance to make money, in spite off all risks
• Learning a wide variety of new things through various business processes

Team Entrepreneurship

• Very often entrepreneurs from different spheres work together, they have own businesses / own companies
• Joint venture, such as a limited liability company or cooperative

Startup company

• Inventing an innovation
• Piloting in own country, fast-grow
• Internationalization

The nature of the company's future operations will have a major impact on the choice of business form. The necessary starting capital and the number of people involved in the company establishment have their own significance. The limited liability company, the general partnership, the limited partnership and/or private entrepreneur have different terms of taxation.

When choosing a business form, you must take into account the following:

• The size of the company / its scope
• Capital needs
• Distribution of profit
• Reliability (Imago)

Which business form? There are two company forms:

1. companies where there is an entrepreneur's personal responsibility for the company's commitments:.

• Private trader
• General partnership
• Limited partnership
• No needs in the charter / constitutional documents or authorized capital to set up firm
• The notice to Trade Register is enough
• The trader makes commitments and concludes all contracts under his own name
• The trader/entrepreneur is responsible for the commitments he has made both by the property of the company and by his personal property
• The code (Y) is not required. In practice, "Tmi" or "Toiminimi" is often used
• Private traders: "Tmi" or "Toiminimi” forms is the most natural for a small business when an entrepreneur works alone or with his / her spouse and has a fixed purchase or sales place or other working place and is engaged in the business enterprise.
• All measures related to the establishment are simple and take a little time; registration fee as well as the Y3- form of the taxpayer announcing about the starting of operations is sufficient to do
• General partnership company is created when two or more partners agree to pursue a business to achieve a common purpose and conclude a partnership agreement
• One partner cannot set up such a company
• If the number of shareholders falls, for example when the shareholder leaves or dies, the company may operate for a maximum of one year as an General partnership company
• A partner can be either a natural person or an entity, for example a company
• All the partners are personally responsible for the company's debts and other obligations both of their own and other partners
• The partners’ surnames, for example “Kultanen & Sjölund" are accepted as a company name. You should not give such a name as " General partnership company". Capital is not needed
• A limited partnership is established by a written agreement signed by all shareholders
• The contract is almost identical to a General partnership company
• The additional instructions deal with the silent partner's contribution and dividends payable to him
• There is at least one responsible partner and one silent partner
• The silent partner's responsibility is limited to his capital investment
• The Limited partnership company or Ky. The company name cannot get the name of the silent partner

2. Companies with authorized capital

• Limited liability company
• Co-operative

Limited liability company (Osakeyhtiö or OY)

• The most common forms of business in Finland
• The shareholders are only responsible for the company's obligations within the amount that they invested into the company
• The shareholders certify to the number of shares by signing a treaty
• Limited liability company or OY
• According to the law, a limited liability company may be either Private or Public
• The Limited liability company Act ( Osakeyhtiölaki ) applies to both public and private limited liability companies
• The special features of a public limited company are mentioned only in some parts of rules that concerns limited liability company
• The shares of a private limited company cannot, by law, be subject to public trading
• A private limited liability company is typically owned by defined owners and free transfer or convertibility of the shares into the ownership is restricted by the terms and conditions of the charter
• The private limited company has a minimum of 2 500 € share capital. Update: From 1 July 2019, the mandatory share capital requirement of 2500 euros is not required
• Public limited company shares may take part in public trading, so their free sale and convertibility must not be restricted
• A public limited liability company's law stipulates a minimum capital requirement of 80,000€

Co-operative (Osuuskunta or OSK)

• The formation of co-operative requires at least three founding members
• The co-operative is a community in which the number of members and the amount of capital are not predetermined
• The purpose of cooperatives is to support the livelihoods of members. The members of the cooperative can use the services provided by the company
• The membership fee is the same for all members
• Co-operative (Osuuskunta), briefly "osuus” or osk
• The name must not contain the person name

10 conditions of the Business name

• The name must be unique and correspond to the specified rules of registration
• Spoken (Merlot wine)
• Pronounce in Finnish; easily changeable
• Pronounce in English; without Scandinavian characters
• No double meaning, "Nothing sucks like Electrolux"
• No misrepresentation
• The name may not be a number
• The name may not be general
• The name should to be consistent with prevailing fashion and should not restrict your business (e.g. do not give the name according to the district where your office is situated, because you can move in the future)
• The name must be relevant (should not be childish or too playful)

If you have invented a name, immediately start using the trademark symbol TM-symbol, even if the trademark application is pending!!!

Unemployment Insurance Reform in Finland

The Finnish Government is currently preparing legislative reforms that can affect unemployment security system. Changes would enter into force throughout the year 2024.

Finnish Pension System: Trust Remains at a High Level

According to the recent Pension Barometer data conducted by the Finnish Centre for Pensions, citizens' trust in the pension system remains at a high level.

Finnish Economic Outlook for 2023–2025 years

The increase in interest rates have a negative impact on economic growth. This is reflected especially in the housing market and the construction sector.

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and bring your compatible smartphone and number. New line w/month-to-month agmt & Business Unlimited Plus 5G or Unlimited Pro 5G plan req’d. Cust must transfer smartphone & number to VZ; new line activation & number transfer must be completed in one transaction. Smartphone must be compatible w/VZ network. $600 credit applied to acct. over 24 mos; promo credit ends when eligibility requirements are no longer met. Credits begin in 1-2 bills, will include appropriate credit amounts from order date & do not appear in Biz Unlimited 5G plan fee section of your bill. Biz Unlimited 5G plan fee increases in month 25. Cust must retain smartphone & remain on selected plan in order to receive credit(s). Cannot be combined with other device offers. Business Unlimited 5G plan terms apply. Limited time offer.

