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How to Write a Business Plan For Investors (That They Will Love)

The Startups Team

A good business plan does more than just inform readers about what your company does, how you earn money, or what you want to do. It persuades the reader that your company is awesome, gets them excited about the opportunity to get involved, and makes them want to help you succeed.

But how do you write a good business plan for investors? You probably didn’t go to business school and if you’re a first-time founder, it can be really hard to figure out how to do something so technical. But don’t worry! This guide will walk you through how to write a business plan for investors, will help you answer the most important questions about your business, and will show you the best ways to illustrate them. We’ve also thrown in some additional resources you can turn to for help.

And if that’s still not enough, Bizplan is giving Startups.com readers 50 percent off their first month of business planning services. Check it out here .

The Big Picture

There are 14 important sections of a business plan. But that is by no means an excuse to write out your entire life story on paper. The average business plan should be around 15 pages — no more than 20.

In the past, the average business plan was anywhere from 40 to 100 pages, and guess what they found out? No one was reading all of that. So don’t let important information about your company get lost in a jumble of words. Investors look for founders who can provide the most value in the least amount of time, and your business plan is a great indication of that ability.

The Big Questions

By the time readers are done reading your business plan, they should have a clear understanding of the following: Why (Why this? Why now? Why you? Why them?) and how (How will you make money? How will you get customers? How will you grow your business?).

These questions should be answered throughout your business plan, and should prove to those reading it that your company has the right product, market, team, time, and strategy to make them a return on their investment.

So without further adieu, here is a breakdown of writing a business plan for investors:

1. Executive Summary

The Executive Summary is an introduction to the main ideas that you will discuss in the rest of the plan. If an investor read only the Executive Summary and nothing else, you’d want them to be able to walk away with a clear understanding of the main highlights of your business and why it’s exciting.

A good Executive Summary includes quick, one to two sentence overviews of the following information: mission statement, product/service summary, market opportunity summary, traction summary, next steps, and vision statement.

Pro tip: Although the Executive Summary comes first, it is often helpful to write it last because you’ll have worked through everything by then.

2. Investment Opportunity

The Investment Opportunity section is where you tell investors what your goals are, why they are integral in helping you achieve those goals, and what they have to gain from getting involved with your company. This includes:

• Your Funding Goal : How much money do you need to move forward
• Terms : What will investors get in exchange for their investment?
• Use of Funds : How do you plan to use those funds? (Hint: a 6-figure salary for yourself isn’t what they’re looking for here)
• Milestones : What will you be able to achieve with their investment?

Again, the most important question to answer here is why: Why should investors want to be a part of your company, and why is now the time for them to get involved? Identify the three to four key factors that make your company a great opportunity and make sure they’re included in this section.

3. Team Overview

This is where you introduce your team and how you’ll work together to bring the business to life. An ideal Team Overview section makes the case not only that your team is the right team for the job, but that you’re the only team for the job.

In order to do this, you need to create a bio for each member of the team. Each team bio should include: the team member’s name; their title and position at the company; their professional background; any special skills they have developed as a result of their past experience; their role and responsibilities at your company; and what makes them uniquely qualified to take that role on.

Pro Tip: This is not the time or place for cheesy fun facts or hobbies. Aim for three to five concise sentences on each team member.

4. Market Opportunity

Before you do a deep dive into what your company does, it’s important to set the stage and provide readers with some insight about why you’re starting this company in the first place. A good market opportunity section addresses two key points: The problem that your product/service solves, and the industry trends that make now the time for your company to succeed.

When writing the “problem” part of this section, consider two questions: What problems do your target customers face that your product/service solves? What annoyances or inconveniences do they face that your company helps to eliminate?

When writing the “trends” section, consider these three questions: What recent emerging trends have you developed your product/service in response to? Are there any new or emerging technologies that make your product/solution possible? Are there any specific brands you can point to that illustrate the demand for products/services like (but not too like) yours?

And to sum it all up, write a conclusion that answer this question: How do the problems customers face and the trends that are happening come together to create the perfect environment for your company to succeed?

5. Company Synopsis

The company synopsis section is where you introduce readers to your company and what you have to offer. This is the easy part: It’s where you get to talk about what you’re doing and why it’s awesome.

Consider these questions if you’re having trouble getting started: What does your company do? How does it solve the problem you’ve previously outlined? What products and services do you offer? How will customers use your product/service? What are the key features? What makes your product/service different from anything currently available?

6. Revenue Model

This is where you answer the age-old question of any business: How does your company make money? Identify all current/initial revenue sources, including pricing, COGS, and margins.

Ask yourself: Why is this revenue model the right fit for your current stage? How does your pricing compare to competitors? Are there additional revenue sources you plan to add down the line? If you haven’t started generating revenue when & how will you “flip the switch”?

7. Traction/Company Milestones

It’s important for investors to see that your business is more than just an idea on a cocktail napkin; it’s an actual, viable business. Traction is a huge part of making that case.

Here are some key categories of traction that signal to readers that your company is making moves.

• Product Development : Where are you in the process? Is your product in the market?
• Manufacturing/Distribution: Do you have an established partner for production/manufacturing? Distribution?
• Early Customers and Revenue : Do you have existing customers? How many? And how fast are you growing? Have you started generating revenue?
• Testimonials and Social Proof : Do you have any positive client reviews of your product/service? Any high profile customers or industry experts?
• Partnerships : Have you secured partnerships with any established brands?
• Intellectual Property : Do you have any patents for the technology behind your company? Is your company name trademarked?
• Press Mentions : Has your company been featured by any media outlets? Which ones?

8. Industry Analysis

The industry analysis section provides a bird’s eye view of the industry your company is positioned in, what’s happening in the industry, and where your company stands in relation to your peers. You want readers to walk away from your business plan seeing not only that you’re an expert in your company but that you’re highly knowledgeable about the industry you’re entering into.

Be intentional about the statistics you include in the plan. Include only numbers that really help to illustrate: the size of the opportunity your company is positioned to address; the demand for your solution; the growth of the audience/demand for your product that is already happening; and competitor analysis.

Now that you’ve introduced readers to your industry, it’s time to give them a glimpse into the other companies that are working in the same space, and how your company stacks up. Identify at least three sources of competition for your company and answer the following questions about each one:

• Basic Info : Where are they based? What stage of growth are they in?
• Traction : How much revenue do they generate? How many customers do they have? Have they received funding?
• Similarities and Differences : What are their strengths? How do you plan to neutralize them? What are their weaknesses? How is that an advantage to you?
• The Takeaway : What can you learn from your competitors to make your company stronger?

Pro tip: When identifying competitors, it’s important to think outside the box, and look beyond companies that are offering the exact same product or service that you are. A skimpy competitor analysis section doesn’t tell investors that your solution is unrivaled — it tells them that you’re not looking hard enough.

9. Differentiating Factors

The differentiating factors section is where you outline how your product/service is different from others on the market and how those differences will help you to maintain your strategic edge. Ask yourself: What are three to five key differentiators between your company and other solutions out there? How will these advantages translate into a long-term advantage for your company?

10. Target Audience

The target audience section is where you show readers that you know who your audience is, where they are, and what is important to them.

Some questions to help you get started include: Who are the people that your product/service is designed to appeal to? What do you know about customers in this demographic? Does your target audience skew more male or more female? What age range do your target customers fall in? Around how many people are there in this target demographic? Where do your target customers live? How much money do they make? Do they have any particular priorities or concerns when it comes to the products/services they buy?

11. User Acquisition and Marketing Strategy

Now that we know who your customers are, the next question is: How do you plan on getting them?

Ask yourself: How will you get your first customers? Who will you target first? Will you introduce your product in certain key geographic locations? Are there any existing brands that you are planning to partner with? How do you plan to raise awareness for your brand? What forms of media will you use? Why? Do you have a presence on social media? Which platforms do you use and why? Essentially, what is your marketing strategy ?

12. Future Growth and Development

Once you’ve accomplished all the short-term goals, built out your initial product offering, and acquired your first customers — what will you do to grow your business from there?

Ask yourself: Do you have any new products in the pipeline? How will these new products enhance your current offerings? Are you planning to expand into new markets (new cities, new demographic categories)? Can you provide a timeline of when you expect each new development to take place? What metrics or conditions will help you to decide when it’s time to move forward? What are some potential exit strategies for your company down the road? Will you seek acquisition by a larger company? Do you plan to take the company public with an Initial Public Offering?

13. Financial Overview

Financial data is always at the end of the business plan, but that doesn’t mean it’s any less important. In fact, poor financials can rip apart anything you initially had going for you. The charts, tables, and formulas in your financial section show an investor how well you’re doing and what your odds are for continued survival.

The three most important things to include are: cash flow statement, income statement, and your balance sheet. While these three things are related, they measure quite different aspects of a company’s financial health.

We’re Here To Help

There you have it: A comprehensive guide to writing your next business plan for investors. Sound like a big undertaking? Our friends at Bizplan.com have your back. Click here for a Startups.co exclusive discount on their services. Good luck!

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16 Impressive Business Plan Templates to Show Investors

Written by: Raja Mandal

Creating a business plan can significantly increase the chances of launching a successful business.

Statistics show that companies with a plan are 260% more likely to launch than those without one. It's no surprise that 71% of fast-growing businesses create plans in advance.

But here's the kicker: making a well-written, organized, and eye-catching business plan can feel overwhelming, especially when you're juggling multiple aspects of your business. It takes a ton of time, effort, and even money.

That's where Visme's business plan templates come in. They're super user-friendly, give you a clear structure, and include all the vital info that investors are looking for.

Basically, they help you organize your thoughts and make your business look professional and compelling without draining all your resources.

In this article, we present 16 easily customizable business plan templates that you can use to create your own or improve your existing business plan.

Let's get to it!

Table of Contents

What is included in a business plan.

• 16 Business Plan Templates

How to Write an Effective Business Plan

Business plan faqs.

• A business plan template is a pre-formatted document that helps you organize and present your business plan.
• A business plan includes key elements like an executive summary, company overview, market analysis, products and services, financial plan and marketing plan.
• Choose a business plan template from the 16 available options in this article and customize it to create your own in minutes.
• To create a business plan, you need to write the executive summary, describe your market and problem, support your claims, outline financials, plan for exit and detail implementation.
• Create an account with Visme and start creating your business plan in a few simple steps.

What Is a Business Plan Template?

A business plan template is a framework that guides you through documenting your business idea, how you plan to make it succeed and the steps you'll take to get there. It's like a fill-in-the-blank exercise that, once completed, provides a comprehensive outline of your business's goals, strategies and financial projections.

These templates are tailored to different businesses and industries. Whether you're opening a coffee shop or launching a tech startup, there's a template that fits your needs.

The best thing about these templates is that they save time and simplify the whole process. They take care of the format so you can focus on the content and strategy. Plus, they organize the business plan into manageable sections so you don't miss anything important.

Not all business plans are created equal. They differ based on your business type, the goals of your business plan and the target audience.

Some business plans may focus on the financials, while others may focus on the marketing and sales strategies.

Regardless of the type of business plan you need, you should always include the following elements in your business plan:

1. Executive Summary

The executive summary concisely summarizes your business plan, outlining your goals and strategies. It helps readers quickly grasp your vision and direction and sets the tone for the rest of the plan.

2. Company Overview

The company overview details what your business does and outlines the services or products you offer, the problems they solve and who your customers are.

Check out our detailed guide on writing a company overview for a business plan to learn more.

3. Market Analysis

The market analysis section examines the specifics of your industry, including your target market, customer demographics and competing businesses. It shows how well you understand the market environment and trends.

4. Products and Services

This section describes your offering, how it serves your customers, and what differentiates it from competitors. It should dive deeper into the tangible and intangible benefits your business delivers.

5. Financial Plan

The financial plan section of your business plan outlines your business's future finances. It’s a comprehensive forecast of your business's expected revenue, expenses and profitability. This part helps you plan how your business will grow and stay financially healthy.

6. Marketing Plan

Here, you lay out how you will attract and retain customers. This section should reflect your pricing, advertising, sales, and distribution strategy to ensure your marketing efforts align with your business objectives.

7. Competitive Analysis

The competitive analysis of your business plan is the evaluation of your position relative to other businesses in your industry. It highlights your strengths, weaknesses and areas for improvement to outperform your competitors. It's a critical part of your business plan as it helps you identify the best opportunities for growth and expansion.

8. Return on Investment (ROI)

The Return on Investment (ROI) section outlines how much money investors can expect to make and when they can expect to get it. This helps investors decide if the business is a good investment for them.

If you borrow funds, your plan should outline how and when the company intends to repay them so lenders can clearly understand the repayment schedule.

16 Business Plan Templates for Investors

Let's get to the heart of this article: the business plan templates.

We have curated 15 of the best templates for different industries that are fully customizable. All you need to do is select a suitable template and customize it using our drag-and-drop editor to fit your needs.

Visme is packed with user-friendly tools, professionally designed templates, and millions of design assets that you can easily use to create stunning business documents —no professional design skills required

But don't want you to just take our word for it.  Listen to what one of our satisfied customers has to say:

The templates are great, and the drag-and-drop editor makes it easy to customize them to match my needs. I also appreciate the wide range of features, including charts, graphs, and other visuals that can be used to present data in a clear and concise way.

• Cassandra C. | Graphic Designer & Business Owner

1. Consulting Business Plan Template

Let’s start with this consulting business plan template. With a professional black-and-white theme and high-quality images, it exudes sophistication and a keen eye for detail. The design shows your financial strategy with easy-to-understand tables. When you're crafting this business plan template for investors be sure to use concise and clear data so that readers understand your strategy and layout.

Feel free to customize this business plan template for any consultancy niche, like engineering, financial advising or interior design consulting.

2. Marketing One Pager Business Plan Template

If you're aiming for clarity and brevity, this template has you covered.

This one pager business plan template offers an energetic, concise way to showcase your marketing business plan on a single page. It features a lively red and black color scheme that makes your plan stand out.

The template visualizes company size and niches with vertical bar graphs, operational locations with pie charts and market analysis with radial gauges.

Additionally, Visme gives you 30+ data widgets for all data types and 20+ types of charts and graphs to help you turn statistics and figures into beautiful visuals. Choose your favorite data visualization tool, input your data, and include it in your business plans. This will help investors understand your business's potential without reading through lots of text.

3. Simple Business Plan Template

If you are searching for a simple yet visually appealing business plan template for investors, this template is perfect for you.

It maps your launch plan with a simple flowchart and well-designed icons for essential stages such as buyer personas, UX design, development and testing. The goal is to streamline your planning process, making it accessible and visually attractive.

4. E-commerce Business Plan One Pager Template

Understanding your customers and identifying market opportunities are crucial for the success of any e-commerce venture.

This e-commerce business plan template helps you organize your information on one page. It includes sections for an executive summary, market and competitive analysis, products and services, and marketing strategy.

Using this template, you can share your business vision and growth plans effectively, making sure everyone is on the same page.

Need help crafting persuasive drafts for your business plan? Use Visme's AI writer . This advanced tool can help you edit and summarize your text, create layouts and even generate first drafts for any part of your business plan. Just prompt the tool about what you want and let it handle the rest.

5. Sports Business Plan One Pager Template

Get your sports-centric business idea off the ground with our sports business plan template. It helps you visualize your business model, define your audience, content and growth plan and set transparent pricing on a single page.

What's more, the template is all decked out with sporty-themed green accents and relevant images that are sure to wow potential investors.

RELATED: 10 Efficient Business Model Canvas Templates to Use

6. Sales Business Plan One Pager Template

This awesome template is for sales managers, strategists, and business developers who want to communicate their sales plan quickly and effectively. The condensed format gets all the important points across—sales goals, tactics, revenue—in a single document. On the flip side business plan template works well for investors who need the run down own of how you plan to drive revenue and sales.

Showcase your brand personality on your business plan using Visme's brand design tool . Simply copy and paste your website URL into the tool, and it will automatically extract your brand colors , brand fonts , and company logo and save them under your brand area. This way, you can easily apply your brand elements to any document with just one click.

7. Finance Business Plan One Pager Template

Make a great impression on potential investors by highlighting your business's unique advantages using this template. It's perfect for startups, SMEs and financial advisors to share financial strategies, goals and key targets.

You'll find revenue and expense plans, market studies, and what makes you unique, all neatly laid out with charts and infographics. Customize it easily to fit your brand, making it a powerful tool for attracting investors.

8. Company Strategic Business Plan Template

Launching a customer relationship management (CRM) tool requires a rock-solid strategy. Use this professional business plan template to outline your strategy for setting up your CRM. It features a robust executive summary, comprehensive company overview, in-depth market analysis backed by data, and well-defined marketing strategies.

The template's cool black theme is sure to keep your audience hooked, and the feature charts and integrations make everything easier to understand.

Visme's dynamic fields feature can help you save time and resources by simplifying repetitive and manual data entry.  This feature lets you create and save fields for your business plans, like addresses, contacts, and finances. When you change information, it will auto-populate across multiple documents with these dynamic fields.

9. Denim Business Plan Template

Dress your business plan in the fabric of your trade with this denim business plan template. The classic denim texture and patterns capture the true essence of your brand and draw your audience's attention.

The template makes it easy to understand your potential buyers and popular trends, especially among teenagers. It uses visuals like charts and graphs to reveal this information. Also, it includes sections on ROI, shown with bar graphs and essential steps for the business with easy-to-understand icons. Additionally, there's a complete outline of the marketing plan.

Once you share your business plan, you can track how viewers engage with it using Visme's analytics feature . Get access detailed insights on viewer engagement, such as views, unique visits, visitors' IP and more.

Use these insights to tweak your strategy and make sure your audience is on board with your vision.

10. Consultancy Business Plan Template

If you're a marketing or advertising consultant looking to establish a strong presence, this business plan template can be a great tool. It includes a detailed "our services" page that you can customize to showcase your unique offerings. The template also outlines the financial side of your business, your target market, your goals and the steps to achieve them.

The template also has a summary of the important expenses, assets, and funding you'll need to start your consultancy.

11. Travel Website Business Plan Template

Start your travel business journey on the right foot with this website business plan template. It’s designed to detail your mission, objectives, market analysis and sales forecasts in an engaging way.

The template is super organized, so it's easy to fill in the necessary information. Furthermore, it contains sections for market analysis, strategy and financials, ensuring that every part of your plan is presented effectively.

After laying out your business essentials, bring your travel website plan to life with Visme's rich library of visuals. Use high-quality stock photos , vector icons and illustrations to tell your story beautifully. Plus, with 3D animated graphics , your audience will get a memorable experience with the business plan.

12. Startup Business Plan Template

It is crucial to have a solid plan in place to launch a successful startup. This startup business plan template helps you document your business's objectives, market analysis, business model, and customer segments.

It also offers a structured approach to planning, making it easier for your startup to present its vision and secure the necessary backing. Customize this template to cover all the essential areas of a strong startup foundation in your business plan.

Breathe life into your business plans using Visme's interactive and animation features . Add dynamic elements such as animated charts, clickable menus, hotspots and more to make your plan even more engaging and visually immersive.

13. Creative Business Plan Template

Who says business plans have to be all serious and traditional? Switch things up with our creative business plan template. It's filled with bright colors, fun design touches and lots of space, making your plan stand out to investors.

You can customize different parts, such as the product overview, launch plan, interviews, surveys, and descriptions of your ideal customers, to match your business idea and branding.

Spice up your business plan with Visme's 3D character creator . Easily design and animate characters to enhance your presentation–customize their appearance, actions and emotions to match your brand. You can also adjust the animation and style to suit your needs and incorporate them into your documents. This is perfect for making your business plan not just informative but also visually captivating and memorable.

14. SaaS Business Plan Template

Our SaaS business plan template is a simple yet comprehensive tool for founders preparing to launch their SaaS tool.

It serves as a blueprint for presenting your business concept in a structured manner that will impress potential investors and collaborators. Use it to outline your strategy, analyze market trends, and make financial projections.

Creating a SaaS business plan often requires multiple revisions and feedback from your team. Visme's collaborative design features can help with this. You can invite your team by email or a link to comment, annotate, and edit the plan in real time. This lets you get feedback right away and make changes as you go.

You can invite people outside your team, such as investors or partners, to view or make changes as well.

15. Photography Business Plan Template

Our photography business plan template is designed to help photographers present their business strategies, secure funding, or organize project proposals. It includes high-quality visuals and copy that bring your vision to life. Why this business plan template for investors, it allows you to effectively merge your creative and professional skills together.

What's more, the template includes ample whitespace to give it a clean and professional look. Whether you're a solo photographer or looking to expand your photography studio, this template will help ensure your ideas are presented beautifully and effectively.

And if you're looking for a way to enhance the quality of your images and make them look professional for your business plan, use Visme's AI image editing tools ! With a few clicks, you can unblur, upscale, edit and touch up your images.

16. Fashion Business Plan Template

Our fashion business plan template is not your average template. It's a unique tool specifically designed for the fast-paced world of fashion. The industry-centric design elements and stylish fonts make it a visual representation of your vision.

The template has sections for analyzing competition and a "Why Us" segment that shows what makes your fashion business unique. It’s perfect for emerging designers, boutique owners and online fashion startups looking to refine their brand strategy, attract investors or streamline operations.

Sharing your business plans with investors and stakeholders has never been easier with Visme's multiple sharing and publishing options. You can download your documents in popular file formats such as PDF, JPG, and PNG for offline use.

Also, you can simply share them via email or link and put them on a web page using a code snippet.

We've explained what a business plan is and provided you with business plan templates to help you get started.

If you're racing against time or need help getting your plan off the ground quickly, Visme's AI business plan generator can help you do that in a few minutes

It uses artificial intelligence to help you quickly create a polished first draft of your plan.

Provide details about your business idea, target market and goals and the generator will create a customized business plan in seconds.

You can further customize the plan in Visme's editor to suit your needs. This saves you valuable time and effort, allowing you to focus on refining your plan and bringing your vision to life.

Now let's show you how to write a winning business plan.

Step 1: Write the Executive Summary

The executive summary gives a brief overview of your business.

In a few paragraphs, share the heart of your business—the what, why and how. This section should highlight your business idea, goals and what makes you stand out.

Think of it as your business’s elevator pitch: quick, engaging and convincing enough to make people want to learn more.

Save the executive summary for the end so you get a clear idea of what to summarize. Just make sure you always include it at the beginning of your business plan.

Step 2: Define Your Market and Problem

Provide a detailed description of your target customers and the problem you are addressing.

Then identify the individuals or companies that fit your ideal customer profile and the specific challenges they encounter that your product or service resolves.

This section proves you understand your potential customer’s needs and the market gap you aim to fill. It’s about showing that you know who needs your help and why your business is the solution they’ve been looking for.

Step 3: Back-Up Your Claims and Appeal to Investors

In this section, it's crucial to back up your business claims with solid facts and research.

Describe what sets your business apart and why it's an attractive opportunity for investors. Use data, market research and testimonials to demonstrate your business's potential for success.

Then explain how investors can expect to profit from their investment. When writing this section, be sure to convince and provide facts to show that your business is not just a good idea, but a viable one that can make money.

Step 4: Project Your Financials

This step is where you talk numbers. Offer a clear overview of your business's financial future. Share your expected earnings, expenses and how you plan to maintain a healthy cash flow. This isn't just about showing you'll make money but detailing your financial strategy for growth and stability.

Break down your sales forecasts, cost estimates, and how long until you expect to turn a profit. This will reassure investors that your business is fully prepared for success, not just a pipe dream.

Step 5: Plan Your Exit Strategy

When planning your business, it's important to consider how you'll eventually transition or sell it to ensure you and your investors get the best returns.

So, in this part, outline your long-term plans for eventually stepping away from the business. An exit strategy is important for investors—it shows you're thinking ahead and considering the financial implications of future changes.

Discuss the various ways you could exit, such as selling the business, merging with another company, or passing it on to a family member or employee. Highlight which strategy aligns with your goals and how it benefits investors.

Step 6: Map Your Progress and Implementation

Remember to set short-term and long-term goals and create key performance indicators (KPIs) to measure your progress. It's important to regularly review and adjust your goals to respond to changes in the market or operational challenges.

You need to document and analyze each step of your progress to make good decisions and keep everyone informed and engaged. This also helps keep your team focused and makes sure things keep getting better.

For a deep dive into creating a precise, persuasive and practical business plan, read our comprehensive guide: How to Write a Business Plan . It provides detailed instructions, tips and templates to help you every step of the way.

Q. What is a business plan template?

A business plan template is a pre-formatted document outlining the key sections of a business plan. It guides you through essential elements, saving time and ensuring you include all necessary information.

Q. How many hours does it take to write a business plan?

The time it takes to write a business plan varies depending on several factors, such as the complexity of your business, your experience with business planning, and the level of detail required. A simple plan might take 10-20 hours, while a complex plan for seeking funding could take 80+ hours. Templates and professional help can speed up the process.

Q. How long should a small business plan be?

Ideally, a small business plan should be around 15-20 pages. Investors often prefer shorter, more focused plans that highlight key information.

Q. What is a mini business plan called?

A mini business plan is often referred to as a simple business plan. It is a concise way to present the company to investors. The brief plan is followed by a detailed plan sent to the most interested parties.

Q. What is the hardest part of writing a business plan?

Writing a business plan can be daunting, and the most difficult part varies from person to person. However, here are some of the common challenges of writing a business plan:

•  Overcoming the initial hurdle of a blank page.
• Researching and analyzing your market and competition.
• Creating realistic financial forecasts
• Staying focused on the key elements of your plan.
• Finding the right format to present your plan

Visme’s business plan templates will help you overcome these challenges by giving you a clear structure and a starting point for your business plan.

Create Professional Business Plans in Minutes with Visme

Creating a compelling business plan is crucial to when you're looking to share your vision and secure investments.

Take a look at the list and pick a customizable business plan template for investors, that's also right for you.

Beyond the templates we've shared in this article, Visme offers an extensive library of professionally designed business plan templates perfect for businesses of all sizes and industries.

It comes packed with dozens of features and a drag-and-drop editor that makes it easy for anyone to whip up attention-grabbing business documents such as presentations, infographics and reports–no professional design skills needed.

Sign up for a free Visme account today and explore the powerful tools to create your business plans!

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About the Author

Raja Antony Mandal is a Content Writer at Visme. He can quickly adapt to different writing styles, possess strong research skills, and know SEO fundamentals. Raja wants to share valuable information with his audience by telling captivating stories in his articles. He wants to travel and party a lot on the weekends, but his guitar, drum set, and volleyball court don’t let him.

Small Business Trends

How to create a business plan: examples & free template.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Executive summary.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

Company Description

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Market analysis.

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

Competitive Analysis

Organization and management team.

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Products and Services Offered

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Marketing and Sales Strategy

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

Logistics and Operations Plan

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Income Statement

Cash flow statement.

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

Tips on Writing a Business Plan

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

What is a Business Plan?

Why you should write a business plan.

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

What are the Different Types of Business Plans?

Using Business Plan Software

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

Can i write a business plan by myself, is it possible to create a one-page business plan.

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

What is a business plan outline, what are the 5 most common business plan mistakes, what questions should be asked in a business plan.

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

How is business planning for a nonprofit different.

Business Planning: Ultimate Guide to Writing a Business Plan for Investors

If you are planning to start, grow or sell a business, it is almost essential you have a plan of attack.

A traditional business plan is much more than a general list of things that you need to do.

An effective plan focuses on short-term and long-term business goals, with information that outlines how you intend to reach them.

A formal business plan will be one of the most valuable tools that you will use in raising capital from investors and for building and growing your business.

Like the businesses themselves, business plans come in many types and forms.

Oftentimes even established business owners and managers underestimate the effectiveness of a qualified business plan.

Some mistakenly think business plans are only used in the venture capital world of start-up finance.

This simply is not true. Enterprise planning is often required for anything from SBA lending and debt financing to internal planning and partnership qualification.

Many find they regularly refer to a previously-written business plan to ensure they stay on track and under budget.

A business plan can also help you establish a framework for your dream business, including structure and planning goals.

In addition, business planning is often a fluid process and a living document, with changes occurring mid-stream which means those best prepared have already done their homework and are prepared to pivot.

Crafting Your Business Plan(s)

Discovering a business idea, introductory page, executive summary, industry analysis, description of the venture, production or service plan, marketing plan, organization and management, assessment of risk, financial plan, start-up plan, internal plans, operations plans, growth plans, type 1 and type 2 business plans, type 3 and type 4 business plans, type 5 business plan, type 6 business plan, benefits of an outsourced business plan, business plan executive summary, financial statements & financial plan, how long should a business plan be, expert forecasting, market estimates from past data, common sense market estimations, porter’s five forces – industry, porter’s five forces, porter’s five forces – macroenvironmental factors, macroeconomic forces, legal/political forces, social & cultural forces, technological forces, demographic forces, global forces, porter’s five forces – scorecard, capital costs, economies of scale, brand loyalty, absolute cost advantages, customer switching costs, laws & regulation, summary of barriers to entry , defining market type boundaries, a recap of market boundaries , the importance of the tim, tam, sam, tm and som, scalable, high growth company, successful, mid-sized privately held businesses, lifestyle businesses, target marketing, time expectations as an entrepreneur, business plan writing, why write a business plan, standard evaluation and review, the business plan writing process, terms & conditions, pricing & cost of your business plan, business plans for financing, pro forma financial plans, marketing business plan.

You will essentially create two plans. The first is known as the  internal or initial start-up business plan . This plan includes your company’s mission statement, product/service description, marketing strategy plan and initial start-up goals. Most importantly, the initial plan will also include a market analysis. Performing research on the market helps both internal managers understand whether the business concept or business idea is viable and worth pursuing and to attract investors.

If it is, the initial plan will morph into something suitable for angel investors, venture capitalists and private equity groups. Typically, your final secondary plan will incorporate the details in your initial start-up plan into a more finalized version ready for publication. InvestmentBank.com assists throughout this entire process.

How you go about your business plan process is dependent on the audience for which it will be created.

For example, if you will be seeking a business loan, you need to create  business plan for bank loans . Conversely, if you are seeking investment capital in equity financing, you’ll most likely need a  venture capital business plan . Regardless of the audience any typical business plan will generally include the following:

• A company description, including a description of your business and the products and/or services offered
• A detailed description of the target market and how they will best be served
• Information regarding the management team and key employees within the company
• Detailed information about cash flow and financial analysis, budget and market penetration
• An  Executive Summary  for a snapshot 30,000 foot view of all aspects of the business and how it will be successful

Discovering a business idea is the first step towards creating a business model hypothesis. Specifically, a business idea worth investigating further is a “proto-business model” – the embryo of a viable business model. The business idea is essentially your best guess that describes your Value Proposition (the thing you want to sell) and your Customer Segment(s) (the target customers you want to sell to). This is your initial pass at creating a viable Value Proposition – Customer Segment “fit”.

At a minimum, a business idea worth investigating further should have one or more Customer Segments and a corresponding Value Proposition to match each Customer Segment. Completing the following steps will validate that your business idea is worth investigating further.

• Identify Value Proposition – Customer Segment pairings.  This step involves pinpointing the type and number of Customer Segment(s) your business is going to serve and what your business’s Value Proposition will be for each of those Customer Segments. This will create one or more Value Proposition – Customer Segment pairings.
• What your Customer Segment is trying to do (i.e. eat dinner, find a date, get in shape…). What are your Customer Segment’s problems (they are hungry and don’t want to cook, they can’t find a suitable boyfriend/girlfriend, they are out of shape…). What does your Customer Segment expect to gain from accomplishing whatever they want to do (eat a tasty meal, find a pleasant date, loose a few pounds and feel better)?
• What your company can offer your Customer Segment (i.e. a good quick meal, a matchmaking service, a place to work out…). How will your offer solve your Customer Segment’s problems? What benefits will your offer create for your Customer Segment? The best business solves real-world problems.

Business Plan Outline

A business plan may contain many types of information depending on the nature, size, and financing needs of the company. One general business plan template can be developed with the help of our JDs, MBAs and expert business planning professionals. While various institutions like the Small Business Administration (SBA) help provide guidelines, it is often best to get your detailed business plan drafted by professionals who know what it takes to get funded and what investors are looking for when they sift through thousands of plans.

This is the title or cover page. This page will contain the information of the names and addresses of business enterprise and entrepreneurs, a paragraph describing the nature of business, and the vision and mission statement of the company.

An executive summary of the comprehensive business plan report should be presented within four pages, summarizing the whole report and emphasizing on business purpose, industry analysis, market opportunity, key elements of the business, revenue, and planning.

This segment of a viable business plan will show the present conditions of the industry, in which the entrepreneur desires to enter. This section should include present and future outlook and demographic developments, analysis of competitors, market segmentation, and industry financial forecasts.

In this segment of the business plan a detailed picture of the venture should be outlined with particular reference to products, services, office equipment, machinery, personnel, size of business, and background of entrepreneurs.

This portion of the business plan is indeed an operational plan. The operational activities of manufacturing, trading and service business are different. So the operational plans of different types of enterprises will be different. For example operational plan of a manufacturing business may cover unique aspects such as manufacturing process,equipment, names of the providers of the raw materials and other inputs of the production process, and so on.

It includes market condition, market strategy, and future market prospect. The pricing, promotion, distribution, product forecasts, and controls should be evaluated carefully for the business plan.

This section includes forms of the ownership, identification of partners or major shareholders, the authority of the managers, management-team background, and the duties and responsibilities of members of the organization.

It is very important for any business plan to assess all the possible risks that may affect the enterprise, prior to starting the business. Assessment of risk must include evaluation of the weaknesses of the enterprise, latest technologies, and contingency plans.

This section shows financial viability of the business plan, in which the entrepreneur must prepare forecasted income statement, cash flow estimates, forecasted balance sheet, break-even analysis, and sources and usages of funds. This section will be scrutinized to determine the profitability and sustainability of the enterprise by the investors, such as the bankers or venture capitalists.

It contains all the backup materials such as legal documents, market research data, lease contracts, and price forecasts from suppliers.

These are the general contents of a business plan that are suggested by the experts, but these contents may vary from business to business. A good business plan should be comprehensive enough to provide a complete picture and understanding of the venture regarding its present status and future growth potential to the prospective investors and other interest groups.

Business Plan Types

Traditional business plans come in many types. They include strategic plans, expansion plans, investment plans, growth plans, operational plans, internal plans, annual plans, feasibility plans, product plans, and many more.

The various types of business plans will always matche the specific business situation. For instance, it is not necessary to add all the background information that is known already, while preparing a plan to use internally and not circulating it to financial institutions or investors. Investors always look for information on the description of the management team, while bankers always look for financial background or history of the company.

The various types of business plans are due to the specific case differences:

Start-up plan is the most standard plan that explains the steps for a developing new business. Start-up plans often include standard topics such as the organization, product or service offering, market place, business forecasts, strategy, management team, implementation milestones, and financial analysis. Sales forecast, profit and loss statement, cash flow statements, balance sheet, and probably a few other tables are included in the financial analysis.

First year monthly projections are shown in the start-up plan, which usually begins with an abstract and ends with appendix.

Click on the following link to learn more about how we approach startup investing .

Business plans that are not usually intended for external investors, financial institutions, or any other third parties are called Internal plans. A detailed description of the organization or the management team may not be included in it. Detailed financial projections like budgets and forecasts may or may not get included in Internal plans. Instead of presenting the whole business plan in the form of paragraph text, Internal plans display the main points in the form of bullet points in slides.

Operations plan can be referred to as Internal plan, which is also known as an annual plan. More detailed information on specific dates, implementation milestones, deadlines, and teams and managers responsibilities are given in Operations plan.

Strategic planning usually does not focus on specific responsibilities and detailed dates, rather it focuses on setting high priorities and high-level options and is also referred to as an internal plan. Unlike most other internal plans, it includes data in the form of bullet points in slides. Organization or management team descriptions are not included in it. Also, some of the financial information is not explained in detail and left while preparing strategic plans.

Some business plans focuses on specific areas of the business or a subcategory of the business, and these plans are referred to as a growth plan or an expansion plan or a new product plan. Depending on whether these business plans are linked to new investments or loan applications, they could be classified as internal plans or not. For instance, like a start-up plan developed for investors, an expansion plan that requires new investment would also have detailed description of the company and its management teams background data. These details will also be required for loan applications. But, these descriptions are skipped in an internal business plan, which is used to design the steps for growth or expansion that is funded internally within the organisation. Although, detailed financial projections might not be given, forecast of the sales as well as the expenses for the new business venture is at least included in more detail.

A very simple start-up plan is the feasibility plan, which include an abstract, mission statement, market analysis, keys to long-term success, and initial cost analysis, pricing, and projected expenses. Feasibility plans helps to analyze whether it is good to continue with a plan or not, to find if the business plan is worth continuing.

Writing a business plan is a highly collaborative affair between the entrepreneur(s) and the business plan writer. The more complex the plan is, the more both the entrepreneur(s) and the business plan writer will need to communicate and collaborate in order to produce a professional, marketable business plan. The business plans we write fall into six general categories. We will discuss each in detail below.

These are business plans for new companies that are 1) trying to raise startup capital to launch the business and 2) the business will serve a clearly defined target market with a service or product that already exists. These business plans are usually the least complex to write because the business models

The hourly fee for work over the project’s estimated number of hours is $20 per hour.

Type 1 and Type 2 business plans are written in five distinct units. Each unit reflects a progressive step in putting the business plan together. Before we can begin writing each unit, we must receive feedback to specific questions that we will send you concerning the topics covered in each specific unit.  After we complete each of the first four units, we will send you a draft of that unit in a Microsoft Word document. You will then have the opportunity to review unit draft and critique or clarify it.

We will make any necessary changes needed for each unit draft. The fifth and final unit will be integrating the information in each of the previous four units into a final, complete business plan. You will then have the opportunity to review and critique that completed business plan draft. We will then correct any and all discrepancies in that final complete draft.

The entire business planning process of writing a Type 1 or Type 2 business plan depends upon our general workload and the speed with which you respond to our requests for information about your business. We estimate that either a Type 1 or Type 2 business plan will take generally 10 to 15 work days to complete (two to three weeks).

These are business plans for existing companies that are 1) trying to raise capital for a new business project or idea and 2) the business project is serving a clearly defined market with a service or product that already exists.

Type 3 and Type 4 business plans are written in six distinct units. Each unit reflects a progressive step in putting the business plan together. Before we can begin writing each unit, we must receive feedback to specific questions that we will send you concerning the topics covered in each specific unit.  After we complete each of the first five units, we will send you a draft of that unit in a Microsoft Word document. You will then have the opportunity to review the draft of each unit and critique or clarify it. We will change or modify any discrepancies you have with the drafts of each unit. The final unit will be integrating the information in each of the five units into a final, complete business plan. You will then have the opportunity to review and critique that completed business plan draft. We will then correct any and all discrepancies in that final complete draft.

The entire process of writing a Type 3 or Type 4 business plan depends upon our general workload and the speed with which you respond to our requests for information about your business. We estimate that either a Type 3 or Type 4 business plan will take generally 15 to 20 work days to complete (three to four weeks).

These are business plans for classic startup companies that are trying to create new products or services to serve new or reimagined markets. These companies are usually looking to raise equity capital from angel investors and venture capital firms. These business plans are far more difficult to write because their business models are largely unproven.

Type 5 business plans are written in five distinct units. Each unit reflects a progressive step in putting the business plan together. Before we can begin writing each unit, we must receive feedback to specific questions that we will send you concerning the topics covered in each specific unit.  After we complete each of the first four units, we will send you a draft of that unit in a Microsoft Word document. You will then have the opportunity to review unit draft and critique or clarify it. We will make any necessary changes needed for each unit draft. The fifth and final unit will be integrating the information in each of the previous four units into a final, complete business plan. You will then have the opportunity to review and critique that completed business plan draft. We will then correct any and all discrepancies in that final complete draft.

The entire process of writing a Type 5 business plan depends upon our general workload and the speed with which you respond to our requests for information about your business. Also, the novelty and newness of the industry you are entering and the market you will be serving are real wild card variables in terms of how much time the business plan will take to complete. We estimate that a Type 5 business plan will take generally 25 to 40 work days to complete (five to eight weeks).

These are business plans for existing companies that are attempting to create new products or services to serve new or reimagined markets. The markets these companies are trying to serve with their new products and services are either undefined or completely new. Usually these companies are seeking financing to raise equity capital (because these business projects are usually risky), but sometimes raising debt capital may be an options for them. These business plans are as difficult to write as Type 5 plans.

Type 6 business plans are written in six distinct units. Each unit reflects a progressive step in putting the business plan together. Before we can begin writing each unit, we must receive feedback to specific questions that we will send you concerning the topics covered in each specific unit.  After we complete each of the first five units, we will send you a draft of that unit in a Microsoft Word document. You will then have the opportunity to review the draft of each unit and critique or clarify it. We will change or modify any discrepancies you have with the drafts of each unit. The final unit will be integrating the information in each of the five units into a final, complete business plan. You will then have the opportunity to review and critique that completed business plan draft. We will then correct any and all discrepancies in that final complete draft.

The entire process of writing a Type 6 business plan depends upon our general workload and the speed with which you respond to our requests for information about your business. Also, the novelty and newness of the industry you are entering and the target market you will be serving are real wild card variables (in terms of how much time the business plan will take to complete). We estimate that a Type 6 business plan will take generally 25 to 40 work days to complete (five to eight weeks).

Running a Business Is Tough, Especially Without a Business Plan

If you are running a business, it’s very important to have a business plan made up and it’s just as important to stick to your business plan once you create it. When you have a business plan you are setting objectives for yourself and you are establishing the priorities you have for your business. It also makes it much easier to reach the goals that you set for yourself as well which is always crucial in a business.

Think of your business plan as a map for your business, without this map you and the way you run your business are traveling blindly which is very dangerous. You want to have a clear idea of where your business is headed and where you want it to go and a business plan outlines what will steer you in the right direction.

Looking for a Loan?

If you are looking to get a loan for your business, you’re going to need a definite business plan. Most banks won’t even consider giving you a loan until they see a business plan. If you don’t have a business plan they’ll think of you as a risk since you don’t truly know where you want your business to go. When you present your business plan to a bank to get the loan you desire be sure that you go over what your business is all about and why you started it. You will also want to list for them what you see in the future of your business as well.

Looking for a Business Investment?

Having a business plan doesn’t mean that you will surely get the investment you desire but not having a business plan will surely mean you will not get the investment you desire. Investors need to know what exactly they are investing in and they will look to your business plan to understand what the idea of the business is, your businesses track records, the technology behind your business and of course yourself. You will absolutely not get a business investment without having a business plan because the investors won’t have anything to help them understand what your business is all about.

Have Business Partners?

A business plan is what defines your agreements that you have made with your business partners which means you’ll have a lot of issues if you don’t have a business plan if you are in this business with more than just yourself. A business plan is the only way to keep everything between you and your partners fair and it ensures that everyone knows what the ground rules are for the business and where each and every one of you stand.

Communicating with a Management Team Won’t Work Without a Business Plan

How can you and your management team effectively run your business without being able to see where you all want it to go? The answer is, you can’t. You can’t steer your business down the right path if nobody knows exactly where it should be going and your management team will feel the exact same way. There will be a lot of different problems that will come up during the day-to-day work and it will be very challenging for you to face them and communicate all of these problems when you or your management team don’t truly know where the problem falls under in the business plan.

Do you need a business valuation?

Whether you need to place a value on your business to sell it or for taxes, a business plan is an essential part in this. It’s always important to know what your business is worth even if you don’t plan on selling it at all, you may need to know what it’s worth when it comes to planning an estate or an unexpected divorce could come up. You always should know what your business is worth an a business plan will help you understand that and keep track of it.

When it comes to developing a business plan, many people believe that it’s too difficult or it’s just too time consuming to do but what those people don’t realize is that putting together a business plan will save you in many ways and you it will help your business in more ways than you can imagine.

Developing a business plan is not that much of a challenge and it will very valuable to you in the future. Nobody should ever try to do something big without planning it first and this includes running a business. You have all these business plans in your head so just lay those plan out on paper so you have tangible evidence of your business and what you want to do with it.

A business plan a very crucial part in creating and owning a business so take the time and effort in creating one and you will benefit from it much more than you think and you’re business will run much more smoothly.

A business plan’s executive summary section provides a round-up of the main points of your business plan. Although the summary will appear at the top of the final printed piece, the majority of business plan developers do not write the executive summary until the last moment. The summary forms the gateway to the remainder of the plan. If you do not write a business plan executive summary it well, your target audience will not read beyond the executive summary.

What should be included in an executive summary?

When a regular business plan is being written, the following should usually be incorporated into the opening paragraph of the executive summary:

• The name of the business • The location of the business • The service or product being offered • The aim of the plan

A further paragraph should underline significant points, for example projected profits and sales, profitability, unit sales, and keys to success. Give the details you need everyone to notice. This is also a sensible point at which to include a highlights chart, a bar chart depicting gross margin, profits before taxes and interest, and sales for the three years to come. These numbers must be explained and cited in the text.

Different summaries are required for different plans

Internal plans, for example annual or strategic plans, or operations plans, do not need such formal executive summaries. With such a plan, make its purpose obvious, and be certain that all the highlights are mentioned, but other details – such as the description of your service or product, and location – may not need to be repeated.

Be concise with your summary

If investment is what you are seeking, mention this in your executive summary, specifying the amount of investment required and the level of equity ownership that will be provided in return. It is also a good idea to include some highlights regarding your competitive advantage and your management team.

If it is a loan that you are looking for, say so in the executive summary, specifying the sum required. Do not include details of the loan.

What is the right length for an executive summary? There are differing views from experts about the ideal length of an executive summary. Some recommend taking only one or two pages, while others suggest a more in-depth approach, with the summary lasting for anything up to ten pages and including sufficient information to be used instead of the full plan. Although it was once common to write business plans of 50 or more pages, today’s lenders and investors expect a more focused, concise plan.

A single page is the perfect length for an executive summary. Keep everything brief, emphasizing the major aspects of your plan. You are not trying to explain every last detail, simply piquing your readers’ interest about the rest of the plan and encouraging them to read further.

Be careful not to confuse a summary memo with an executive summary. The executive summary is the opening section of a business plan, while a summary memo is a distinct publication, usually running to no more than five or ten pages; this is intended as a substitute for the full plan for the benefit of those who are not yet in a position to read the full plan.

In general, a financial plan is a set of steps or goals put together for the business which is intended to help attain and accomplish a final financial goal. It shows the future and current financial state of a business by using known variables to forecast future cash flows, asset values and withdrawal plans. The plan shows financial viability of the business plan, in which the entrepreneur must prepare forecasted income statement, cash flow estimates, forecasted balance sheet, break-even analysis, and sources and usages of funds.

Why is a financial plan important? Investors and bankers must have an incentive to invest in your business. Profitability gives them an incentive to invest.  If your plan is weak and unorganized it will portray your business as unsustainable. Investors and banks will see you only as a risk and be unlikely to give the kind of capital needed for your business. For this reason you need to create a solid financial plan which will convince investors that your business is worth investing in.

Here at InvestmentBank.com we will design for you a financial plan intended to demonstrate to the bank and your investors that your business is sustainable and profitable.  We cannot guarantee you the investments you are hoping for, but we can guarantee that if you don’t have a plan, you will also not receive your hopeful investments. Let us guide you in the planning process.

One core component of market analysis is market forecasting and proforma financial statement drafting. The future trends, characteristics, and numbers in your target market are projected in market analysis. In a standard analysis process, the projected number of potential customers is divided into segments.

Generally, market size is not the only factor that is determined, but the market value is also very important. For instance, small business customers spend around 4 times as much as the home office customer, even though they are 2.5 times smaller than their high-end home segment in terms of customer size. So, in terms of dollar value, the small business market is often considered very important.

Market value is calculated through simple mathematics. The number of potential customers in the market is multiplied by the average purchase per customer. Market value is calculated by taking the average number of customers in each segment over a period of time and then multiplied that figure by the average purchase per customer. In market analysis table, the other items are only subjective qualities that help with marketing. These points are allotted to people who are assigned in preparing marketing information.

Reality Checks Reality checks are always important for market forecast. Finding a way to check reality, while performing a forecast is essential. If you are able to estimate your total market value, then you would relate that figure to the estimate sales of all their competitors to check if the 2 figures relate to each other. The import and export value and production values are checked in an international market to find whether the annual shipments estimates appear to be somewhere in the same range as the estimated figures. To check your results with the forecast, you might also check for some given years with the vendors, who sold products to this market. Macroeconomic data can also be overlooked to confirm the size of this market compared to other markets with same characteristics.

Target Focus Review

Market analysis should help in the development of strategic market focus, which means selecting the key target markets. This is considered the critical foundation of strategy. We speak on this as market positioning and segmentation.

Company will not try to address the needs of all market segments under normal circumstances. While selecting target market segments, understand the inherent market differences, competitive advantage, keys to success, and strengths and weaknesses (SWOT analysis) of your organization. Everyone wants to focus on the best market segment, but the market segment with the maximum growth or the largest market segments, might not be necessarily the best one to address. The best market segment to address would be the one that matches your own company profile.

It is not a good idea to use page count as a gauge to determine the length of a business plan. A business plan with 20 pages of text alone can be considered to be longer than a 35-page plan which is well laid out with bullet points, helpful images of products or locations and charts that highlight vital projections.

In fact, a plan should be measured by its readability as well as the summary provided. If the business plan is prepared keeping these aspects in mind, the reader will be able to get an overall idea in about 15 minutes by quickly browsing through the key points.

Illustrations, headings, format and white space contribute to improving the appeal of the business plan. The summary section is a very important aspect of any business plan. The salient points of the business plan must be clearly visible to the reader as it is done in a presentation.

It is unfortunate that many people still tend to measure the worth of a business plan by the number of pages in it. In this connection, some of the key aspects to be kept in mind are as follows:

• Practical business plans prepared for internal use only can have five to ten pages
• Business plans of large companies may have hundreds of pages

A standard expansion or start-up plan prepared for presentation to outsiders can have 20 to 40 pages. However, it should be easy to read with text well spaced and have bullet point formatting, illustrations in the form of business charts and financial tables in the condensed form. The details of financial aspects can be organized in appendices.

However, the  length of the business plan  is decided by its nature and the purpose for which it is prepared. Some of the questions that can be considered when drafting out a business plan in order to decide on its length are:

• Should descriptions about the company as well as the management team be included as outsiders are likely to read the business plan?
• Should a standalone executive summary be provided for the business plan?Is there a need to incorporate plans, blueprints, drawings and detailed research?Is it an investment proposal?
• Should it be worded in such a way as to clear legal scrutiny?

The form of the business plan is actually decided by the requirement for which it is to be prepared.

Often, venture contests specify a limit of 30 pages or 40 pages at times, but rarely 50 pages, including the appendices that contain detailed financial statements, for a business plan. Some contestants make very bad options because of page restrictions and cram the content using thick texts and bold typefaces, making it worse and not better.

Most often,  good plans have as many as 30 to 40 pages . The plans have 20 to 30 pages of text, excluding graphics to illustrate locations, menus, designs, etc. and appendices consisting of team leaders’ resumes, monthly financial projections, etc. Some pages may have to be included for standard financials. This calls for tables for sales, income and cash flow statement, balance sheet and personnel on a monthly basis. In the body of the plan, annual numbers may also have to be included.

It is not prudent to reduce the length of the plan by cutting down on helpful graphics. Readability is more important than the length. Making use of business charts to illustrate numbers makes it easier to understand. Make use of drawings and photographs to depict locations, sample menus and products. It is important to use as much illustration as possible. Finally, extra graphics such as clip art that are not relevant to the matter at hand may better be avoided.

Business Plan Market Forecast

Proper market forecasting helps provide budgetary allocation for coming market trends, innovative shifts and internal financial allocation. It is a key component of proforma financial statements and  professional market research . Intelligent estimates are best backed by quality, time-intensive research. That’s where we come in. Rather than producing a business plan based on educated guesswork, we use a litany of some of the industry’s best market research tools available to some of the most prestigious universities. Many a business plan software tools can also aid in your research work. Typically business plan software also includes industry-specific templates, which can help with how you approach your niche or even the broader market.

Today’s technology provides access to large data-sets for current and past information. Obtaining the data is not difficult. We help to analyze, interpret and make qualitative assumptions about future trends. By using both qualitative and quantitative approaches we work to derive parallel data forecasts for future trends within your business, your industry and the market as a whole. The future may be uncertain, but with the help of expert modeling, it can be simplified, understood and, in some cases, accurately predicted.

Many business planners lack the luxury of funding a previously-published market forecast from which to glean relevant data. In many cases, free published forecasts can help to paint a meaningful picture. However, when professional forecasts are not forthcoming on market size, supply/demand metrics and potential company penetration, it is usually left up to thoughtful opinion and expert “reverse engineering” to determine any meaningful dribble from the data.

Without free forecasts, a business owners may feel forced to purchase expensive data sets, market research reports and published articles to determine helpful data about the potential of a business idea. Where we can, we utilize past relationships and access to thousands of reports through expensive subscriptions to find the data-set that best fits your business goals for the plan you may be crafting.

Apart from the more obvious sources like the Internet, library references and popular publications, we provide access to industry-specific reports and paid-for research studies not accessible to would-be entrepreneurs. We fully recognize that data forecasting is part art and part science, but we prefer to adhere to more quantitative methods so as to make your business plan as convincing and relevant as possible for its particular audience.

Extrapolation of past data with large populations and data-sets helps to provide reliable predictions about future trends and outcomes. Understanding past growth, market saturation and the competing forces that can impact a company’s success in market entrance are absolutely vital components of the marketing portion of your business plan.  Past data is never a fail safe, but it can act as a healthy gauge of future trends in a marketplace.

When no relevant data on current conditions within your market can be found, we work with the available numbers to create plausible models that form convincing arguments for your particular plan goals.

Perhaps the greatest downfall of many potentially-successful business plans is the disconnect between gathered data, assumptions, external and internal market forces and projections. Without a common sense litmus test, many plans fail to deliver relevant metrics to help make business funding possible. Performing common sense tests often requires qualitative work outside the realms of the given data. Making phone calls to Chambers of Commerce, trade organizations and market reporting agencies to obtain a wider base and deeper foundation of information is extremely helpful when crafting assumptions.

Making wild guesses about targets, markets and industries without thoughtful research can be detrimental to fulfilling the goals of your particular business plan. BusinessPlanning.org helps to remove the guesswork and provide your business with relevant data from which to tell a compelling story.

Correctly identifying the structure and competitive dynamics of the industry you are proposing to enter will create a good general point of reference for judging whether you should enter it or not. If the general industry profile does not appear attractive to you, and you are planning to offer value propositions that have close industry substitutes, then this may be an important signal that your proposed venture may need to be reconsidered. But if the industry profile looks attractive, then this could be a sign that you are on to something.

A fantastic tool to analyze an industry that serves a Defined Existing Market is Porter’s Five Forces Model. Michael Porter is a professor at Harvard Business School and published this strategy model in his seminal work,  Competitive Strategy . Porter’s model is powerful. It demonstrates how an industry’s attractiveness to either its current competitors or a new entrant is an amalgam of disparate, and sometimes contradictory, factors.

To help determine if your business idea will be worth the investment of time, money and energy, you will conduct two sequential analyses using the Five Forces Model. The first Five Forces analysis will be of the overall industry that you are contemplating to enter. The second Five Forces analysis will be of the particular market segment(s) you would be choosing to serve with your Value Proposition(s).

The figure below illustrates how Porter’s model works by focusing on the five forces that shape competition within an industry: 1) the risk of entry by potential competitors, 2) the intensity of the rivalry among established companies within an industry, 3) the bargaining power of suppliers, 4) the bargaining power of buyers, and 5) the similarity of substitutes to an industry’s value propositions.[1]

The main point of Porter’s Five Forces Model is as follows. The stronger that one of the five competitive forces becomes, the greater the overall competitive rivalry becomes within the industry. The more intense the competitive rivalry becomes, the harder it is for ventures within the industry to raise prices or maintain high prices to reap greater profits. The less in average profits that a firm in the industry is able to earn, the more intense the rivalry for customer demand is among the industry’s rival competitors.

The opposite is true also. The weaker that one of the five competitive forces becomes, the less intense the overall competitive rivalry among the industry’s firms is. If rivalry amongst the industry’s firms decreases, the easier it becomes for the industry’s competitors to raise either raise prices or reduce their cost structure (by lowering their value propositions’ quality) and ultimately earn higher profits. The higher the average level of industry profits, the less intense the rivalry for customer demand will be among the industry’s rival competitors.

The importance of each of the five forces is situationally dependent upon the unique facts and circumstances of each industry. For example, the overall threat of new market entrants might be insignificant in determining whether an entrepreneur wants to enter an industry in its growth phase, but it may be a paramount factor in a mature industry.

I developed another diagram (below) to show how the five forces within Porter’s model interact with each other. As you can see, four of the forces (risk of entry by potential competitors, bargaining power of suppliers, bargaining power of buyers, and threat of new entrants) each act upon the fifth force – the intensity of rivalry among the industry’s competitors. This means that if the bargaining power an industry’s buyers increases, the intensity of rivalry among industry competitors will increase. This causal relationship works in only one direction – a change in any of the forces ultimately either increases or decreases the intensity of rivalry among the industry’s competitors. Therefore a change in the intensity of rivalry will not cause change in one of the other four forces.

[1] Charles W. L. Hill and Gareth R. Jones,  Strategic Management Theory , Eighth Edition, Houghton Mifflin Company, pg. 45, 2008.

Macroenvironmental forces are changes in the broader economic, political/legal, social, technological, demographic, and global forces beyond the industry being examined. Any one of these six forces can change or effect any one of an industry’s five internal competitive forces. In conducting an industry’s initial Five Forces analysis – which is a snapshot measurement of an industry’s present competitive environment – these macroenvironmental forces are automatically accounted for. They are already included because an industry’s competitive environment is an aggregate of these turbulent and often conflicting forces. But entrepreneurs and business owners must also make educated guesses about how macroenvironmental trends and forces will shape the industry’s attractiveness into the future, both in the short run and in the long run.

Below is a diagram that visually represents how each of these seven forces can affect an industry’s Five Forces as the future unfolds.

The Six Macroenvironmental Forces

The following is a detailed analysis of the seven macroenvironmental forces touched upon above.

Macroeconomic forces affect the general economic well-being of the nation or the region in which an industry operates. [1]  The following are the major macroeconomic forces that can affect an industry’s ability to deliver an adequate economic return.

• The rate of growth for the economy.  Economic expansions cause a general rise in aggregate consumer demand while recessions cause a general drop in aggregate consumer demand. Because aggregate demand for goods and services rises during economic expansions, an industry’s intensity of competitive rivalry, broadly speaking, will usually decline. The reason is that generally the market demand for an industry’s value propositions will cause an expansion in the industry’s revenue. Therefore its possible for the industry’s firms to generate revenue growth without fighting their competitive rivals for market share. Conversely, a decline in economic growth or a recession causes general aggregate demand to contract . This generally shrinks the amount of revenue an industry can earn and may cause price wars, consolidations and bankruptcies.
• Interest rates. Interest rates affect the cost of borrowing for consumers, thus affecting aggregate demand. Higher interest rates generally makes the cost of borrowing more expensive and can dampen demand for real estate and purchases of major assets (cars, durable goods). Ultimately, higher interest rates can lead to higher industry rivalry if the industry is directly or tangentially affected by borrowing costs. Higher interest rates also affect business’ cost of capital. High interest rates may restrict a business’s ability to invest in new equipment or facilities. On the other hand, low cost of capital makes it substantially easier for established businesses to borrow and invest into expanding their operations.
• Exchange rates.  Exchange rates either make imports more or less expensive for domestic consumers and exports more or less expensive for foreign consumers of domestically produced value propositions. A weak dollar makes imported value propositions more expensive and domestically produced value propositions comparatively less expensive. A strong dollar makes foreign value propositions less expensive and domestic value propositions comparatively more expensive.
• Inflation/Deflation.  Inflation is the decrease in the purchasing power of a nation’s currency over time. Inflation can destabilize an economy, slow economic growth, higher interest rates and increased currency volatility. [2]  Increasing inflation makes business planning very difficult because the future becomes less predictable. Uncertainty makes companies unwilling to invest in growing their operations. On other side of the coin is deflation. Deflation is even more potentially damaging than inflation is. If the purchasing power of currency is increasing over time, firms and consumers will hoard their cash. This will causes a self-reinforcing cycle of low or negative economic growth. Usually the best inflation formula for stable economic growth is a low, steady inflation rate.
• Wage Levels.  The price of labor from industry to industry can have a significant impacts on an industry’s costs of production. High or increasing industry labor costs can make substitute value propositions more attractive for the industry’s customers. Low or decreasing industry labor costs can make substitute value propositions less attractive for the industry’s customers.
• Level of Employment:  High unemployment levels give firms greater leverage over their employees in keeping wage increases down or in actually decreasing labor costs to the firms in an industry. This can reduce the industry’s cost structure and thus raise the industry’s average profitability.

Legal and political forces are the results of changes in laws and regulations within the country your business operates in. [3]  Political and legal developments can be both opportunities and threats. The following are the major legal and political changes that can impact the fortunes of industries.

• Current and Expected Levels of Taxation.  High tax rates can affect the decisions of entrepreneurs to engage in business activities or reduce the ability of companies to reinvest profits in expansion. But often the most important effect of taxes are not the levels of taxation, but the different effective tax rates for different activities. For example, the oil and gas industry, ecommerce businesses and the video game industry get significant tax breaks that reduces their effective tax rate. This can raise or lower the attractiveness of getting into certain industries.
• Import/Export Quotas and Tariffs.  Tariffs and import/export quotas affect the costs of value propositions imported into a country and those exported to other countries. Raising or lowering tariffs or trade quotas can cause demand for the value propositions of the industries affected to increase or decrease. An example of a broad change in trade quotas and tariffs was the implementation of the North American Free Trade Agreement (NAFTA).
• Government Grants.  Government grants are programs that can provide nascent industries with seed capital and resources. Governments (state, local and national) often provide businesses with financial support if the business pursues profit opportunities that align with a government’s policy goals. An example of a significant government grant program is the U.S. government’s Small Business Innovation Research grant (SBIR).
• War/Terrorism.  War and terrorism can increase regulations and transaction costs associated with global travel or insurance. Wars can also saddle nations with large medical costs to society. Wars and anti-terrorism efforts can also increase military related contracting opportunities.
• Quid Pro Quo.  Many industries try (and often succeed) in influencing politicians to enact laws that are favorable to their bottom line and create barriers of entry against potential competitors. A recent example of this was the influence the health care and pharmaceutical industries exerted upon the U.S. Congress during the passage of the Affordable Care Act in 2009.
• The Regulatory State.  In the U.S., most of the regulations that affect business and the general public are promulgated through various government agencies. Often, small changes in regulations can lead to desired or unintended consequences for a number of industries. Here is a small sample of legal and regulatory issues that are managed by various state and federal agencies: environmental protection, corporate governance, intellectual property rights, employment law, criminal law, tort law, food & drug regulation, public health… In the United States (and most other industrialized countries), virtually every area of commerce is affected by government regulations and laws. For any given industry, changes in these regulations and laws can be either threats or opportunities.

Social forces are changes in the social mores and values of a society and how they affect any particular industry. Social changes can create both opportunities and threats for any industry.

• Social and cultural forces specifically refer to changes in the tastes, habits and cultural norms within a significant segment of a country’s population. One example of a social trend is the growth of the organic and local food movements in the U.S. over the last thirty years. The local and organic food movements have created an opportunity for some small farmers near large population centers, but this movement has also created a potential threat to large mono-agriculture farms.
• Cultural attitudes can shift drastically over time, rendering once commonplace habits and activities to no longer be widely accepted or tolerated. An example is the decline of smoking in the U.S. Smoking used to be tolerated in most indoor spaces forty years ago. Now it is either banned or highly frowned upon and the public has become very aware of the health risks smoking causes. This has led to a significant decline in the percentage of adults in the U.S. who smoke. Conversely, marijuana use, which was highly frowned upon by the majority of U.S. society over forty years ago, has become more widely accepted among the public. As a result, many state laws are changing to reflect this increased tolerance of marijuana use.
• Changes in what society considers fashionable are in a constant state of flux. Various fads and crazes rise and fall, sparking opportunities and threats for the industries that capitalize on these trends. Examples of changes in fashion, fads or crazes are: rock n roll in the 1960s, disco music in the 1970s, the Pet Rock, the Hula Hoop, Cabbage Patch Dolls…

Technological change is a primary driver of Schumpeter’s “perennial gale of creative destruction” among business ventures. Technological forces can render established, profitable value propositions obsolete virtually overnight and usher into existence exiting new business ventures. Because of the dual role technological change (both creative and destructive) plays in our society, it can be both an opportunity and a threat.

• Technological forces can cause industries to move through their life cycles more quickly. They can also disrupt an industry in the beginning or middle of its life cycle, rendering it obsolete or changing it so radically that most of the industry’s competitors cannot keep up. Essentially, technological change makes the life cycles of industries more volatile and unpredictable.
• Technological change can lower the barriers of entry for many industries. An example is the internet made it much easier for a potential retailer to sell products to its customers through a virtual storefront versus acquiring, stocking and running a brick and mortar facility. The lowering of barriers of entry tends to increase an industry’s intensity of rivalry, leading to both lower prices and industry profits.
• Technological forces can also reduce transaction costs. Reducing transaction costs is often destructive to the industries that thrive on them (auction houses being replaced by eBay or newspaper classifieds being replaced by Craigslist). Within an industry, a reduction in transaction costs driven by technological change usually leads to an increase in the industry’s intensity of competitive rivalry.
• Technological change can either reduce or increase customer switching costs. An example of how technological forces can reduce customer switching costs are instant price comparison applications on mobile devices. These give the consumers the ability to identify which retailers offer the same value propositions at the lowest prices. Technological forces can also increase customer switching costs. An example is Facebook or eBay. Both of these websites lock in users due to their network effects – alternative market choices do not present as much value because they are not as big.
• Technological forces can unleash changes in industries far removed from the industry in which the technology originated. An example of this is the Internet. The Internet has caused massive sea changes in industries only tangentially related to it such as retail, the news industry, book publishing, and matchmaking services (online dating).

Demographic forces are changes in the characteristics of a population of people. These characteristics can be sex, age, education, race, national origin, social class… Changes in demographics can present businesses with both opportunities and threats.

• Changes in a population’s age distribution can present both opportunities and threats. For example, in the U.S., the population of elderly people is growing more rapidly than the population as a whole. This presents an opportunity for industries who provide long term assisted living, the financial industry (reverse mortgages and retirement planning), and both the health and pharmaceutical industries. It also presents a threat to certain industries like funeral and burial providers (if the general population is living longer, it means people are dying at a slower rate).
• The rapid increase of the Hispanic population in the U.S. has led to an increase in Spanish speaking music, television and news in the U.S. This represents a growing opportunity for food and media companies that market to Latinos.

Global forces are changes that occur within and beyond the borders of the country a business is operating within and affect how a company can operate on the international stage. Global forces can present both opportunities and threats to an industry.

• The economic growth rates of other countries can play important roles in determining the demand for imports and exports. As barriers to trade fall, national economies become more subject to the winds of international commerce and capital flows. This international liberalization of trading agreements can allow domestic firms greater access to foreign markets. An example of the liberalization of international trade is the outsourcing trend over the last two decades from industrial economies in the west to developing economies in Asia.
• Climate change is another example of a global force. The long term changes to the world’s climate will profoundly shape countless industries in the decades to come. Climate change can offer both opportunities and threats to different industries. For example, the wine industry in France may have to experiment with new varietals due to changes in temperature and rainfall expected by scientists in the coming decades. Climate change also presents some industries with opportunities. One example is the shipping industry. The rapidly dwindling polar ice cap in the Arctic Ocean presents the possibility that new, more efficient shipping routes might become available.

[1] Charles W. L. Hill and Gareth R. Jones,  Strategic Management Theory , Eighth Edition, Houghton Mifflin Company, pg. 66, 2008.

[2] Charles W. L. Hill and Gareth R. Jones,  Strategic Management Theory , Eighth Edition, Houghton Mifflin Company, pg. 68, 2008.

[3] Charles W. L. Hill and Gareth R. Jones,  Strategic Management Theory , Eighth Edition, Houghton Mifflin Company, pg. 70, 2008.

A good Five Forces analysis will cause you to sift through a lot of data, much of it conflicting and confusing. Below is a series of scorecards that try to condense the most important points from your Five Forces analysis and present them to you in an easily understandable format.

The scorecards rate the attractiveness of an industry’s five forces  from the perspective of a new venture attempting to enter the industry . Each force gets its own scorecard. Each scorecard has the main factors that help determine the strength the force exerts upon the industry. A factor’s attractiveness is rated on a five category scale that ranges from Highly Unattractive, Mildly Unattractive, Neutral, Mildly Attractive, to Highly Attractive. For each factors’ rating, the top line (yellow) indicates the level of the factor’s level of attractiveness at present. The bottom line (green) is the entrepreneur’s rating of what he or she thinks each factors’ level of attractiveness will be in the future. The level of future attractiveness for a factor is determined by analyzing how macroenvironmental forces will affect the industry in the future.

Directly below is a hypothetical example scorecard of an industry’s intensity of rivalry:

Remember, none of this is exact science. There is no mathematical formula that determines whether you should enter an industry or not. The purpose of this exercise is to ensure that you, the entrepreneur, have thoroughly thought about the nature and future of the competitive environment you are proposing to jump into.

Force One: Intensity of Rivalry among Industry Competitors

Force Two: Risk of Entry by Potential Competitors

Force Three: The Bargaining Power of Buyers

Force Four: The Bargaining Power of Suppliers

Force Five: The Availability and Similarity of Substitutes to an Industry’s Value Propositions

And finally, the table below is a final snapshot evaluation of the industry’s attractiveness. To fill out this table, you should look at your ratings in the tables above as guidelines. The importance of the forces, and the factors that comprise them, will change from industry to industry. It will ultimately depend upon the unique facts and circumstances of each industry being evaluated. Therefore you will have to use your best judgment.

Overall Evaluation of Industry’s Attractiveness

Porter’s Five Forces – Risk of Entry

Profitable industries are like chum in the water for new competitors. The smell of money to be made will attract potential competitors to circle an industry, try to enter it and look for an easy meal. The only thing stopping a myriad of potential competitors from entering an industry are  barriers to entry  – a business version of a steel shark cage.

Profitable industries attract new market entrants – potential competitors. Potential competitors are companies that are not currently competing in an industry, but possess the ability to do so if they choose. Theoretically, if it cost nothing to form a company and enter an industry serving a profitable market, new firms would flood into that industry until the industry’s average profit margin shrank to zero. But we don’t live in a frictionless, theoretical world and different industries have wildly different levels of profitability. Barriers of entry are what discourages new companies from entering a profitable market and making a killing.

Barriers of entry benefit established companies within an industry by protecting them from new competition and preserving their profit margins. Low barriers of entry leave an industry wide open to new market entrants. The results to an industry with low barriers of entry are lower profits for the companies within that industry will inevitably result.

Therefore, established firms within an industry have great incentive to erect barriers of entry to keep the number of potential rivals to a minimum. Some barriers of entry are passive and a natural result of the industry’s operations. An example of this is economies of scale. But companies often take active steps to discourage new companies from entering their industries. Examples of this are when companies create brand loyalty or try to purposely raise their customers’ switching costs. The reason is simple – the more companies that enter the industry, the more difficult it is for established companies to maintain their market share and protect their profits.

The risk of entry by potential competitors is a function of the industry’s profitability and the height of its barriers to entry. The higher an industry’s average profit margin, the more enticing it is for new competitors to jump into the fray and wrestle market share from the incumbent companies. High barriers to entry can deter potential competitors from trying to enter an industry and serve its market segments. The higher the cost of entry into an industry, the weaker the competitive force (the risk of entry by potential competitors) is and generally translates into higher average industry profits. Important barriers to entry include the following:

Capital Requirements  – If it takes a great amount of money or assets to enter the industry, this can be a significant barrier of entry for firms who wish to enter it. Usually industries with high fixed costs have high capital requirements (i.e. factories, warehouses, computing assets…).

Economies of Scale  – Economies of scale is where the companies in an industry enjoy diminishing per unit costs for their value propositions as the volume produced increases.

Brand Loyalty  – Consumers often have preferences for the value propositions offered by established companies due to familiarity and reputation.

Absolute Cost Advantages  – Other entrants cannot hope to match the established firms within the industry’s cost structure. Absolute cost advantages arise from three sources: 1) possessing unique and critical resources (patents, trade secrets, or accumulated experience), 2) control of particular inputs of production (i.e. fertile farm land, a prime piece of commercial real estate…), 3) access to cheaper funds because existing companies represent lower risks than new entrants.

Customer Switching Costs –  High customer switching costs occur when customers resist spending the time, money and energy to switch from the current supplier of a value proposition to one offered by a different company, even though that alternative value proposition may be of greater value.

Government Regulation –  Government regulations, and the lack of them, can be a significant barrier of entry for potential new entrants into an industry. An example of this would be environmental regulations placed on coal mining companies and their operations.

We will now dig deeper into how to identify and analyze these potential barriers of entry, and ultimately understand how they affect the competitive rivalry within an industry.

Capital costs mean the startup costs of your business idea that must be incurred before you can commence operations. Basically, this is the total amount of money you need to spend (on equipment, employees, facilities, legal, accounting….) before you can hang your “Were Open!” sign in your shop window. For some asset intensive businesses, such as a full service health club or a golf course, initial capital costs can be extensive. For other businesses that use relatively few assets, such as an internet marketing business or a hotdog stand, initial capital costs can be relatively small.

For many aspiring entrepreneurs without a lot of financial resources, capital costs can be the most daunting barrier of entry of all. Many industries are able to maintain decent profit margins simply because the capital costs required to enter the industry are significant and insurmountable for many. Also, your time can be thought of as a capital asset too. Your investment of time in pursuing a business endeavor represents an opportunity cost on your part – you are giving up time that you could be working for someone else (and the income that entails) in exchange for pursuing your entrepreneurial ambitions. For example, it may take $100,000 and one year of full time work to create and open a business. If you had to give up a $50,000 per year job in order to pursue the endeavor, the real capital cost for you to start your business would be $150,000, not $100,000.

Another example of this would be opening a law practice. Legal services, in the United States, is a fragmented industry that has an average industry profit of 19.5%. This is a very attractive profit margin. Furthermore, the capital cost required to start a legal practice – purely from creating the actual legal services business – is relatively small. A lawyer needs a laptop, access to research materials, a place to meet clients, and some office equipment. This may cost as little as $10,000 in initial startup capital. But this does not represent the actual capital cost to start a law firm. To actually open a law firm and practice law, a lawyer would have needed to: 1) obtain a law degree (lets estimate $120,000), not work for three years while going to law school (lets estimate $150,000 for three cumulative years), get a state bar card ($3,500 for the test and the study course), and not work for three months while studying for the bar (lets estimate $12,500). Then, an only then, a lawyer could spend $10,000 on opening a legal practice. The real cost of this venture, both in absolute capital costs and opportunity costs, would be $296,000.

So the real capital cost of opening a law firm and practicing law (and being in an industry with an attractive 19.5% profit margin) may be at least nearly $300,000. This capital cost represents a serious barrier of entry to many people who would want to enter this industry, but balk at the $300,000 price tag that it requires.

Key Questions:

• What are the average total capital costs for entering the industry you proposing to enter?
• Is the average profit margin for the industry you are proposing to enter enough to service the capital costs required from a typical new market entrant?

Economies of scale arise when unit costs fall as a firm expands its output. In other words, the more of a value proposition a company produces, the less per unit the company pays to produce those value propositions. Sources of scale economies include 1) cost reductions gained by efficiently creating a massed produced output, 2) discounts on bulk purchases of raw materials, and 3) cost benefits gained from spreading production costs and marketing and advertising over a large production volume. Some industries benefit greatly from economies of scale (i.e. the beer industry, the auto industry…). Other industries do not enjoy economies of scale much at all (i.e. nail salons, massage therapy, dry cleaners…).

The following are examples of economies of scale: 1) when the creator of a product gets bulk discounts on the purchases of raw materials for their products, 2) spreading fixed production costs over a large production volume, 3) cost reductions through mass-producing a standardized output, 4) cost savings associated with spreading marketing and advertising costs over a large volume of output. Most manufacturing industries, such as pulp and paper products or textiles, are examples of industries with economies of scale. If economies of scale are a factor in an industry, then many small producers are at a disadvantage because their per-unit costs will be higher than that of their larger competitors.

An industry whose rivals have significant economies of scale creates powerful barriers to entry for an aspiring new entrant to overcome. First, the established firms will have a substantial cost advantage over a new rival. Second, because high economies of scale imply high fixed costs (equipment, facilities), it is critical that these companies protect their market share at all costs. If their sales volumes decrease, this can render them incapable of sustaining their high fixed costs.

Companies, who try to match the existing industry competitors’ economies of scale, must enter the industry as a large producer to overcome this problem. But to do so, it must raise enough capital (to purchase the necessary assets and facilities) to match its competitors’ economies of scale. This becomes another barrier of entry in itself. Furthermore, if a new company enters an industry with a large capital investment (to match current industry competitors’ economies of scale), the increased supply of products the new company brings to the market risks depressing prices and may trigger a price war with established industry competitors.

• Does the industry you propose to enter have significant economies of scale (where the per-unit costs for producing a good or service decrease significantly as the volume of production increases)?
• Does the industry you propose to enter have high fixed costs (equipment, facilities, or significant R&D requirements)?
• Do the suppliers of the industry you propose to enter give significant volume discounts and payment terms to large-volume buyers?
• Within the industry you are proposing to enter, do its company’s marketing and sales budgets increase, on a per unit basis, proportionally to sales of its value propositions, or do the costs of its company’s sales and marketing budgets decrease, on a per unit basis, with an increase in the sales volume of its value propositions?

Brand loyalty is when consumers develop and hold a preference for a particular company’s brand of value propositions. Significant brand loyalty makes it difficult for new market entrants to wrestle market share away from established industry brands. Examples of value propositions with strong brand loyalty are mass consumer products such as beer (Budweiser, Coors and Miller), soft drinks (Coca Cola and Pepsi), or tobacco products (Marlborough and Winston-Salem’s).

A company can also cultivate brand loyalty by developing innovative value propositions. Probably the most successful major company over the last decade that has leveraged innovative value propositions into brand loyalty has been Apple.

A venture may be able to sidestep an industry’s brand loyalty barriers of entry by entering the premium category of product markets. An example would be Dry Soda or small craft micro-brewers.

Significant brand loyalty makes it difficult for new entrants to take market share away from established industry brands. A company faces the daunting task of not only convincing consumers to buy its value propositions, but also to choose not to buy value propositions they already like and feel comfortable with.

• Are the value propositions in the industry you propose to enter highly branded?
• How strong is the brand loyalty in the industry you are proposing to enter?

Absolute Cost Advantages are when an established venture has an insurmountable cost advantage, meaning that new entrants cannot possibly hope to match the incumbent companies’ lower cost structure. Absolute cost advantages can arise from: 1) superior production operations and processes due to access to unique assets (i.e. patents, copyrights, or fertile farmland), 2) accumulated skill and expertise, 3) exclusive or relatively favorable control of their value propositions’ inputs (labor, materials, equipment, or management skill), and 4) access to cheaper capital due to their lower business risk when compared to a new market entrant. Also, access to superior distribution channels could be considered an absolute cost advantage. If established companies have absolute cost advantages, then the threat of entry as a competitive force will be weaker.

A new market entrant must be especially careful in attempting to directly compete with entrenched industry competitors that have absolute cost advantages. If a new entrant enters an industry where there are established competitors who have lower cost structures, the established firms can lower the price of their value propositions to eliminate the new entrant. This could erase any ability for the new market entrant to ever earn a profit. If this threat is credible, it can be a barrier of entry for new market entrants.

• Do the major competitors in the industry you are proposing to enter possess absolute cost advantages? If so, will you be able to acquire these absolute cost advantages before you begin directly competing with them?
• If the major competitors within the industry you are proposing to enter possess absolute cost advantages over your business idea, are there any steps or actions you can take to mitigate those absolute cost advantages?

Customer switching costs are the time, energy, and money necessary for them to switch from the value propositions offered by an established company to those of a new market entrant. If switching costs are high, customers will be unlikely to change even if the new product is superior to other market substitutes and alternatives. An example would be the switching costs associated with leaving the Microsoft Windows operating system or the QWERTY keyboard. Other value propositions in the market may be better/faster, but consumers often find themselves resistant to change because the time or hassle of switching to a better product or service proves prohibitive.

 K ey Questions:

• In the industry you are proposing to enter, do the value propositions the industry produces have high switching costs? If they do, can you think of a way your business idea can mitigate this obstacle?
• If the industry you are proposing to enter doesn’t typically have high switching costs, can you think of a way for your business to raise the switching costs for your proposed value propositions?

Government regulations create politically and legally defined barriers of entry for many industries. Government regulations can increase barriers of entry for market entrants and potentially reduce competition. An example would be food safety regulations or anti-pollution laws. Also, in industries where economies of scale are a powerful force, the absence of regulations can lead to an intense concentration of market share in the hands of a few firms. This can create barriers of entry that are extremely difficult for a new market entrant to overcome. To sum up, high regulation within an industry usually leads to higher barriers of entry, but not always.

• Does the industry you propose to enter require government licenses or strict adherence to statutory codes (construction, health care, lending money, real estate rental, restaurant & food preparation…)?
• To what degree are the industry’s regulations beneficial to the incumbent industry competitors?

Below is a chart that summarizes how the six types of barriers of entry affects industry attractiveness from both the perspective of a new market entrant and an industry incumbent.

Estimating Market Size

Estimating the size of the market you want to enter is the first critical step in testing the feasibility of your business idea. This is a lot like cliff diving. If you are going to jump off a cliff into a pool of water far below, it’s a really good idea to know beforehand just how deep the water is. If you jump without finding out (or at least making an educated guess based on objective facts), you run the very real risk of getting hurt. Bad.

The first order of business in determining the sizes of the various market types for your business idea’s value proposition(s) is to correctly define the parameters of the market types you are trying to measure.  This may sound rather simple, but it is honestly the hardest and most frustrating part of this process. Estimating a market size is the epitome of the phrase “garbage in – garbage out.” If you incorrectly define the boundaries of the type of market you are trying to size up, your entire estimate (and the basis for all of your future financial projections) won’t really be worth the paper it is printed on.

So, creating a quality market size estimate that’s based upon good, logical assumptions, is the first step in determining if your business idea can support a potentially successful business model. To make a quality market size estimate, you should roughly measure the size of each relevant market type for your business idea’s value propositions. By understanding the rough size of each of these market types, you can roughly gauge how much revenue (based upon your market share assumptions) your business idea could generate in the present and going forward into the future. Determining which market types to estimate the size of depends upon the type of market your business idea is attempting to serve. These general market types are Defined Exiting Markets, Cloned Markets, Re-segmented Markets, or a New Markets.

A market is a group of customers that have the willingness to buy a particular type of value proposition. When determining the size of the markets for your proposed business idea’s value proposition(s), you may use all or some combination of the following market type definitions.

• Examples: the car market (supplied by the car industry), the personal computer market (supplied by the personal computer industry), and the athletic shoe market (supplied by the athletic shoe industry).
• Examples: the total market for electric cars, the total market for tablet computers, the total market for running shoes.
• Examples: the market for electric cars in the United States sold through dealerships, the market for android compatible tablet computers sold through big box stores, the market for athletic shoes sold through e-commerce websites .
• The TM is comprised of one or more customer segments , each of which are offered a unique value proposition by your proposed business idea. For a comprehensive explanation of what comprises a customer segment, please refer to the following section.
• The TM is a measurement dependent upon the definition and size of the SAM (because it is a portion of the SAM), but independent of the SOM. Both the TM and the SOM are portions of the SAM that measure different things.
• Examples: Upper-middle class, educated, ecologically conscious automobile customers, early adopter electronics consumers who use their personal computers and laptops mostly for entertainment and not work, high school and college athletes who buy high performance running shoes to gain an edge on their competition.
• Like the TM, the SOM is dependent upon the definition and size of the SAM, but is independent of the TM. Both the TM and the SOM are portions of the SAM that measure different things.
• Examples: the portion of the market for electric cars sold in the United States through dealerships that your business idea can realistically capture, the portion of the android compatible tablet computer market in the United States sold though big box stores that your business idea can realistically capture, the portion of the market for high performance running shoes for athletes in the United States that are sold through ecommerce websites that your business idea can realistically capture.

For practical purposes, you can think of both the SOM and TM as a portions of the SAM, the SAM as a portion of the TAM, and the TAM as a portion of the TID. Both the SOM and TM are separate business concepts that measure different things. The SOM estimates your proposed value proposition’s penetration of the SAM. The TM estimates the size of the group of people for whom your proposed value proposition is specifically designed for.

I know, it’s a lot of acronyms to keep straight. But estimating the sizes of the TIM, TAM, SAM, TM and SOM are important for determining if the market size for your business idea’s value proposition(s) can support your entrepreneurial ambitions and business goals. The following are three generalizations – rule-of-thumb explanations – of what market sizes are necessary to support a particular business type, development path and outcome.

This type of company is usually entering a cloned, re-segmented, blue ocean or new market, or a defined existing market with a new product. They usually seek traditional angel investor and venture capital funding. Rapid scalability an achieving high market share is the key to this type of company. Often the founders of scalable, high growth companies have either an Initial Public Offering (IPO) or the sale of the company to a Fortune 500 corporation as their exit strategy .

These companies require a SAM large enough to support potential company EBITDA (after the company has successfully scaled its operations) of at least somewhere between $10 million to $20 million per year. Publically traded companies, on average, often trade for 10x their annual EBITDA or greater. This, depending upon the company’s industry and whether or not its founders and investors want it to have an IPO, would probably put the company’s valuation at greater than $100 million. A $100 million valuation is a safe rough estimate for whether a company will be able to both afford to go public and financially benefit from an IPO.

So, armed with these rough guidelines, to create a scalable, high growth company that proposes to enter an industry with a 10 percent average EBITDA and capture 10 percent of that industry’s market share, would need to at least generate $100 million per year in revenue ($10 million per year in EBITDA divided by the industry EBITDA average of 10 percent). To achieve this annual EBITDA target and a 10 percent SAM penetration, the overall SAM size would need to be $1 billion ($100 million per year in revenue divided by a 10 percent penetration of the market by the company).

This type of company can be entering a Defined Existing Market, Cloned Market, Re-segmented Market, or Blue Ocean Market. They do not enter New Markets with New Products due to the incredible amount of time, business risk and resources that would be required. These businesses usually seek capital from the founders, founders’ friends and family, non-bank lenders, bank and institutional lenders, and some angel investors. Rapid scalability is usually not a primary goal for these business ventures. They often prioritize strong, stable profits and cash flow for their owners above all else. Exit strategies for these companies’ founders include selling the company to a third party such as another privately held business or private equity group, passing on the business to heirs, or simply holding on to the business. These types of businesses often make excellent cash cows.

Successful, mid-sized privately held businesses are usually valued between $5 million and $50 million. These businesses, as a rough rule of thumb and depending upon the industry, are usually valued at 3x to 5x their average yearly EBITDA. So, a $30 million dollar privately held business would need an average yearly EBITDA of between $6 and $10 million per year ($6 million per year if the business valuation ratio would be 5x; $10 million if the business valuation ratio would be 3x).

Lifestyle businesses are undertaken by entrepreneurs who want to create their own jobs and/or to support the conscious lifestyle choices of the entrepreneur (hobbies, schedules, living location…). This type of company usually solely enters Defined Existing Markets. Many, if not most, of the entrepreneurs who start lifestyle businesses do not begin their business ventures with any particular exit strategy in mind. Instead, the primary financial goal of these entrepreneurs is usually to generate enough cash flow to support their lifestyle needs. These businesses usually seek capital from the founders, bootstrap financing, and the founders’ friends and family. Rapid scalability is usually not a primary goal for these business ventures.

The market size necessary to support a lifestyle business really depends upon the needs and wants of each individual entrepreneur. The variables used to determine a rough estimate of the minimum market size needed to support a lifestyle business are: 1) the entrepreneurs’ desired minimum yearly EBITDA (include the entrepreneurs’ salaries in with EBITDA), 2) the average EBITDA ratio for a firm competing within the industry you are proposing to enter, and 3) the entrepreneurs’ assumption of how much of their proposed business idea’s SAM they will be able to capture.

For example, if an entrepreneur’s goal is to earn at least $120,000 (in EBITDA and salary) from the lifestyle business per year, the average EBITDA ratio for the proposed business idea’s industry is 15 percent of annual revenue, and the entrepreneur assumes she can capture 10 percent of the SAM she proposes to enter, then the minimum necessary SAM size needed to support the business venture would be $8 million ($120,000 divided by a 15 percent EBITDA ratio divided by a 10 percent SAM penetration equals $8,000,000).

The following chart summarizes the rule-of-thumb market size needs of the business types analyzed above:

Targeting a specific audience is most effective strategy when creating a marketing campaign. The more specific of a customer base a campaign can reach, the more dollars per potential customer a campaign will make. This is why companies will allocate a large amount of resources in order to find the audience that they are looking for. By doing this, you can create a marketing budget as effectively as possible and maximize your results. Knowing or choosing exactly who you are getting your message to has proven to be the most effective method of forming a marketing campaign. Once you have identified your target audience, the hard part is figuring out how to reach it. Below, we will discuss ways to do so.

The goal of any marketing campaign is to give the most amount of information about a product or service to the prospective customer possible. The more the customer knows, the more likely they are to take action. The more that is known about that customer, the more likely it is that you can communicate that information effectively. Using information about your customer base will help you make connections that they can relate to and in turn, they will be more likely to respond to your campaigns call to action.

There are four main ways that are commonly used in identifying targeted markets.

Geographic:  This includes the location, the geographical size and makeup of the area and other environmental factors such as climate.

Demographics:  This includes age, gender, income, average family size, average education, and the types of jobs that are in the geographic area.

Psychographics:  This involves factors such as the personality that you area tends to take on, what and how people behave that live in that area and also factors that will affect the way your potential customers will use your product or service. Will they use it often not so often? Is it a necessity or luxury?

Behaviors:  This has more to do with how your potential customers will react to things such as price changes and price points, how they will react based on what information is given to them, and what types of marketing campaigns they are most likely to respond favorably to. All of these factors can be used to help determine how a population will respond to a specific marketing campaign. Likewise, you can a marketing campaign that will increase conversions based on the information gathered above.

One of the fundamentals of marketing focuses on the benefits to cost trade-off. Understanding how customers will weigh the potential benefits of a product or service versus the costs to obtain that product or service is critical when designing a marketing campaign. Ask yourself, how will your customer gain monetarily or in other ways from purchasing your product or service? Though it is not always achievable, satisfying this is the most effective ways to create sales.

To better understand how they will you this trade-off, ask yourself the following questions.

• How much will it save them? Is this a product that can potentially pay for itself?
• Are there any intangible benefits to this particular product or service that a customer may ignore or find appealing?
• Will this product or service save the customer money, time, effort, or resources?
• Will it increase the customer’s income, investments, future, or personal relationship will it reduce a customer’s expenses, taxes, liabilities, or work?
• Will it improve that customer’s abilities, productivity, appearance, confidence or peace of mind?

Understanding the effect that your product or service will have on the customer will serve as an invaluable tool when designing an effective marketing campaign.

As mentioned in the beginning, understanding, identifying and reaching a target audience is the most effective way creating a marketing campaign that will give you the best results possible relative to the budget and time you are allotted. Ignoring these factors can costs you money and can be the difference between a successful and unsuccessful marketing campaign.

It’s important to define the nature of your involvement, in both depth and scope, in the business you are founding.  An entrepreneur’s involvement in his own business can range from being a full-time manager/employee (active ownership) to that of a hands-off investor (passive ownership).

An active owner materially participates in the day-to-day activities of the business. Most business owners and entrepreneurs actively participate in their businesses in some way, shape or form. Many work full-time in their businesses as employee/managers, drawing both a paycheck and profits (if there are any).

The definition of a passive owner is a little trickier to nail down. A passive business owner does not participate in the day-to-day activities of the business he or she owns. The IRS states that passive income can only come from two possible sources: rental activities or “ trade or business activities in which you do not materially participate .” Within the context of entrepreneurial endeavors some examples of passive income are:

• Earnings from a business from which you, an owner, are not required to be directly involved with (neither labor nor day-to-day management)
• Rent from either tangible personal property or real estate
• Royalties from intellectual property (patent, copyright, trademark…)

Receiving passive income is delightful. The hard part is usually accumulating enough assets in the first place to begin receiving passive income from them (rents or passive business activities). Examples, where an entrepreneur can derive passive income from her investments, are:

• A landlord rents an apartment building to tenants and uses a real estate management company to collect rents and make repairs.
• A passive investor invests capital into a partnership where others manage the business, and in return for his contribution of capital, the passive investor receives a portion of the business’s profits.
• An entrepreneur builds a successful business from scratch. She then hires a manager to manage the day-to-day affairs of the business. She then receives the profits from her business even though she is no longer actively involved in it.

Most entrepreneurs who start businesses have one of two basic plans for their involvement in their enterprises.

1. The entrepreneur(s) plan to be heavily involved in the lean startup plan and operations over a period of a couple of years. Then, at some undetermined point in the future, they plan to hire a manager and then run the company as a passive investment.

2. The entrepreneur(s) are essentially creating a job for themselves. They plan on working in the enterprise as an open-ended, long-term committment.

Starting and/or running a business is a complex and daunting task. Identifying both potential roadblocks and opportunities well in advance is essential for businesses of any size to outmaneuver the competition and gain a foothold as a dominant market leader. But over one-half of all new businesses will fail within five years of their founding. The vast majority of all new businesses never achieve the financial success originally envisioned by the founders. These new businesses and start-ups begin with energetic enthusiasm, but unfortunately, many business plans fall short due to various reasons: lack of capital, a flawed business strategy, unrealistic expectations, or they lack the people with the required skills and expertise to succeed.

Business plans may be required for any number of reasons. Here are a few of the most common business plan needs.

• To Obtain Debt Financing . A company may be required by a bank or other financial institution to provide a detailed, professional business plan in order to secure debt financing. Examples would be bank business loans or a line of credit.
• To Obtain Equity Financing . Start-ups and other new businesses often must sell equity (stock or membership units) to investors to raise capital for new business ventures. Investors can range from friends and family to angel investors to venture capital firms.
• For Internal Company Planning . Companies often need business plans to compare the relative viability between competing potential business projects. This can give those companies a clearer perspective on where to invest limited resources within the organization.
• Joint Ventures and Partnerships . When entering a strategic JV or partnership with another firm, a business plan works to outline the objectives of the two firms working in tangent.
• Mergers, Acquisitions and Corporate Divestiture . Detailed plans are needed when businesses change hands in order to help new owners see details in the industry and the enterprise itself. An expert plan can also serve as part of the marketing material to get the business sold.

The reasons for creating a business plan can be as varied as the businesses themselves. Each plan requires a unique approach to the industry you are in, the market you intend to serve, and your financial needs. That’s where we come in.

Creating a professional business plan can help mitigate these risks, raise capital from potential investors and put the company on the path to success. A good business plan helps to focus an entrepreneur’s mind on accomplishing the tasks necessary to make his or her business succeed. A business plan is not a static document. It is a logical series of informed assumptions that are relevant at the time the plan is written. As soon as market and industry conditions begin to change (which usually happens about five minutes after the plan is written), the plan begins becoming obsolete. For the entrepreneur, the value in the business plan isn’t necessarily the plan itself. Instead, its real value lies in the process – the research, thought and inquiry – in creating it.

We will work with you from start to finish to create a professional business plan that will help you accomplish your objectives. We will ask the necessary questions, help you find the answers, and organize your ideas into a coherent plan. From researching your market and industry to producing realistic, justifiable pro forma financial statements (cash flow, income statements & balance sheet), we will craft a document that can help you accomplish your business objectives.

So your business needs a plan. The question is, what kind of plan does it need? Please check out our business plan menu options and pricing here.

Business Plan Review & Evaluation

If you already have a business plan and would like to have it reviewed by a professional business plan consultant, then this is the right service for you. We will review and critique your business plan with an investor’s eye, scrutinizing it for financial errors, grammatical errors, and weak or unrealistic assumptions. We will also point out what you did right. Our business plan review service is an efficient and affordable way to ensure that your business plan is as good as it can be. Our business plan review services are provided at a substantial discount to our normal hourly rates. Depending on your needs and budget, we offer three levels of business plan review services:

– We will spend 2 and 1/2 hours reviewing your materials. We will then provide a written evaluation and critique your plan and financial model.

– We will spend 30 minutes consulting with you on the telephone, answering any questions you may have and offering additional guidance.

– Optional: if you have made any changes to your business plan, based upon the evaluations and critiques we made in our first examination of your materials, we can offer subsequent reviews of the improvements you have made to your plan. In these subsequent reviews, we will spend up to 2 hours examining your materials again.

–  Flat Rate Price:  $297 for first review; $147 for subsequent reviews

• Once you place your order, we will provide instructions for sending us your business plan. Your plan must be sent to us in Microsoft Word format so we can use the Track Changes feature).
• Your review will generally take place within 3-5 business days of you sending us your business plan.
• When our review of your business plan is complete, we will send you the redlined/track changes version of your business plan with our critiques and suggestions.
• After you receive your reviewed/critiqued version of your business plan, we will work with you to schedule a mutually convenient time for the telephone portion of the review service.
• Optional Subsequent Reviews: After you make changes to the critiqued version of your business plan that we sent you, you may send us your new version for further critiques/comments. Please allow 3-5 business days to complete the evaluation.

– All information you provide will be treated confidentially.

– Fees are payable in advance and are non-refundable. If you decide you no longer want a business plan review after you have made payment, we will provide an equivalent amount of consulting firm services of your choosing (3 hours for the Standard Evaluation and Review).

– Once you submit your plan for review, please allow two business days to schedule an initial discussion so that we can understand your needs and tailor our review for your specific situation. This allows us to make sure you get the most out of this process.

– Depending on our existing workload, please allow up to 5 business days for us to complete the review following this initial discussion.

– All reviews are provided on a best efforts basis. You are ultimately responsible for the accuracy of the information in your business plan (and related materials).

– You agree to defend, indemnify, and hold us harmless from and against all third party claims, losses, or damage which we incur and which arise from or are attributable to our role in this business plan review.

We believe that we have the most transparent and customer friendly pricing strategy on the market.

For someone writing their first business plan, even for simple small businesses, the process can take upwards of 100 hours of time. Often, it takes more than 200 hours . For complex business plans (business plans for unproven business models and undefined markets), the process can often take more than 400 hours. Because we have considerable experience and skill at writing plans, we estimate that, on average, that we can complete an average business plan (depending upon its type, audience and complexity) in the range of 30 to 120 hours.

The range between 30 and 120 hours depends upon three general factors that contribute to a business plan’s complexity. The first factor is whether the plan is for a new business or a business already in existence, The second factor is whether the business’s industry and market are well defined (for example: dry cleaners, dollar stores, organic vegetable farms, family restaurants…) or if the market or industry is new and untested. The third factor is who is the audience for the business plan: equity investors, debt lenders or the internal management of an existing business.

Note:  unless your business idea is exploiting a new market or market niche, or offering customers a product or service that is radically different from what is currently offered to the market, then only on rare occasions will your business plan require longer than 70 hours to complete.

From three factors above, we can generally estimate the average number of hours the plan will take to complete, and therefore we can charge a base flat fee for the project. We Our base flat fee rates are the product of our estimated number of hours times our business plan writing hourly rate. For our business plan writing, we charge $75 per hour.

The business plans we produce fall into the following six general categories:

But often, due to unseen factors (a change in the business plan format scope and direction), a plan may take longer than the anticipated range. Often project extensions occur when it becomes necessary to modify or change the focus of the business plan due to unforeseeable factors (i.e. new market research, assumptions are proven wrong, the founders choose to shift or expand the scope of the business…). So, if your business plan takes longer than the anticipated number of hours to produce, we will charge you at only $20 per hour beyond the original estimated time frame.

This ensures the following:

– By using our pricing formula (flat fee plus $20 per hour beyond the estimated project timeframe) versus using only a fixed billable hour rate, we mitigate any incentive to “run the meter” and unnecessarily inflate the price of your solid business plan. Our goal is to maximize our income per hour for each plan that we produce. Therefore, if we end up going beyond the project’s estimated timeframe, this means we will be working at a significant discount ($20 per hour after the end of the project’s initial timeframe estimate).

– We use our pricing formula also gives us some measure of protection against unforeseen changes to the project’s scope or direction. Creating a lean business plan is a dynamic process. Information discovered or uncovered during the plan writing process can change the focus, scope and goals of the project. Also, by charging a modest hourly rate beyond a predetermined period, helps to focus and frame exactly what you want in your business plan.

– Ultimately, our system encourages both you and us to remain disciplined, efficient and to maximize the value of each other’s time.

For example:  You task us with writing a Type 1 business plan. The project takes 50 hours to complete because the scope changed in the middle of the project. Under these circumstances, the final price for the project would be the Type 1 business plan flat fee ($2,250) plus $20 per hour for every hour spent on the project over 30 hours (20 hours x $20/hour = $400). Therefore, the final complete price for the project would be $2,650 ($2,250 + $400 = $2,650).

• One half (50%) of the project’s flat fee price is required to be paid up front.
• 30% of the project flat fee is due upon completion of the business plan’s Executive Summary (the last plan component to be completed).
• Upon completion of the business plan’s final draft and its approval by the client, the remaining 20% of the project’s flat fee is due  plus  any extra hourly charges if the project goes beyond its initially estimated time.

Preparing an expert business plan can be extremely time-consuming. While the process of mastering and completing your plan may be helpful in understanding the business dynamics, corporate strategy and overall financial and marketing model, it can take you away from operational support that is vital for day-to-day operations. That is where our business planning services come into play. We help business owners in crafting expert MBA-level business plans for internal management buy-in as well as external business funding needs.

Companies often create business plans to obtain financing from venture capitalists, private equity groups and angel investors. Your particular plan will be dependent on the industry you play in, the financing you are seeking to obtain and your overall strategy for execution. Finding the key strengths, knowing potential flaws and being conversant with competitive forces in the industry are only a few of the necessary components of your completed plan. In other words, a full SWOT analysis may be necessary.

Regardless of whether you write a business plan yourself or outsource it to one of the expert members of our qualified MBA team, it is helpful to have a second pair of eyes to edit and provide constructive feedback. You plan and pitch will help to make or break your financing efforts. Don’t skimp on quality. You need to show off your financial health.

Being conversant in finance is certainly not a requirement to operate or be successful in business. Having great financials, including thoughtful projected and proforma financial statements is a must for any entrepreneur seeking to secure funding or internal management buy-in. We help to craft properly-structured financial plans for your business using historical data and realistic assumptions.

Obtain financing for your business with an professionally crafted financial plan as part of your overall strategy.

Business plans are great, but execution is the name of the game. Without a proper marketing plan coupled with flawless execution, your business may eventually disappear.

We work directly with the entrepreneurs themselves to craft detailed, specific and attainable goals and strategies to take your product or service to market. For the seasoned entrepreneur, this may be “old hat,” but having an expert business plan consultant in your corner is helpful to the proper execution of your overall strategy. While there are many business plan software providers on the market, you will still need the human-touch element to really make business plan sing.

If you are seeking funding from any number of sources or simply need help crafting a plan to help you take your business to the next level, we can help. Contact us today to find out more.

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

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Have you got a burning desire to start your own business? If so, you’re in good company.

Recent research says 28% of people worldwide have started a business at some point in their lives, while 30% have seriously considered it.

In other words, nearly a third of all people worldwide have considered going it alone.

If you’re serious about starting a business , you’ll need many things – but perhaps the first two you’ll need from day one are accounting software and a business plan .

The former lets you start on the very best footing without having to worry about an admin overload.

The latter is a way of transcribing your ideas and aspirations into cold, hard facts that investors can use.

For most people, creating a business plan is one of the hardest tasks they will undertake in the early days of their business.

But help is available.

Meet our business owner, Olivia

There are lots of business plan examples and templates, including here at Sage Advice . Using templates helps you answer questions that are typically asked if you hope to attract interest in your business – and therefore get investment.

Here, we look at creating a business plan via the hypothetical example of Olivia, who would like to create a plant-based chocolate retailer called Chocoholics Anonymous.

We’ll aim to create an ideal business plan by examining what she writes and how she approaches the task.

Olivia has already tested the water by running a part-time business from her kitchen for some months, with help from a few friends. Sales have boomed.

Now, she’d like to expand into a storefront and full online operation.

If she’s applying for a bank loan, she might be asking for most if not all of the funding. But if she’s hoping for angel investment, she may need to match the anticipated input with her own.

This might be her own cash, but it can also be her collateral in the business, and it’s for this reason that people often approach investors once their operation is an ongoing concern, rather than beforehand.

Your one stop shop for starting a business

Thinking about starting a business or already putting your ideas into action? We’ve got the resources, expertise and software to help you achieve your goals.

How to create a business plan

Olivia downloads our  business plan template and sets aside an afternoon to make a start, realising it could take several days or perhaps even weeks to complete and perfect.

She realises this is one of the most important things she will do – more important, even, than the secret recipe for her fudge brigadeiros!

When answering the questions, she tries to remember who the business plan is for: investors, such as banks that she might be approaching for loans, or entrepreneurs.

For this reason, her plan contains as many data points as possible because it has to make a genuine case for her company’s existence.

But it also has to be positive and inspiring, to show the promise her business offers.

Additionally, this is one situation where she knows not to stop herself from including personality in the application. She knows investors are putting their money into her, as much as they are in the potential of the business.

In her business plan, she includes diagrams, charts, visuals and anything else that helps her share her vision.

And that makes the plan easier to consume – after all, investors are busy people, so she’s wise to make the job as easy as possible for them.

Step 1: Description of the business and its objectives

Coyness isn’t required here, and Olivia doesn’t hold back:

“Chocoholics Anonymous will be the most profitable plant-based chocolatier in the country and within three years will become the dominant plant-based chocolate brand.”

She explains how her business will be different from the rest. It will target three price points: budget, medium and high end.

Highlight how you developed your business idea and what you want to achieve

Most chocolatiers, she explains with examples from actual businesses, target only the medium and high-end. She wants to create a low-price revolution.

Similarly, describing her objective is unrestrained in its ambition.

She writes that she wants virtually all vegan chocolate consumers in the country to have heard about her business, and to have a one in 10 conversion rate among this audience – which is to say, 10% will have actively placed an order with her in the space of any year.

She bases these figures on the reach of major plant-based food manufacturers, thanks to taking a look at their annual reports, and creates a graph showing the sales increases she anticipates over the first, second and third years.

Use your business plan to highlight your goals and objectives

She lets her imagination run wild, and talks about wanting to scale the business to multiple retail outlets, and using a dedicated manufacturing base.

Investors need to see ambition because they’re investing in that future as well as the here and now.

Step 2: Products and pricing

Olivia starts by breaking down her ingredient costs vs her profit margin, providing the figures in tables for ease of reading.

Then she explains her strategy for both creating and selling chocolate, and another unique selling point: she intends to offer discounts for bulk buying, so people will be encouraged to purchase more than one item each and every time.

She includes her product listing and provides examples of what she anticipates typical consumer purchases will look like, and how they will scale in this way.

Use this section of your business plan to go through what you’ll be selling

She also explains how she intends to operate both on and offline (or bricks and mortar, as it’s often called), and intends to run a loyalty-card scheme for her retail outlet.

Step 3: Customers

Olivia has done her research, which is the fundamentals upon which any business plan should be based.

People love statistics.

Olivia found statistics describing the growth in plant-based eating in the past decade, as well as the growth of flexitarian dietary choices.

Additionally, from those yearly reports from other plant-based food manufacturers and retailers, she’s able to take profiles of typical customers (personas), as well as discussions of their wants and needs.

And, of course, she finds their sales figures in their annual reports, so she can quote these as examples for her own potential reach, with a geographical breakdown for online sales.

Step 4: Competitors

Although her initial instinct was to pretend that she had no competitors, Olivia doesn’t flinch in examining the competitive landscape.

She realises her investors will not be stupid and, thanks to Google, can do their own research in seconds.

Before handing over cash, any investor will do their own due diligence in any event to confirm what Olivia claims.

So, she provides details of online retailers worldwide, as well as bricks-and-mortar retailers local to her.

She includes any business that might compete in future, such as non-vegan retailers, or even restaurants and cafes who might sniff her success and provide products (although she also mentions how she hopes to supply these retailers).

Use this section of your business plan to highlight your competitor research

She highlights her own unique selling points by expressing them as weaknesses in her competitors.

This level of insight Olivia provides is good for several reasons.

Gaps in the market

It genuinely shows where there might be gaps in the market. For example, Olivia realises during her research that nobody is making products for baby showers with vegan chocolate. She spots a gap in the market for diabetic-friendly plant-based confectionery.

Competitor analysis

Competitor analysis is also good practice when she begins to run her business, because this kind of research will need to be ongoing.

She’ll always need to spot gaps in the market and aim to keep a step ahead of competitors.

Some competitors may simply clone what she’s doing, but because she started her work before them, she can exploit this competitive edge to keep innovating and remain one step ahead.

Being realistic

But mostly, by being so pragmatic Olivia is showing by her competitor analysis that she’s realistic about her prospects. This is something investors will respect.

Step 5: Your people

Olivia starts by detailing her own qualifications and experience in retail, and her success up until that point operating the business from her kitchen.

She writes about her brother-in-law, who she intends to hire to man the store while she creates her masterpieces in the back. She details his qualifications and experience too.

Detail who will be working for you and the skills they’ll be developing

She highlights her expansion plans to take on new staff as the business goes on, and their roles – how she intends to use an online marketing manager when the business grows, for example, to expand her online reach.

Step 6: How to make the business a success

This is one question in the business plan where Olivia has a chance to be truly expansive while answering – although she knows to keep what she writes detailed and pragmatic.

She again discusses her plan to sell her products both online and offline.

Olivia mentions how she intends to exploit social networking to encourage online sales, and how she intends to run competitions with her products as prizes in order to build a mailing list.

She talks about her own experience of being vegan and how she’s firmly entrenched within the vegan community – both online and offline– and how she intends to use this to further the business aims, as well as how it gives her insight into sensitivities, and therefore marketing potential, among her community.

Olivia again does vital research and is able to show how her local area has a high proportion of people interested in plant-based eating, and who could become her bricks-and-mortar customers.

In short, anything and everything that could make her business a success is mentioned – and, in nearly every case, is backed up by data points.

Step 7: Profit and loss for the first three years

This is the toughest part of all.

Olivia has to work out all her costs moving forward – from day one of her business, all the way through to 36 months into the future when the business will hopefully look very different.

Having done her research, she knows her fixed costs – those that don’t change no matter how much she sells.

From speaking to estate agents, for example, she knows what a storefront rent is going to be.

From speaking to other business owners with stores via her local commerce association, she finds out what her bills are likely to be (water, electricity, internet etc).

She decides on salaries for herself and her brother-in-law.

Variable costs are harder for her to predict, because raw ingredient prices can be volatile. All she can do is list them at their current price, and adding a note about volatility.

Speaking to her potential suppliers, she asks the salesperson to give her a spread of recent prices so she can also show what the variation is likely to be. She factors in taking on casual staff as the business grows.

She projects how many units she will sell, and how this will grow.

Download our small business toolkit

One thing Olivia should do is download our small business survival toolkit. This includes an ebook, designed to help you achieve success by addressing typical challenges encountered by small businesses in the first few years.

It’s full of information, including potential funding sources that all businesses need to know about.

The business plan template we offer lets you update or complete your strategy for success, as outlined above. All you have to do is follow the instructions in each section, entering your own information.

Finally, our cash flow forecast template can be used to predict funds flowing in and out of your business over the next 12 months.

This is vital, and you can use it along with the advice in our ebook to address any cash shortfalls.

Small business toolkit

Get your free guide, business plan template and cash flow forecast template to help you manage your business and achieve your goals.

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• Creating a business plan
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How to Write a Business Plan For Investors (That They Will Love)

• August 22, 2022

If you’re an entrepreneur who likes to forge ahead without putting too much thought into the future, writing a business plan is crucial to starting your company.

After all, it’s hard to get funding without one, and if you fail to provide investors with all the information they need upfront, they might not want to invest in your company at all.

What is a Business Plan?

A business plan is a written document that lists business goals, stages of business development, and how you tend to achieve these goals and objectives. This document provides a snapshot of your business to potential investors. In modern terms, we can also call it a pitch deck.

Since a business plan is the foundation of your business, it will determine how investors perceive your business and provide you with the necessary funding to kickstart your idea.

If you want your business plan to be compelling that investors can’t say no , check out these seven steps to writing a business plan that investors will love.

Step 1: Research your industry

When it comes to writing a business plan, research is key. You need to have a clear understanding of your industry, your target market, and your competition.

Entrepreneurs tend to focus on the “right format” for writing a business plan. However, there is no such thing as a right or wrong business plan format. What matters is how you cover key aspects of your startup in the plan.

This will not only help you create a more comprehensive business plan but will also give you the opportunity to address any potential concerns that investors may have.

Step 2: Define your goals

When you’re thinking about your business goals, it’s important to be REALISTIC . Write down what you want to achieve in the short-term and long-term, and make sure that your goals are specific, measurable, achievable, relevant, and time-bound (SMART) .

Doing this will give you a clear idea of what success looks like for your business, and will make it easier to create actionable steps that will help you get there.

Step 3: List your risks

Every startup has to consider the risks, and it’s important to list these out in your business plan so that investors are aware of them.

By being upfront about the risks, you’ll show that you’re prepared and have thought through the potential challenges your business may face.

Step 4: Create a marketing plan

No matter how great your product or service is, you need to have a plan for getting it in front of your target market.

A good marketing plan will help you define your target market, set budget and marketing goals, and determine the best channels for reaching your customers.

Plus, a well-executed marketing plan can be a great way to get investors interested in your business.

Step 5: Include an operations manual

An operations manual is an important part of your business plan because it shows investors that you have a clear understanding of how your business will run on a day-to-day basis .

Plus, it will help keep your business organized once it’s up and running. Here are two things to include in your operations manual:

• A description of your company’s structure and hierarchy!
• A list of your company’s key personnel, their roles, and responsibilities!

Step 6: Include financial statements

Financial statements are important because they show potential investors whether or not your business is viable .

They also help you track your progress and identify any areas where you may need to make changes.

Step 7: Market your plan

Now that you have a killer business plan, it’s time to market it to potential investors. Here are a few tips for getting your plan in front of the right people :

1) If you’re going for a bank loan or venture capital funding, find out who is on their investment committee and address your proposal to them with the rest of the member’s CC’ed on the email.

2) Create an informative video about your company and post it to your company website and social media pages.

3) Reach out to the channels with huge followings in your area(they often post interviews with experts). By having an opportunity to appear on others’ pages, you will have a much bigger exposure than if you were to start out on yourself.

The Main Concerns of Investors

Cashing out.

Many startup owners show concerns about why investors have such a short attention span. Many people who consider their initiatives as a lifetime commitment assume that anyone else who joins them would feel the same way.

When evaluating a business strategy, investors assess whether or not to invest, but also how and when to exit. The exit plan is super critical as it paves a way for investors to come out of unfavorable circumstances in case the startup fails to make an impact in the market.

Sound Financial Projections

Profit estimates over the next 5 years might assist investors to negotiate the amount they will receive in exchange for their capital. Investors use financial forecasts as a measure for evaluating future performance.

Entrepreneurs go to extremes with their numbers. They don’t put enough effort into their finances in some situations, relying on figures that are so skewed or optimistic, anyone who has read more than a dozen business plans can see right through them. Some entrepreneurs feel that the financials are the company plan.

They may envelop the project in a mist of numbers. Many investors threw off by “spreadsheet merchants,” who have pages of computer printouts covering every possible company variation and analyzing product sensitivity.

Even when genuine marketing finds data financial projections, investors are apprehensive because emerging companies almost never realize their optimistic profit forecasts.

The Development Stage

Every investor wants to lower their risks. They analyze the status of the product and the management team while assessing the risk of a new and developing enterprise. The smaller the risk, the higher the chances of funding. 

A solitary entrepreneur with an unproven idea is at one extreme. Such a venture has a limited chance of acquiring investment capital unless the creator has a stellar track record.

At the more desirable extreme, is a venture with an approved product in an established market and a trained and staffed management team. 

If you’ve never launched a business before, you’ll need to show a lot of tangible progress in order to assuage investors’ concerns about your lack of expertise.

Do a Pilot Test

Unless you are wealthy enough to fund the company and test the pet product or service yourself, the only way to meet your wants is to satisfy those in the market.

Off course, you’ll have to overcome a number of obstacles before you can persuade investors that your company can thrive. What, for example, are the proprietary aspects of the product or service? How will you achieve consistency in quality? What would be the payback period? How long would it take before you become profitable?

Have you focused on a single market segment, or are you aiming to accomplish too much? The outcome will be more successful if you reply in terms of the market and investors rather than your personal preferences.

Numberly has Got Your Back!

Whether it’s your first startup, or you’ve raised funding in the past, writing a killer pitch deck or business plan is always a nerve-wracking experience. Blank pages will haunt you for days unless you have a concrete idea of where to take a head start.

Coming up with great business strategies is as much an art as it is a science, despite what we hope. The concept of a master document with blanks for executives to fill in, similar to how lawyers use example wills or real estate deals, is as fascinating as it is impossible.

Businesses have different marketing, manufacturing, and financial obstacles. Their strategies must account for these differences, stressing appropriate areas while downplaying minor problems. Keep in mind that investors view a business plan as a distillation of the company’s aims and personality.

Let Numberly be your guide here. Our careful and thought-out process ensures your business plan takes into account all stakeholders.

We will help you save time and energy while increasing your chances of attracting investors and clients.

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Writing a business plan that will attract potential investors

Crafting a compelling business plan is essential for attracting potential investors, as it serves as a detailed roadmap that outlines your vision and strategies for success. By highlighting key financial projections, market research, and effective marketing strategies, you can showcase your business's potential and capture the interest of investors eager to back promising ventures.

What is the purpose of a business plan in attracting investors?

Defines the business vision and goals.

A well-crafted business plan serves as a foundation for articulating your business vision and goals. It provides clarity on what your business seeks to achieve and how it plans to position itself in the market. By outlining these elements, you not only set the stage for operational success but also create a compelling narrative for potential investors. They want to see that you have a clear direction and a robust plan to reach your objectives.

Outlines the strategies for achieving objectives

Investors are keen on understanding the strategies that will drive your business forward. Your business plan should detail the tactical approaches you will employ to meet your outlined goals. This can include marketing strategies, sales processes, and operational efficiencies. Clearly defining these strategies helps instill confidence in investors that you have a roadmap for success.

• Be specific about your strategies; vague plans can raise doubts.
• Consider including timelines and milestones to demonstrate your commitment.

Serves as a roadmap for potential investors

A comprehensive business plan is much more than just a document; it acts as a roadmap for potential investors. It provides them with a guided tour of your business, showcasing critical components like market research, financial projections, and competitive analysis. This roadmap not only helps investors understand your business model but also highlights the investment opportunity in a structured manner. A clear business plan structure allows investors to easily navigate through the information and assess the viability of their potential investment.

When crafting your investor attraction business plan, remember to incorporate various aspects that will appeal to investors, such as:

• Detailed market research for business plans, demonstrating a solid understanding of your industry.
• Realistic financial projections that are backed by data and sound financial forecasting in business plans.
• Insights into your management team and their qualifications, showcasing the capability of your team to execute the business plan effectively.

The integration of these elements ensures that your business plan not only attracts potential investors but also keeps them engaged and informed about the opportunities your business presents.

How should the executive summary be structured?

Provide a concise overview of the business.

The executive summary is a crucial component of the business plan for investors . It serves as the first impression and sets the tone for the entire document. Begin with a brief description of your business, including its name, location, and the essence of what you do. Highlight your business vision and goals clearly and succinctly, ensuring that potential investors can quickly grasp your mission.

In this section, it’s essential to outline what differentiates your business in the marketplace. A well-crafted business plan overview should include:

• Your product or service offering
• The problem it solves or the need it fulfills
• Key milestones achieved so far

Highlight key financial information and projections

Investors are particularly interested in the financial aspect of your plan. In the executive summary, provide an overview of your business plan financial projections . Include key figures such as:

• Projected revenues for the next three to five years
• Estimated expenses
• Profit margins

Moreover, it is vital to justify these numbers with sound financial assumptions in business plans . Use concise bullet points to make the data easily digestible, reinforcing the potential return on investment that your business can offer.

Include a compelling value proposition

Your value proposition is the heart of your investor attraction business plan . It should succinctly convey why your business is poised for success and why it stands out among competitors. Make it compelling by addressing the following:

• What unique benefits do you offer to customers?
• Why is your product or service a must-have?
• How do you plan to maintain your competitive edge?

In addition, you may want to touch on your market research for business plans to support your claims. This information can reinforce the credibility of your value proposition and demonstrate a thorough understanding of your target market.

• Keep your executive summary to one or two pages to ensure it remains engaging and to the point.
• Use visuals or charts to illustrate financial projections, making them easier to understand at a glance.

By meticulously crafting the executive summary, you lay a solid foundation for your business plan, making it an indispensable tool in attracting potential investors. Ensure that every element is polished and communicates clarity, ambition, and feasibility.

What market research is necessary to include?

Analyze industry trends and growth potential.

Conducting thorough market research for business plans is crucial for attracting investors. Start by analyzing current industry trends to identify emerging opportunities and potential challenges. Understanding the market landscape will help you pinpoint areas of growth and innovation.

Consider the following factors when assessing industry trends:

• Market size and growth rate
• Technological advancements affecting the industry
• Regulatory changes that may impact operations
• Shifts in consumer behavior and preferences

By presenting a well-researched overview of the industry, you can demonstrate to potential investors that you have a clear understanding of the market dynamics that will influence your business plan for investors.

Identify target audience and customer demographics

Understanding your target audience is essential for developing effective marketing strategies in business plans. Clearly defining your customer demographics allows you to tailor your products and services to meet their needs, ultimately increasing your chances of success.

When identifying your target audience, consider the following:

• Age, gender, and income level
• Geographic location
• Interests and purchasing behaviors
• Challenges and pain points your product or service can address

By gathering and analyzing this data, you can create a compelling narrative around your business vision and goals , making it easier for investors to see the potential for growth and profitability.

Assess competition and market positioning

A comprehensive competition analysis in business plans is vital for understanding your market positioning. By evaluating your competitors, you can identify their strengths and weaknesses, which will allow you to refine your unique selling proposition (USP) and differentiate your business.

Key aspects to consider when assessing your competition include:

• Direct and indirect competitors in your market
• Their market share and customer base
• Pricing strategies and product offerings
• Marketing tactics and customer engagement methods

By articulating your competitive landscape, you can effectively demonstrate to investors how your business will carve out its niche and succeed in a crowded market.

• Utilize surveys and focus groups to gather insights on customer preferences.
• Regularly update your market research to stay relevant in a dynamic business environment.
• Incorporate quantitative data alongside qualitative insights for a comprehensive view.

How can the marketing and sales strategies be effectively presented?

Outline unique selling propositions (usps).

When crafting a business plan for investors , it is crucial to clearly define your unique selling propositions (USPs). These are the distinguishing features of your product or service that set you apart from the competition. A compelling USP not only captures the attention of potential investors but also serves as a cornerstone of your overall marketing strategy. Consider addressing the following points to effectively highlight your USPs:

• Identify what makes your product or service unique.
• Explain how your USPs solve specific problems for your target market.
• Illustrate the benefits of your USPs compared to competitors.

Detail marketing channels and tactics to be used

Investors want to see that you have a well-thought-out plan for reaching your target audience. In your investor attraction business plan , you should detail the specific marketing channels and tactics you intend to use. This could include:

• Digital marketing strategies, such as social media, email campaigns, and SEO.
• Traditional marketing methods, including print, radio, and television advertising.
• Partnerships and collaborations with other brands or influencers.

Make sure to justify your choices with relevant data from your market research for business plans . Highlighting metrics like projected reach and engagement rates will strengthen your case.

Describe sales processes and customer engagement strategies

Investors are keen to understand how you plan to convert leads into customers. A well-defined sales process is a critical component of your business plan structure . Outline the stages of your sales funnel, from lead generation to closing sales, and include:

• Methods for identifying and qualifying leads.
• Sales tactics that will be employed at each stage of the process.
• Customer engagement strategies to build relationships and encourage repeat business.

Consider employing customer relationship management (CRM) tools to enhance your sales processes and improve customer engagement. Showcasing these systems can also impress potential investors, as it demonstrates a commitment to leveraging technology for efficiency.

• Ensure that your marketing strategies are aligned with your overall business vision and goals.
• Use data-driven insights to support your marketing and sales claims.
• Regularly revisit and refine your marketing strategies based on performance metrics.

What financial projections should be included?

Present detailed income statements and cash flow forecasts.

One of the essential elements of a business plan for investors is the inclusion of detailed income statements and cash flow forecasts. These documents provide a clear picture of the expected financial performance of the business over time. Investors need to see not only how much revenue you anticipate generating but also how that revenue translates into profit.

Income statements should cover at least three to five years and include:

• Revenue projections based on your market research for business plans.
• Cost of goods sold (COGS) to determine gross profit.
• Operating expenses, including marketing strategies in business plans.
• Net income after taxes.

Cash flow forecasts are equally vital, as they show how cash will flow in and out of the business. This helps potential investors understand your liquidity position, which is critical for day-to-day operations.

Include break-even analysis and funding requirements

A break-even analysis is crucial for illustrating the point at which your business will become profitable. This analysis should detail fixed and variable costs and how many units need to be sold to cover these costs. For investors, understanding your break-even point provides insight into the risks associated with your business.

Additionally, it's important to clearly outline your funding requirements. Specify how much capital you are seeking, how these funds will be used, and what milestones you expect to achieve with the investment. This section should include:

• Specific allocation of funds (e.g., operational costs, marketing efforts, product development).
• Projected return on investment (ROI) for potential investors.

Justify assumptions with market data and trends

To be convincing, your financial forecasting in business plans must be backed by solid data. This includes market research that demonstrates your understanding of industry analysis for business plans. Investors are particularly attuned to unrealistic projections; thus, your financial assumptions should be based on credible sources and realistic trends.

When making financial projections, consider including:

• Historical data from similar businesses or industry standards.
• Market trends that support your growth projections.
• Competitive analysis that shows how your business will fare against others in the industry.

By providing a robust financial section in your investor attraction business plan , you not only enhance your credibility but also demonstrate a thorough understanding of your business's potential, which is vital for attracting investors.

• Always use conservative estimates to avoid overly optimistic projections that can deter investors.
• Regularly update your financial projections as your business model evolves or as market conditions change.

How important is the management team section?

Highlight the experience and qualifications of key team members.

When creating a business plan for investors, the management team section is crucial. Investors want to see that the individuals leading the business possess the necessary experience and qualifications to steer the company toward success. Highlighting the backgrounds of key team members can instill confidence in potential investors. It is essential to detail:

• The relevant industry experience of each member
• Specific skills that contribute to the business's success
• Past accomplishments that demonstrate their ability to execute plans effectively

By showcasing a strong management team, you reinforce your business vision and goals , indicating that your company is in capable hands.

Demonstrate the team's ability to execute the business plan

Investors are not only interested in the qualifications of your team members but also in their proven ability to execute the business plan. In this section, consider including:

• Case studies or examples of past projects successfully led by team members
• Metrics that reflect the team's track record of achieving business objectives
• Details of any operational roles that demonstrate leadership and decision-making skills

Effectively presenting this information can significantly enhance your investor attraction business plan , making it more compelling and trustworthy.

Include any advisory board or mentorship that adds credibility

In addition to your core management team, including an advisory board or mentors can further bolster the credibility of your business plan. These individuals often bring invaluable industry insights and connections that can be pivotal for startup success. Make sure to cover:

• The names and backgrounds of advisory board members
• The specific contributions they make to the business
• Any notable achievements or networks that enhance the company's strategic position

Incorporating this information demonstrates to potential investors that your business has access to a wealth of knowledge and guidance, reinforcing the overall strength of your management team.

• Consider showcasing a diverse management team with complementary skills to appeal to a broader range of investors.
• Use visuals, such as organizational charts, to clearly illustrate the structure and roles within your team.
• Keep the focus on results—emphasize how the team's experience translates into tangible outcomes for the business.

What are the common pitfalls to avoid when writing a business plan?

Overly optimistic projections without backing data.

One of the most significant pitfalls in creating a business plan for investors is presenting overly optimistic projections without sufficient data to back them up. Investors are keen on understanding the realism of your financial forecasts, so it's crucial to ground your business plan financial projections in well-researched data.

When setting financial goals, ensure that they are:

• Based on realistic market conditions
• Supported by historical data or industry benchmarks
• Transparent about assumptions made during forecasting

By providing a clear rationale for your projections, you increase the credibility of your investor attraction business plan.

Lack of clear structure and organization

A common mistake in business plans is a lack of clear structure and organization. A well-structured business plan overview helps potential investors easily navigate through your ideas and understand your vision. Each section should flow logically and build upon the previous one.

To enhance the structure of your business plan, consider the following tips:

• Use headings and subheadings to break down sections
• Incorporate bullet points for clarity
• Ensure each section has a clear purpose and ties back to your overall goals

A coherent business plan structure not only captures attention but also facilitates better comprehension of your business model.

Ignoring potential risks and contingency planning

Another vital aspect that is often overlooked is the need for a thorough risk assessment and contingency planning. Investors seek to understand not only the potential rewards but also the risks associated with your business. Ignoring these factors can lead to skepticism and diminish confidence in your plan.

To effectively address this, your business plan should include:

• An analysis of potential risks, including market, financial, and operational risks
• Strategies for mitigating these risks
• A contingency plan outlining steps to take if things do not go as planned

Incorporating these elements demonstrates that you have a realistic understanding of your business environment and are prepared to navigate challenges, making your plan more attractive to investors.

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7 Things Investors Are Looking for in a Business Plan

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A business plan is a comprehensive document that outlines a company’s mission, goals, finances, revenue, and market data.

The primary purpose of a business plan is to convince banks and/or investors to loan you money, but there are several other benefits.

Business plans help create accountability within an organization, offer a holistic view of the company, and can repeatedly be used as a frame of reference.

Ultimately, a business plan mitigates risk. It summarizes all business areas and details how those areas ( marketing , operations) impact growth.

And there’s no way around it; if you want to fund from an investor, especially if you’re just starting your business , you need a business plan.

Any entrepreneur would be lucky to meet with an angel investor or venture capitalist. But the initial pitch, meeting, and presentation are all the tip of the iceberg.

What comes next is most important.

The potential investor will want a detailed business plan and will conduct due diligence to ensure you’re a worthy investment. With that in mind, here’s what investors are looking for in a business plan:

Strong Executive Summary

The executive summary is the first portion of your business plan and should be captivating enough to give a solid first impression.

Think of your executive summary as your website landing page. If visitors come to your website and can’t find what they’re looking for, they’ll move on to the next best thing.

Your executive summary should introduce the company and explain what you do and what makes you unique. It gives investors a complete overview of your business and should summarize key details in other business plan sections. This section is typically one page long and should be written last.

Start your executive summary by introducing yourself; follow up with an explanation of why your business matters and how it fills a gap in the market or solves a particular problem. Take a business plan example for inspiration for writing a practical executive summary.

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Complete Financial Forecast

Whether you have no sales or are generating revenue in the hundreds of thousands, every investor will scrutinize your financial plan to determine financial feasibility accurately. This section of your plan needs to be fully fleshed out and leave no grey area or room for further questions.

It’s essential to put yourself in the shoes of an investor. Based on your financial outlook, do you see yourself as a risky or promising investment? Your financial forecast should include the following:

Projected profit and loss statement Projects how much revenue you’ll generate and the profit you’ll make on those sales

Break-even analysis A detailed look at how many products you need to sell to cover fixed and variable production costs

Projected balance sheet Estimate of total assets and liabilities

Cash flow statement Details all cash inflows and outflows

Business ratios Calculations that illustrate the relationship between items (i.e., total sales and the number of employees).

To accurately build out your financial forecast, you must assess your market share (your market research section is also crucial to investors). Start from the bottom by highlighting your total addressable market and the percentage you’ll be targeting. Then you can dive a little deeper by outlining your segmented addressable market and share of the market. Investing sites can also help you better perceive the state of the market and other data for a more accurate forecast.

Want free financial templates for your business plan?

You will find a terrific collection of important templates, including a SWOT analysis, sales forecast template, profit and loss template, cash flow template, and balance sheet template, in this comprehensive guide on how to write a business plan.

Customer Acquisition Costs

Investors want to know how much it will cost to acquire new customers.

Understanding your customer acquisition costs (CAC) helps you grow healthy and scalable and shows investors that you know exactly what it takes to get a customer on board.

Knowing your CAC is more important than ever; the cost of acquiring new customers has increased by 60% over the past five years .

Customer acquisition costs are determined by examining the total cost of sales and marketing necessary to acquire new customers. You can calculate your CAC by dividing the total cost of marketing and sales by the number of customers acquired.

Your CAC can also help simplify your decision-making process, optimize your marketing strategies to focus on customer lifetime value, and paint a complete picture of your payback period (the amount of time it takes to recover the cost of an investment).

Strong Execution

A business plan is like an image. And as the age-old saying goes, “An image is worth a thousand words.”

Similarly, your business plan reveals much about who you are as a business owner. Let’s say that you have strong sales and an optimistic financial forecast. Is your business plan missing the necessary documentation and data points that support this? Is it rife with grammatical errors and improper formatting?

Execution is telling. How you communicate your business and your mission is just as important as the details within the plan. A hastily written or ambiguous business plan will result in more questions and hesitance.

If you can’t take the time to write a solid business plan, what else will you take shortcuts on?

The Financial Ask & Answer

The financial ask and answer addresses two crucial questions: How much money are you asking for, and what will you do with it?

The investment you’re seeking should be clear in your business plan (typically mentioned in the executive summary and expounded upon in the financial plan). How you intend to use the money should also be clear and logical.

Investors need to know that you’ll spend their money responsibly and that there’s proof that how you spend the money will result in revenue growth. Every dollar should be allocated to a specific destination for a good reason.

For instance, you cannot ask for a $500,000 investment without explaining how and why you arrived at this number. The business plan in the below example of a functional company called Culina states how much they’re asking for and why. In this case, Culina is raising $15 million to ramp up hardware manufacturing, improve UX and UI, expand marketing efforts, and fulfill pre-orders before the holiday season.

Strong Management

Your business plan should prove that you have a strong management team.

Many investors run their portfolios with a people-first mentality. This means that who you are is just as important as what you offer. Your business plan’s “Management” or “Team” section is great for humanizing your company and highlighting your strengths.

What makes your team especially capable of running and guiding this business toward profitability? What’s your background? Have you won any awards or participated in any incubator programs? Do you have relevant experience (either in running a business or working in the industry)?

Answer these questions to show investors that you’re uniquely qualified to lead.

Thorough Understanding of Your Market

Is there a market for your product or service, how can you reach your market, and what share of the market do you have a stronghold on?

Demonstrating a thorough understanding of your market and target demographic is crucial. Many businesses have failed because they didn’t conduct market research or speak to their customers and clients. Product validation should precede fundraising efforts.

“Market size” is a basic number that every investor looks for. Your competitive analysis , market research, metrics, and customer surveys should all be factored into the equation.

If you’re struggling to understand your market and position, you can start by gathering primary data from the Census and Labor Bureau. Many industries also have formal associations and publish their research online. You can purchase these studies or commission a market research firm to spearhead your research.

An interested investor can make or break your business and should be taken seriously. You wouldn’t rush through an Ivy League college application and shouldn’t submit a hastily written business plan.

Take the time to detail every aspect of your business and consider working with a business plan writer to ensure you communicate your message effectively. If an investor is impressed with your business plan, chances are you’ll score pivotal funding.

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14 Professional Business Plan Samples [Downloadable pdf]

Looking for business plan examples for inspiration? Download or view 14 business plans examples/samples, vetted by our MBA business plan writers. Download in PDF format or read like a book. These real business plan samples would help in writing your own business plan.

View Real Business Plan Examples/Samples

As an entrepreneur, effectively pitching your idea to attract investors and secure funding can be a challenge. Moreover, when launching a business, creating a comprehensive business plan is paramount.

To aid you in these crucial tasks, we offer a collection of real-world and sample business plan examples across diverse industries. A well-structured business plan is indispensable in the fast-paced entrepreneurial landscape, as it delineates your goals, strategies, and financial projections, providing a clear roadmap for your venture.

Our aim is to facilitate the creation of an effective business plan by integrating real-life examples to elucidate the key elements involved. Below, you’ll find a range of 14 detailed business plan examples available for download and use.

Important Sections to Include in Business Plan

To create a robust business plan, ensure inclusion of the following key sections:

• Executive Summary: A brief snapshot of your business and the key highlights of your business plan. Read more
• Product and Services: An elaborate description of the offerings you will provide to your customers. Read more
• Marketing and Sales Plan: A strategic roadmap outlining how you intend to promote and market your business before, during, and after its launch. Read more
• Operating Planning: An explanation of the systems, processes, and tools necessary to efficiently run your business behind the scenes. Read more
• Organization and Management: Organization and management in a business plan outline the structure and leadership of the company. Read more
• Financial Plan: A comprehensive plan mapping out your short-term and long-term financial goals and the associated costs of running your business. If you require funding, this section is where you can outline your request and financial needs. Read more
• Key External Drivers: External drivers encompass factors like outsourcing, economic changes, industry competition, and business legislation complexity. Read more
• Startup Summary: The startup summary offers a comprehensive financial overview of , detailing expenses, asset value, and total requirements, crucial for transparency with entrepreneurs and investors. Read more
• Projected Industry Growth : Projected industry growth forecasts the sector’s expansion, offering a 10-year perspective and average annual growth rate, providing clarity to investors. Read more
• Break-even analysis: The break-even analysis visually presents key metrics and a 12-month revenue forecast to help stakeholders grasp the point where the business covers costs and starts generating profit . Read more
• Management Summary: The management summary provides a concise overview of organizational structure, key personnel, their roles, and financial commitments, ensuring stakeholders understand the business’s operational strength and leadership capability. Read more
• Financial Indicators: The financial indicators section evaluates organizational fiscal health, focusing on year-over-year profitability metrics, leverage ratios, liquidity ratios, and additional metrics, providing a comprehensive understanding of the business’s financial performance and efficiency in revenue generation from equity investments. Read more

Practical Business Plan Examples Illustrating Strategies for Startup Success

1. E-commerce Plan Sample or Example

Something Borrowed Something New is a burgeoning e-commerce enterprise specializing in wedding accessories and personalized gifts. Operating on a drop-shipping model, this business has the capability to make a significant impact in the market.

Moreover, leveraging social networking and blogging can be instrumental in generating awareness and capturing interest, thereby creating a robust online marketing strategy for Something Old and Something New.

To enhance their business operations, they are contemplating the integration of a WhatsApp CRM system. This initiative aims to optimize communication with potential customers, ensuring prompt responses to inquiries and fostering a seamless interaction process.

2. Online Marketplace Business Plan Example or Sample

EPlace Solutions will be an innovative online marketplace business portal offering a variety of products to consumers throughout the globe. Founded by Mr. John Jones, a seasoned business visionary with an eye toward profit and achievement, the organization is set to enter the market in 2023.

Online shopping is at an all-time high with new consumer mindsets calling for them to shop for the types of deals and bargains that will be so much a part of the online marketplace business model.

3. Snack Bar Business Plan Sample / Business Plan Example

There is an increasing demand for snack-type fast food to be consumed while window shopping and walking around inside a shopping mall.

Do you plan to start a snack bar business? Then here’s a complete snack bar startup business plan template and feasibility report you can use FREE of charge. It sounds easy to open a snack bar, but in reality, you need well-planned strategies to ensure that your business stands the test of time. 

Our snack bar business plan sample includes a detailed description of the products and services offered, as well as a market a nalysis  and competitive analysis.

It also includes a financial plan that outlines the startup costs, revenue projections, and break-even analysis. We like this sample plan because it demonstrates how to build a profitable snack bar business by creating a unique menu and offering healthy, high-quality snac ks that meet custome r demand.

Your snack shop business plan can look as polished and professional as the sample plan. It’s fun and easy, with Wise Business Plan. Let’s review the  snack shop business plan sample  and adjust them according to your audience for the best results.

4. Coffee Shop Business Plan Sample/Business Plan Example PDF

A coffee shop business plan is a document that outlines what your business idea is and how it will be implemented. Its purpose is to answer questions such as what it costs to start a coffee shop, how these costs will be financed, and how much money you can expect to earn from your cafe.

Are you looking for the right business plan for your cafe? Let’s review the  Coffee shop business plan sample  to find out how cloud-based software can make your day-to-day work more efficient.

Our coffee shop business plan sample includes a detailed description of the products and services offered, as well as a market analysis and competitive analysis.

It also includes a financial plan that outlines the startup costs, revenue projections, and break-even analysis. We like this sample plan because it demonstrates how to build a profitable coffee shop business by creating a unique brand and offering high-quality products a nd customer service.

5. Food Hall Business Plan Sample/Business Plan Example PDF

In the food industry, there is fierce competition. To ensure success, you need to hit the ground running with the right pitch. Our food house business plan is the ideal solution with an attractive design highlighting key information and conveying the right message.

This food business plan example features food images intended to tantalize the taste buds. It captures the theme perfectly and will convey the ultimate message to investors, clients and customers.

It is important to remember that the business plan template can be customized to meet your company’s specific needs and requirements. It will help showcase your business as a leader in the modern industry.

This food business plan template provides key slides to showcase everything from finances to marketing and key competitors. If you prefer, you can alter the content displayed to meet your specific needs, but this is a good starting point.

Ultimately, this  food house business plan  will be suitable for any business operating in the food industry and keen to get interested from key individuals. It will ensure that you can build up the rep of your company.

We provide a one-of-a-kind sales pitch deck designed to appeal to your prospective audience, as well as a custom presentation tailored to their information requirements.

6. Printing Shop Business Plan Sample/Business Plan Example Plan

When establishing a think tank, you will need to develop a business plan and document it properly. As a mass think tank, you need a special strategy to legalize the think tank as a non-profit organization and to raise funds for your project successfully.

Copy and print businesses offer a variety of services to both businesses and consumers. A copy and print shop can handle everything from single-page printing to large-volume jobs using several types of media.

Our printing shop business plan sample includes a detailed description of the products and services offered, as well as a market analysis and competitive analysis. It also includes a financial plan that outlines the startup costs, revenue projections, and break-even analysis. We like this sample plan because it demonstrates how to build a profitable printing shop business by offering high-quality, customized printing services with a focus on customer s ervice and efficient operations.

Let’s take a look at Printing and Photocopy Business Plan Sample that you can use to inspire your own and easily create one.

7. Acquisition Business Plan Sample/ Example PDF

The acquisition business plan sample is intended for businesses seeking to acquire another company or merge with a competitor. This plan includes an analysis of the target company, a valuation, and a strategy for integrating the acquired business into the existing operations. We like this sample plan because it provides a clear roadmap for the acquisition process and demonstrates the potential benefits of the deal.

8. L-1 Visa Business Plan Example with Sample PDF

At Wisebusinessplans, we understand that obtaining an L1 visa for an executive or manager requires a thorough and compelling business plan.

Our L1 business plan sample includes all the necessary components to satisfy USCIS requirements and demonstrate your qualifications and your company’s viability in the US market.

The L1 business plan sample is a comprehensive plan for a new business seeking L1 visa approval for an executive or manager. This plan focuses on demonstrating the applicant’s qualifications and the company’s viability in the US market.

We like this sample plan because it is specific to the L1 visa process and includes all the necessary components to satisfy USCIS requirements.

9. E-2 Visa Business Plan Sample/ Example PDF

If you’re an entrepreneur seeking E-2 visa approval, Wise Business Plans can help you create a persuasive business plan.

Our E-2 business plan sample outlines your investment, business operations, and financial projections, providing a clear and compelling case for your ability to successfully run a business and make a significant economic impact.

The E-2 business plan sample is designed for entrepreneurs seeking E-2 visa approval, which allows individuals to invest in and manage a business in the United States. This plan outlines the applicant’s investment, business operations, and financial projections. We like this sample plan because it provides a clear and compelling case for the applicant’s ability to successfully run a business and make a significant economic impact.

10. EB-5 Business Plan Sample/ Example PDF

If you’re looking to obtain an EB-5 visa by investing in a new commercial enterprise in the United States, Wise Business Plans can help you create a compelling business plan.

Our EB-5 business plan sample includes a description of your business, a market analysis, and financial projections, providing a detailed and persuasive case for the potential success of your venture.

The EB-5 business plan sample is designed for individuals seeking to obtain an EB-5 visa by investing in a new commercial enterprise in the United States. This plan includes a description of the business, a market analysis, and financial projections. We like this sample plan because it provides a detailed and persuasive case for the potential success of the business, which is crucial for obtaining EB-5 visa approval.

11. Investor Business Plan Sample/ Example PDF

If you’re seeking investment from angel investors, venture capitalists, or other private equity firms, Wise Business Plans can help you create a compelling pitch.

Our investor business plan sample includes a pitch deck, financial projections, and a detailed analysis of the market the potential return on investment and the scalability of your business.

The investor business plan sample is intended for businesses seeking to attract investment from angel investors, venture capitalists, or other private equity firms. This plan includes a pitch deck, financial projections, and a detailed analysis of the market opportunity. We like this sample plan because it emphasizes the potential return on investment and the scalability of the business.

12. Nonprofit Business Plan Sample/ Example PDF

At Wisebusinessplans, we’re committed to helping non-profit organizations achieve their social impact goals.

Our non-profit business plan sample includes a mission statement, programs and services, marketing and outreach strategies, and a financial analysis, providing a clear roadmap for establishing or expanding your organization.

The non-profit business plan sample is designed for organizations seeking to establish or expand a non-profit entity. This plan includes a mission statement, programs and services, marketing and outreach strategies, and a financial analysis. We like this sample plan because it demonstrates a strong commitment to social impact and outlines a clear strategy for achieving the organization’s goals.

13. Bank Business Plan Sample/ Example PDF

Whether you’re seeking financing from a bank or other financial institution, Wise Business Plans can help you create a detailed and persuasive business plan.

Our bank business plan sample includes a thorough financial analysis, market research, and a strategy for achieving profitability, highlighting the key factors that banks consider when evaluating loan applications.

The bank business plan sample is tailored for businesses seeking financing from a bank or other financial institution. This plan includes a detailed financial analysis, market research, and a strategy for achieving profitability. We like this sample plan because it highlights the key factors that banks consider when evaluating loan applications, and provides a strong case for the borrower’s ability to repay the loan.

14. Cannabis Business Plan Sample/ Example PDF

The cannabis industry is rapidly growing, and Wise Business Plans can help you enter it with confidence.

Our cannabis business plan sample includes a market analysis, operational strategy, and regulatory compliance a comprehensive overview of the unique challenges and opportunities in the industry and offering a clear roadmap for success.

The cannabis business plan sample is tailored for entrepreneurs seeking to enter the rapidly growing cannabis industry. This plan includes a market analysis, operational strategy, and regulatory compliance plan. We like this sample plan because it provides a comprehensive overview of the unique challenges and opportunities in the cannabis industry, and offers a clear roadmap for success.

Detailed Overview of Key Components of a Business Plan

1. executive summary.

The executive summary is a concise overview of your business plan, highlighting the key points of each section. It should capture the essence of your business, its mission, and the purpose of the business plan. This section should be written last, but it’s placed at the beginning of the business plan. Here is an example executive summary from our professional business plan written for Eplace Solution , an innovative e-commerce portal.

Tips for Writing Executive Summary

• Keep it brief and focused on key points.
• Clearly define the problem and your solution.
• Highlight market opportunities and growth potential.
• Showcase your team’s qualifications.
• Include financial projections.
• End with a clear call to action.
• Tailor it to your audience.
• Review and update regularly.

2. Company Overview or Description

In this section, provide a detailed description of your company, including its history, legal structure, location, and vision. Explain your mission statement and core values that guide your business decisions. Use real-life examples of successful companies and how their strong company descriptions have contributed to their growth. In addition, you can reuse your company description on your About page, Instagram page, or other properties that ask for a boilerplate description of your business.

This section also allows you to describe how you register your business . Here you must choose whether your business is a corporation, sole proprietorship, LLC , or another type of business .

Tips for Writing Company Description

• Describe your company’s mission and vision.
• Explain what your business does and the problems it solves.
• Mention your target market and customer base.
• Highlight your unique selling points.
• Provide a brief history and background.

3. Market Analysis

A market analysis analyzes how you are positioned in the market, who your target customers are, what your product or service will offer them, and industry trends. It might be useful to do a SWOT analysis to discover your strengths and weaknesses to identify market gaps that you may be able to exploit to build your business.

As part of your market research, you’ll also need to perform a competitive analysis. It will give you an idea of who your competition is and how to differentiate your brand. Here’s an example of a competitive analysis we did for a food business.

Tips for Writing Market Analysis

• Research and understand your industry thoroughly.
• Identify market trends and growth opportunities.
• Analyze your competitors and their strengths and weaknesses.
• Define your target audience and their needs.
• Include data and statistics to support your analysis.

4. Product and Services

Adding products and services to a business plan involves more than listing your company’s offerings. If you intend to gain funding or partner with another business, your products, and services section needs to demonstrate your company’s quality, value, and benefits.

Here’s an example of a product and service section in the business plan we wrote for an e-commerce business that offers wedding accessories.

Tips for Writing Product and Services

• Clearly describe your offerings and their features.
• Explain how your products/services address customer needs.
• Highlight any unique qualities or advantages.
• Discuss your pricing strategy.
• Mention any future product/service development plans.

Here is example of services section of a bank.

5. Marketing and Sales Plan

It is always a good idea to have a marketing plan before launching your business. A potential investor will want to know how you will advertise your business. Therefore, you should create a marketing plan that explains your planned promotion and customer acquisition strategies.

Discuss how you will make a sale. How will you attract customers and maximize their lifetime value? Ensure your marketing and sales forecasts align with your financial forecasts Marketing plans are usually based on the four Ps : product, price, place, and promotion. Breaking it down by marketing channels makes it easier. Discuss how you intend to market your business via blogs, email, social media, and word-of-mouth. Here is an example of marketing strategies we develop for a restaurant business.

Tips for Writing Marketing and Sales Plan

• Define your marketing goals and objectives.
• Outline your marketing strategies, including channels and tactics.
• Explain your sales strategy and target sales goals.
• Include a budget for marketing and sales activities.
• Discuss your sales team and their roles.
• Detail your customer acquisition and retention strategies.
• Mention any partnerships or collaborations for marketing and sales.

Example of marketing and sales plan section of a bank

6. Operation Planning

The operation plan should include all the steps needed to run the business in the long run. The plan should include details about logistics, duties for each department of the company, and responsibilities for the team.

The main aspect of running a business is its costs. Whether it’s machinery or services, each requires capital.

how to write an operation plan in a business plan

Tips for Writing Operational Planning

• Describe your day-to-day business operations.
• Explain your supply chain and production processes.
• Outline your facility and equipment requirements.
• Discuss your quality control and efficiency measures.
• Mention any legal and regulatory compliance considerations.
• Detail your staffing and management structure.
• Include contingency plans for potential disruptions.

7. Organization and Management

In this section, you can describe your current team and the people you need to hire. You will need to highlight your team’s relevant experience if you intend to seek funding. Basically, this is where you demonstrate that this team can be successful in starting and growing the business.

Tips for Writing Organization and Management Summary

• Introduce your leadership team and their roles.
• Highlight their relevant experience and qualifications.
• Explain your organizational structure and hierarchy.
• Discuss key personnel responsibilities and functions.
• Mention any plans for team growth or development.
• Address any advisory boards or external support.

Management summary of coffee shoppe business.

8. Financial Plan

A financial plan should include sales and revenue forecasts, profit and loss statements , cash flow statements , and balance sheets .

Now, if you plan to pitch investors or submit a loan application, you’ll also need a “use of funds” report. Here you outline how you plan to leverage any funding you might acquire for your business.

With our business templates , you can create your own income statement, cash flow statement, and balance sheet.

Tips for Writing Financial Plan

• Include detailed financial projections (income statement, cash flow, balance sheet).
• Explain your funding requirements and sources.
• Discuss your pricing and revenue model.
• Describe your expense management and cost controls.
• Mention any financial risks and mitigation strategies.
• Highlight key financial milestones and goals.

Financial highlights of foodShack business.

9. Key External Drivers

External drivers refer to the external factors or influences that significantly impact the activity and growth of an industry. These drivers include outsourcing of non-core activities, changes in economic activity, competition from other industries, and the complexity of business legislation.

Additionally, external drivers encompass the effects of changes in new business formation, especially among small businesses, which directly affect the demand for services within the industry.

Tips for writing key external drivers

• Identify and analyze current and emerging market trends in your industry.
• Assess potential positive or negative impacts these trends may have on your business.
• Evaluate broader economic conditions, including inflation rates, interest rates, and GDP growth.
• Elucidate how changes in economic conditions could influence consumer behavior, product demand, and overall cost structure.
• Outline key industry regulations and compliance requirements, discussing potential impacts on operations, costs, and market access.
• Highlight relevant technological advancements and explain their potential effects on your product or service offerings, operations, and competitiveness.
• Analyze current and potential future competitors, emphasizing the evolving competitive landscape’s impact on market share, pricing strategy, and overall business strategy.
• Consider social and cultural factors influencing consumer preferences and behaviors, exploring how societal changes can affect product demand.
• Evaluate environmental trends and regulations, discussing potential impacts on operations, supply chain, and customer perceptions.
• Assess political stability, government policies, and geopolitical factors, exploring potential risks and opportunities from political changes.
• Discuss global market conditions, analyzing how global economic trends, trade policies, and currency fluctuations may affect operations and expansion plans.
• Identify and discuss potential risks in the supply chain, such as disruptions, shortages, or geopolitical issues.
• Consider demographic shifts affecting your target market and discuss how changes may impact your customer base and marketing strategies.
• Highlight key legal and regulatory factors affecting the business, discussing potential legal challenges, compliance costs, and regulatory changes.
• Outline comprehensive risk management strategies, including contingency plans and risk mitigation strategies.
• Explain how you will monitor external drivers and emphasize the importance of staying agile and responsive to changes in the external environment.

10. Startup Summary

The startup summary serves as a comprehensive overview of essential financial aspects, encompassing total startup expenses, the overall value of startup assets, and the total requirements, which is the cumulative sum of all expenses and startup investments.

It provides a clear financial snapshot, outlining the costs involved in launching the business, the value of assets acquired, and the overall financial needs for the startup.

This section is crucial for entrepreneurs and potential investors, offering a transparent understanding of the financial foundation required to initiate and sustain the business successfully.

This roadmap ensures a realistic evaluation of the business idea, identifying potential challenges and offering solutions.To write an effective plan, focus on what sets your venture apart from competitors, maintain conciseness, and embrace flexibility as a living document.

Answer fundamental questions about your business, create actionable checklists, execute the plan, and continually revise and update based on experiences and feedback.This iterative process fosters continuous improvement, helping entrepreneurs stay adaptable and enhance their business strategies over time.

Tips for writing Startup Summary

• Clearly state the startup’s name and provide a concise description of its activities.
• Include a succinct mission statement capturing the startup’s purpose and goals, reflecting its core values.
• Specify the founding date and offer brief bios of key founders, highlighting relevant experience.
• Summarize the startup’s concept, explaining offered products or services and key distinguishing features.
• Clearly articulate the problem or need in the market that the startup addresses, defining the target audience.
• State what makes the startup unique, whether it’s a special feature, market gap, or competitive advantage.
• Provide a brief description of the market opportunity, covering target market size, trends, and growth prospects.
• Outline how the startup plans to generate revenue, detailing streams, pricing strategy, and potential partnerships.
• Offer a snapshot of the startup’s current status, highlighting key achievements such as product development or partnerships.
• If seeking funding, clearly state the amount sought and its allocation, covering areas like product development and marketing.
• Include a high-level financial summary with key projections for revenue, expenses, and profitability.
• Briefly outline future aspirations and plans, encompassing areas like expansion, product development, or strategic partnerships.

11. Projected Industry Growth

The projected industry growth is a pivotal aspect that forecasts the expansion of a specific sector over a defined timeframe.

For instance, it could provide an estimate of where that particular business will be standing in the next 10 years, and what will be the average annual growth rate of that industry.

This information provides prospective investors and stakeholders with a clear understanding of the industry’s potential and positions the startup within a dynamic and flourishing market.

Tips for writing Projected Industry Growth

• Emphasize the importance of industry trends and growth to your business.
• Provide a concise overview, including market size, major players, and recent trends.
• Briefly explain how you gathered data on industry growth projections (e.g., market research reports, expert interviews).
• Identify and discuss prevailing trends, such as technological advancements, changes in consumer behavior, and regulatory shifts.
• Summarize the industry’s historical growth, highlighting growth rates, market expansion, and notable milestones.
• Highlight key factors expected to drive industry growth, such as emerging markets, technological innovations, and demographic shifts.
• Discuss specific opportunities within the industry, including gaps in the market, underserved segments, or areas of competitive advantage.
• Acknowledge potential challenges or risks that could impact industry growth, demonstrating a realistic understanding.
• Present projections for future growth rates based on historical data, expert opinions, and your analysis. Include short-term and long-term projections.
• Discuss how key competitors are positioned to leverage industry growth, emphasizing your business’s differentiation strategies.
• Consider the regulatory landscape impacting growth, discussing anticipated changes and their potential effects on the industry.
• Explore international trends and their implications for industry growth, including factors like global economic conditions and geopolitical influences.

Here is example of market analysis section of a bank.

12. Break-even Analysis

The break-even analysis serves as a vital financial tool, offering a detailed estimation of key metrics such as Sales Revenue, Cost of Sales, Gross Profit, Fixed Expenses, and Income Before Tax.

These critical components are visually presented through a bar graph, providing a clear and concise overview of the financial dynamics.

Additionally, the break-even analysis delves into a 12-month forecast, outlining the projected amount of revenue generated and the corresponding fixed costs.

This section is instrumental in helping stakeholders understand the financial threshold at which the business covers its costs and begins to generate profit.

Tips for writing Break-even Analysis

• Define break-even analysis as a financial calculation where total revenue equals total costs.
• Identify constant costs regardless of production or sales levels.
• Enumerate and explain costs changing with production or sales.
• Present the break-even analysis formula, indicating the units needed to cover costs.
• Perform a practical break-even calculation using business-specific fixed costs, selling price, and variable cost per unit.
• Include a break-even chart or graph for a visual understanding of cost-revenue dynamics.
• Conduct a proactive sensitivity analysis to explore how changes in variables impact the break-even point.
• Specify the anticipated timeframe to reach the break-even point in terms of months or units sold.
• Clearly outline assumptions made in the analysis and provide justifications for transparency and credibility.
• Acknowledge potential risks or challenges that may affect the accuracy of the break-even analysis.
• Briefly mention contingency plans for difficulties in reaching the break-even point within the projected timeframe.

13. Management Summary

The management summary within the business plan provides a concise overview of the organizational structure and key personnel.

This includes a count of individuals, specifying the number of founders and operational team members integral to the organization.

The summary delves into the roles and responsibilities of each key figure, offering insights into the leadership dynamics driving the business.

Furthermore, the management summary sheds light on the financial aspect by presenting details about personal wages and payroll allocations for both founders and operational staff.

This comprehensive section ensures a clear understanding of the human resource framework and the financial commitments associated with the management team, crucial for stakeholders evaluating the business’s operational strength and leadership capability.

Tips for Writing Management Summary

• Highlighting the critical role the management team plays in the business’s success, the introduction emphasizes their significance.
• Listing each key member with names, positions, and brief role summaries introduces the core of the management team.
• Providing brief biographies for each team member underscores their relevant experience, skills, achievements, and industry-specific expertise.
• Clearly outlining roles and responsibilities emphasizes how each team member’s skills contribute to the overall success of the business.
• Sharing the team’s vision and strategy involves discussing key strategic goals and outlining the plans to achieve them.
• Highlighting notable achievements or milestones showcases the team members’ successful ventures, industry recognition, or career accomplishments.
• Discussing team dynamics emphasizes collaboration and the complementary nature of their skills in driving the business forward.
• Introducing advisory board members, if applicable, underscores the additional guidance and expertise they bring to the business.
• Discussing how the team plans to contribute to future growth and development includes strategies for talent acquisition, leadership development, and succession planning.
• Touching on the team’s culture and values emphasizes their role in shaping the overall ethos of the business.
• If seeking investment, briefly mentioning how the management team plans to use funding for business growth and development provides insight into their financial strategy.

Here is example of marketing and sales plan section of a bank.

14. Financial Indicators

The financial indicators section within the business plan helps in evaluating the fiscal health and performance of the organization.

Year-after-year profitability estimates take center stage, encompassing key metrics such as gross margin, net profit margin, and EBITDA to revenue.

These indicators provide a comprehensive understanding of the business’s ability to generate profit relative to its revenue.

Furthermore, the financial indicators extend to leverage ratios, including the critical Debt to Equity ratio, Debt to Assets ratio, and Interest Coverage ratio.

These metrics illuminate the organization’s capital structure, debt management, and its capacity to meet interest obligations.

Liquidity ratios includes the Current Ratio and Current Debt to Total Asset Ratio.

These ratios provide insights into the company’s short-term financial health and its ability to meet immediate obligations.

The financial indicator toolbox is enriched with additional metrics, notably the Revenue to Equity ratio, which sheds light on the efficiency of generating revenue from equity investments.

Tips For Writing Financial Indicators

• Detailed revenue forecasts for the next 3-5 years. Breakdown by product/service and geographical regions.
• Detailed breakdown of anticipated expenses. Include fixed and variable costs, operational expenses, and other relevant expenditures.
• Historical P&L statements if available. Projected future profits and losses based on revenue and expense projections.
• Outline of expected cash inflows and outflows. Emphasis on the ability to meet short-term obligations.
• Snapshot of the company’s financial position. Includes assets, liabilities, and equity.
• Calculation and presentation of key financial ratios (liquidity, solvency, profitability). Discussion on the significance of these ratios.
• Identification and explanation of relevant KPIs. Highlighting alignment with the overall business strategy.
• Discussion of potential financial risks. Mitigation strategies and addressing uncertainties.
• Clear statement of the amount and purpose of funds required.
• Outline of key assumptions underlying financial projections. Rationale for these assumptions.
• Summary of industry financial trends and business positioning. Outlook on future financial prospects considering market dynamics.

Discover Business Plan Formats and Free Templates

Looking For The Right Business Plan Format?

These sample business plans will provide you with a complete structure and format for your business plan, which will give you a head start on developing your document, so you won’t be stuck seeing an empty page and wondering what to write.

Simply going through the process of writing a business plan is one of its key benefits. If you sit down to write, you’ll naturally think about your startup costs, your target market , and any market analysis or research you’ll need to conduct. In addition to defining your position among your competitors, you will establish your goals and milestones.

You can see what should be included in a sample financial plan, but It is wrong to assume that a sample company’s financial projections will fit your own. If you need more resources to get you started, we recommend this guide on how to write a business plan .

In addition, you can download our 40+ free business plan templates covering a range of industries.

Business Plan Examples For Students PDF

Common types of business plan, 1. one page business plan.

One-page business plans are short, compact, and to the point and are designed to make the plan easy to read at a glance. Make sure to include all of the sections, but truncate and summarize them

2. Start-up business plan

Start-up business plans are for businesses that are just getting started. They are usually developed to secure outside funding. In this regard, financials are of increased importance, as well as other sections that determine whether your business idea is viable, such as market research.

3. Strategic business plan

A strategic business plan lays out a company’s goals and how it will achieve them at a high level. It is a foundational document for the company as a whole. A strategic business plan allows all levels of the business to see the big picture, inspiring employees to work together to reach the company’s goals.

4. Feasibility business plan

Developing a feasibility plan answers two primary questions about a business venture: who would purchase the service or product the company wants to sell, and if the venture is profitable.

5. Internal business plan

Internal Business plans are geared to a specific audience within a company to keep your team on the same page and focused on the same goals.

Conclusion​

In conclusion, whether you’re venturing into a traditional business or creating an innovative startup, the significance of a well-crafted business plan cannot be overstated. Different types of business plans cater to specific needs, from internal alignment to strategic expansion. Employing a template in MS Word ensures a polished presentation. The process of writing an executive summary, creating a plan, and defining the components of your business plan is essential.

Recognizing the need for a comprehensive and standard business plan can help guide your endeavors. Whether you choose to write a full business plan or opt for a one-page business overview, leveraging templates in MS Word can simplify the process. In essence, understanding the types of business plans and utilizing an executive summary template provides a structured approach to showcase your business overview.

Take inspiration from example business plans to tailor your strategy, ensuring a roadmap for success in the dynamic world of entrepreneurship. Always remember, a meticulously crafted business plan not only communicates your vision effectively but also serves as a valuable resource that can help secure investments and guide your business’s growth trajectory.

Frequently Asked Questions

Begin with an executive summary, delve into market analysis, outline your strategies, create financial projections, and use available business plan examples as templates to guide your writing.

A comprehensive business plan template should encompass key sections such as an executive summary, business description, market analysis, marketing strategy, organizational structure, and financial projections. Seek templates online that cover these elements.

Tailor your business plan to the scale of your small business. Define your objectives clearly, outline cost-effective strategies, and emphasize agility in adapting to market changes.

Explore well-crafted business plan examples you can visit our website  wisebusinessplan.

The fundamental components include an executive summary, business description, market analysis, marketing and sales strategy, organizational structure, product/service description, and financial projections.

Investors focus on growth potential, detailed financial projections, market analysis, competition analysis, and the qualifications and experience of your management team when reviewing a business plan.

To find a business plan example for a tech startup,you can visit our visit wisebusinessplan .

A business plan provides a comprehensive overview of your entire business, including strategies, operations, and financials. In contrast, a business proposal typically focuses on a specific project or offer, outlining the details and benefits to a potential client.

Craft an engaging executive summary by summarizing your business’s mission, highlighting the market opportunity, showcasing your product or service, and providing a concise overview of your financial projections.

Seek tailored business plan examples for nonprofit organizations you can visit wisebusinessplan .

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These business plans are written by MBA writers. Real-world use cases were used in these plans.

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Writing an Effective Business Plan

By henry sheykin, introduction.

A business plan is an important tool for any business. It outlines the objectives and goals of the business, and how to achieve them. A business plan is also critical for providing investors with the information they need to make an informed decision about investing in a company. For small business owners and entrepreneurs, a business plan can be a valuable tool for attracting investors.

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Having an effective business plan can help your company stand out from the competition and show potential investors that you have done the research and can execute a plan to bring your business to success. It demonstrates that you have a clear understanding of your business and its goals. Having a detailed and comprehensive business plan is essential if you are hoping to attract investors. Here are some tips on how to use your business plan to attract investors.

Begin With Market Analysis

Before investors will consider investing in your business, they need to understand that there is a market opportunity they could take advantage of. Providing a detailed, well-researched and accurate market analysis can help investors understand the potential of the business and make an informed decision.

Well-Researched and Accurate Market Analysis

A strong business plan includes a well-researched and accurate market analysis. Presenting a comprehensive overview of the market trends, potential customers, competitors etc within the industry can be very helpful in convincing investors to put their money into your business.

Cover Industry Trends

Providing up-to-date information and insights into industry trends will help investors understand the current state of the industry and the potential growth opportunities that may be available to them. List out industry-specific statistics, the current size of the market, and the major players in the industry to demonstrate the potential of the business.

• Highlight the potential of the business within the market
• Showcase industry-specific insights
• Give detailed numbers and trends

Demonstrate Your Unique Selling Proposition

Your unique selling proposition (USP) is what makes your business different than your competitors. In order to attract investors, you must present a clear and compelling USP. Here are two important points to keep in mind.

Show Clearly Defined Competitive Advantages

Investors want to know what makes your business different and better than the competition. Make sure to list out advantages of your business through highlighting unique features, services and pricing. Your competitors may offer similar things, so make sure to put a spotlight on your competitive advantages.

Explain Why Your Business is a Better Option Than Competitors

It is not enough to just list out the advantages of your business. You must also be able to explain why your business is a better option than others. For each benefit that you highlight, you need to illustrate why you are a better choice than the competitors. This will help convince the investors that your business is worth investing in.

Outline Your Business Model

Your business model is the backbone of your business plan and should be thoroughly outlined in detail to attract potential investors. Investors want to know that there is potential for their money to make a profit, so it is important to explain how your business will generate revenue.

Explain How Your Business Will Make Money

Explaining the specifics of how your business will make money can give potential investors a clear understanding of your business model. Provide a detailed explanation of each revenue stream your business plans to use. Include the cost of providing goods or services and the anticipated revenue from each offering.

Describe Your Industry and Customer Base

It is important to give a thorough description of the industry and customer base your business targets. Potential investors want to know that their investment is backed by numbers, so outlining market size, customer demographics, growth opportunities, competitive landscape, and the product or service you offer can be beneficial.

Explaining how you plan to grow your customer base and further increase revenue can also be attractive to investors. Lay out tactics you plan to use such as marketing plans, increasing demand, and creating a competitive advantage. This can help paint a picture of a potential future of an investment which investors like to see.

Showcase Your Management Team

Attracting investors starts with demonstrating a good team. What makes the team good is not just the team members, but also their experiences and successes, so make sure to showcase both in the plan.

Provide background and experience of team members

Start by introducing the experinence and qualifications of the team behind your business. That includes education, past employment, and other relevant factors. Investors are looking to support experienced companies, so it's important to make their resumes and experience stand out.

Highlight successes of team members

In addition to highlighting the team's experience, you should also point out past successes and any awards that each member has earned. This could include awards for business, awards for leadership and for creativity, for example.

This is key to demonstrating the team’s capabilities and helping to show investors that the team can successfully execute on the business plan.

• Focus on the experiences and successes of the team members.
• Make sure to highlight the accomplishments of the team.
• Include awards and other recognitions.

Present Your Financial Forecasts

Your business plan is an essential tool when looking to attract investors, and one of the most important elements of any business plan is the financial forecasts. Your financial projections can be a great indicator of how likely it is that you can achieve success, and even more importantly, enable potential investors to determine whether your investment offers them a potential return. There are two components to presenting your financial forecasts:

• Present realistic & achievable financial target forecasts

It is important to be realistic when forecasting your financial targets and to take into account any risks and opportunities that may arise. Don’t try to be overly ambitious as this will be seen as unrealistic and unlikely to be achieved in the short or medium term. Consider carefully what returns your investors can realistically expect, and ensure you have a plan in place to achieve them.

• Provide high-level statements of expenditure

When presenting your financial forecasts to potential investors, it is important to provide clear, concise information about where the funds will be allocated. In addition, you should also present a breakdown of your expenditure and costs, and any estimated overheads. This will enable potential investors to understand the breakdown of investment required, as well as the costs associated with the business. Provide a high-level statement outlining your expenditure and costs, as this will help to reassure potential investors that their funds are being used in the best way possible.

Creating a business plan is a essential step for any entrepreneur to take if they want to attract potential investors. A business plan should outline the specifics of the company, state the company’s competitive advantages, define short and long term goals, discuss any potential financial risks, provide a realistic description of the potential returns for investors, and outline an exit strategy.

Creating a persuasive business plan is no easy feat. It requires research, structure, passion, and clear communication to succinctly describe your company’s goals and objectives. The contents must be persuasive in order to attract the attention of potential investors.

By taking the steps outlined in this article, entrepreneurs can present their business plan in a professional and organized manner to maximize their chances of garnering interest from investors. A solid business plan is an effective way to attract investors, as it demonstrates the optimization of business risk and the growth potential of the company.

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How to Put a Business Plan Together to Attract Investors

Organising a business plan that is articulate, ambitious and stands to scrutiny, is essential in today’s competitive global economy. This requires plenty of time and research, and the process should not be rushed, even if you are anxious to get your business to market as soon as possible.

First of all, define what you do

Define what your business does and the problem it's trying to solve. If an investor doesn’t understand what your business does after reading the first paragraph of your business plan, you may have lost their attention already.

Make this definition as succinct as possible, as you will only have seconds to make a good first impression - whether an investor is reading your business plan or listening to your pitch face-to-face.

Create your executive summary and description

Include all the relevant information about your business, such as the year it was founded, where your office(s) is located, what you offer, and what differentiates you from competitors.

Next, describe your business in more detail and talk about the strengths and weaknesses of your competitors. Investors will want to learn how your business will capitalise on its opportunities and try to alleviate its threats.

Determine who your ideal investors are

This is an important - often overlooked - factor when businesses are looking for capital. Ideally, you should target investors that have a good track record of investing in successful companies in your industry.

You will need to do your own investigations. For example, you might want to check how an investor's investments are performing, what their reputation is like among their peers, and how often they invest in products or services that are similar to yours.

Get your stats right

This may sound obvious, but it’s very easy to make an error in your financial projections. Investors have a meticulous eye for detail and will spot an obvious mistake.

Make sure your business plan includes the following information:

• Annual turnover and net profit/loss for the last year
• Total liabilities
• Your projected annual turnover and net profit/loss for the next 3 years and the annualised percentage increase
• The number of customers/clients you have
• The average expenditure of each customer/client
• Stats on projections of your industry’s growth in 3, 5 or 10 years (use reliable sources), to garner investors’ enthusiasm

Prepare your written and verbal business pitch

One of the most daunting tasks you will face as a business owner is pitching your product to investors. If you’re familiar with the show ‘Dragon’s Den’, you’ll understand how daunting it can be to pitch to investors who may seem overly critical or sceptical.

However, this is a rather pessimistic interpretation. Investors are not trying to catch you out; they are looking for opportunities that will deliver good long-term returns for them.

Creating a written business pitch gives you more time to perfect your tone and optimise your messaging for your target audience.

However, you’ll still need to be ready to pitch your business verbally when the opportunity arises. Be confident, don’t pause after each question, and memorise important stats (such as last year’s turnover) to instil confidence and build trust in your business.

Explain your marketing strategy

A coherent, carefully planned marketing strategy can help you attract investors' attention, particularly if you work in an industry that they're interested in. Your marketing materials need to demonstrate clearly to investors that your business is in safe hands and your products or services - including your intellectual property - are unique and unlikely to be easily replicated by big corporations.

You'll need to show how you intend to grow your customer base in different environments - such as your website, social media, networking events, word-of-mouth - and how you will measure the success of your marketing campaigns (for example, with click-through rates for online paid media campaigns). At a minimum, investors will expect you to have a well-designed website and a strong social media presence.

Explain your sales strategy

This is your chance to impress investors with your numerical skills. You don't need to be a maths genius to create a great sales plan; however, you need to know your key numbers off by heart and confidently explain how you calculated them.

For example:

• If you expect your overheads to fall each year and your net profit margins to increase, an investor will want to know where these savings will come from.
• If you predict that sales will increase by 30% in year 1, 50% in year 2 but 200% by year 3, an investor will want to see the evidence to support these predictions.

Three big mistakes to avoid when preparing a business plan to attract investors:

1. Underestimating or overestimating how much funding you need

If you ask for too little funding, your business may struggle to cover its overheads and repay any debts. But if you ask for too much, a prospective investor may be confused about what you need the money for. They may also ask you to give up more equity from your business.

2. Overestimating your valuation, future revenue or profit

As we alluded to earlier, investors will quickly know when a business is overvalued or your future revenue or profit projections seem too high. Don’t exaggerate. Be honest about where you are now and how much your business could grow with an investor’s help.

3. Being opaque about how you’ll use your investors’ money

Investors don’t inject capital into a business just to help it stay afloat for a short while. This money is supposed to act as a bridge that will get you to the next stage of your business journey.

Creating a business plan that attracts investors is a challenging but rewarding process. You’ll need to articulate your business clearly, have a good understanding of the opportunities and threats in your market, and be ambitious but realistic. You must know your finances and avoid making any careless mistakes in your projections. Ultimately, however, your success will be determined by your ability to pitch your business idea confidently and earn investors’ trust.

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How to Create a Business Plan Investors Will Love Here are some strategies you can use to create a strong business plan that will translate into funding.

By Teresa Ciulla Nov 6, 2014

Opinions expressed by Entrepreneur contributors are their own.

In the book, Write Your Business Plan , the staff of Entrepreneur Media offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture and what it takes to ensure success. In this edited excerpt, the authors offer tips on creating a business plan you can use when seeking financing for your business.

A business plan is almost essential for entrepreneurs who are seeking to raise money to help fund their companies. In fact, business plans are so closely tied to fundraising that many entrepreneurs look at them as suited only for presenting to investors and overlook the management benefits of planning.

But for those entrepreneurs who are seeking funding, a business plan accomplishes several things. First, it helps convince potential sources of funding that the entrepreneur has thought the idea through. It also gives any actual investors a set of financial benchmarks for which the entrepreneur can be held accountable.

In a sense, a business plan is a ticket to enter the financial dance. It would be overly simplistic to say that you must have a plan to get funding. But it's not too simplistic to say that a good plan will help you raise your funds more quickly, more easily and more completely than you could without it.

Before seeking investors, you need to know exactly what you're seeking and where that money will be spent. Not unlike justifying expenses when sending your taxes to the IRS, you need to justify the amounts you're asking for and be specific -- investors aren't simply writing out checks with no idea of where the money will be spent. Sure you can ask for a little more than you need in hopes that the negotiating brings you down to the amount you truly need for funding ... or something reasonably close. It's also important to maintain your credibility because you'll probably need additional funding as your company grows. If you squander the money your investors have provided, you can be pretty sure you won't get a round two when you need additional funding.

Having justification for what you put in your plan is essential for winning over someone reading it. Random ideas get random results. Well-thought-out, justified ideas get serious consideration.

It's also advantageous to take a few minutes to make sure your company has the potential to succeed before digging for those hard-to-get dollars. For most of us, our desires about where we'd like to go aren't as important as our business's ability to take us there. Put another way, if you choose the wrong business, you're going nowhere.

Luckily, one of the most valuable uses of a business plan is to help you decide whether the venture you have your heart set on is really likely to fulfill your dreams. Many businesses never make it past the planning stage because their would-be founders, as part of a logical and coherent planning process, test their assumptions and find them wanting.

Test your idea against at least two variables. First, financial, to make sure this business makes economic sense. Second, lifestyle, because who wants a successful business that they hate?

Assessing your company's potential

Answer the following questions to help you outline your company's potential. There are no wrong answers. The objective is simply to help you decide how well your proposed venture is likely to match your goals and objectives.

1. What initial investment will the business require?

2. How much control are you willing to relinquish to investors?

3. When will the business turn a profit?

4. When can investors, including you, expect a return on their money?

5. What are the projected profits of the business over time?

6. Will you be able to devote yourself full time to the business financially?

7. What kind of salary or profit distribution can you expect to take home?

8. What are the chances the business will fail?

9. What will happen if it does?

10. Do you have a backup or alternative plan?

Tips to help you win funding

Keep these tips in mind to help you win the funding you are searching for:

1. Spend extra time working on the executive summary. Because bankers and professional investors receive so many business plans, they sometimes go right to the executive summary for an overall view of what your plan is all about. If you can't seize their interest in your executive summary, go back to the drawing board and try again.

2. Make sure your business plan is complete. You'd be surprised at how many business plans are submitted with important data missing. You need to double- and triple-check to make sure all the important components are included. Even when using business plan software, people skip sections or decide an area isn't important. Leave nothing to chance. A well-written and complete business plan gives you a higher chance of success and better odds of getting the financing you're seeking.

3. Be able to back up anything you have on paper if asked for more details. While the business plan should have all the answers, investors, bankers and venture capitalists are shrewd and ask questions that may not be answered in the plan. Be ready to answer anything they can possibly throw at you. Expect the unexpected, and prepare for it.

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Investment Company Business Plan

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Investment Company

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

This sample plan was created for a hypothetical investment company that buys other companies as investments.  In this sample, the hypothetical Venture Capital firm starts with $20 million as an initial investment fund.  In its early months of existence, it invests $5 million each in four companies.  It receives a management fee of two percent (2%) of the fund value, paid quarterly.  It pays salaries to its partners and other employees, and office expenses, from the management fee.

The investments show up in the Cash Flow table as the purchase of long-term assets, which also puts them into the balance sheet as long-term assets.  You can see them in this sample plan, in the first few months.

In the third year, one of the target companies fails, so $5 million is written off as failure.  You’ll see how that looks as a $5 million sale of long-term assets in the cash flow, and a balancing entry of $5 million in costs of sales in the profit and loss, making for a loss and write-off that year.  The result is a tax loss, and the balance of investments goes to $15 million.

In the fifth year, one of the target companies is transacted at $50 million.  You’ll see in the sample how that shows up as a $45 million equity appreciation in the sales forecast, plus a $5 million sale of long-term assets in the cash flow.  At that point there’s been a $45 million profit, and the balance of long-term assets goes down to $10 million.

This is a simplified example.  The business model holds long-term assets and waits for them to appreciate.  It doesn’t show appreciation of assets until they are finally sold, and it doesn’t show write-down of assets until they fail.  Sales and cost of sales are the appreciation and write-down of assets, plus the management fees.

The explanation above has been broken down and copied into key topics in the outline that are linked to corresponding tables.  These topics are:

• 2.2     Start-up Summary
• 5.5.1  Sales Forecast
• 6.4     Personnel
• 7.4     Projected Profit and Loss
• 7.5     Projected Cash Flow
• 7.6     Projected Balance Sheet

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

Content has been omitted from this sample plan topic, and following sub-topics.  This sample plan has an abbreviated plan outline.  With the exception of the Executive Summary, only those topics linked to key tables have been used