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Here's who could be responsible for paying for the Baltimore bridge disaster

• The Francis Scott Key Bridge in Baltimore collapsed after a container ship collided with it.
• Several entities could be on the hook to foot the bill in the aftermath of the disaster.
• The maritime insurance industry will likely be saddled with the highest costs. 

The Francis Scott Key Bridge in Baltimore collapsed on Tuesday after a large container ship ran into it, leading to six presumed deaths and millions of dollars in possible damage.

It's still too early to estimate the total economic impact of the disaster, but between the cost of rebuilding the decades-old bridge, compensating the victims' families , and paying out damages for disruptions to the supply chain, the eventual cost of the disaster is expected to be significant.

Who will pay to rebuild the bridge?

President Joe Biden said on Tuesday the federal government should be responsible for paying to reconstruct the damaged Francis Scott Key Bridge.

"It is my intention that the federal government will pay for the entire cost of reconstructing that bridge, and I expect Congress to support my effort," Biden said.

The bridge was built in the 1970s for about $60 million, but the cost of rebuilding it could be 10 times its original price tag, an engineering expert told Sky News. 

Baltimore is among the busiest ports in the nation , with more than a million shipping containers passing through each year. The collapse — which closed the port to all maritime and most road traffic until further notice — is already beginning to wreak havoc on the supply chain.

The cost of building the bridge back fast enough to offset diversions as much as possible could saddle the government with a more than $600 million bill, David MacKenzie, the chair of the engineering and architecture consultancy COWIfonden, told Sky News.

Who will pay for damages to the ship and its cargo?

The container ship, the Dali , is owned by a Singapore-based firm. The ship's charterer, Maersk, confirmed to Business Insider that vessel company Synergy Group operates the ship. 

However, the companies with cargo aboard the Dali could ultimately be responsible for some of the ship's damages and cargo costs, according to Ryan Petersen , the CEO of the supply-chain-logistics company Flexport, which had two containers on the ship.

Related stories

The Dali was carrying 330 containers that must now be rerouted, Petersen said in an X thread.

An ancient maritime law known as " general average " dictates that companies with even a single container aboard a ship split certain damages pro rata based on the number of containers they had on board, ensuring all the stakeholders benefiting from the voyage are splitting the risk, Petersen said.

General average situations can occur when a ship is stranded or when cargo is damaged or thrown overboard to save the vessel, according to Flexport . The concept helps ensure that all parties who have a vested interest in the vessel share the cost and concern of protecting it.

It's too soon to know whether damages incurred to free the Dali in the coming days will qualify as a case of general average.

Who will pay for everything else?

The majority of the financial fallout is likely to lay primarily with the insurance industry, according to media reports.

Industry experts told the Financial Times that insurers could pay out losses for bridge damage, port disruption, and any loss of life.

The collapse could drive "one of the largest claims ever to hit the marine (re)insurance market," John Miklus, the president of the American Institute of Marine Underwriters, told Insurance Business.

He told the outlet that the loss of revenue from tolls while the bridge is being rebuilt will be expensive, as will any liability claims from deaths or injuries.

The Dali is covered by the Britannia Steam Ship Insurance Association Ltd., known as Britannia P&I Club, according to S&P Global Market Intelligence.

In a statement to Business Insider, Britannia said it was "working closely with the ship manager and relevant authorities to establish the facts and to help ensure that this situation is dealt with quickly and professionally."

Britannia is one of 12 mutual insurers included in the International Group of P&I Clubs, which maintains more than $3 billion of reinsurance cover, sources familiar with the matter told Insurance Business.

Britannia itself is liable for the first $10 million in damages, both FT and Insurance Business reported. Whatever remains is dealt with by the wider mutual insurance group and Lloyd's of London, a reinsurance market in the UK, the FT reported.

Update: March 28, 2024 — This story has been updated to include additional information about general average and clarify that it is too soon to know whether general average will apply in the case of the Dali.

Watch: The container ship that destroyed the Francis Scott Key Bridge has crashed before

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Russia-related Designations and Designations Updates; Issuance of Russia-related General Licenses

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 79 , "Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on December 12, 2023," and Russia-related General License 80 , "Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Highland Gold Mining Limited."

Additionally, OFAC has updated its Specially Designated Nationals and Blocked Persons List:

The following vessels have been added to OFAC's SDN List:

ARKADIY CHERNYSHEV (UBSH5) General Cargo Russia flag; Vessel Year of Build 1988; Vessel Registration Identification IMO 8714695 (vessel) [RUSSIA-EO14024] (Linked To: IBEX SHIPPING INC).  CAPTAIN YAKUBOVICH (UBCG2) General Cargo Russia flag; Vessel Year of Build 1984; Vessel Registration Identification IMO 8318740 (vessel) [RUSSIA-EO14024] (Linked To: IBEX SHIPPING INC).  MARIA (UBRH7) General Cargo Russia flag; Vessel Year of Build 1986; Vessel Registration Identification IMO 8517839 (vessel) [RUSSIA-EO14024] (Linked To: IBEX SHIPPING INC).

Unrelated Administrative List Updates: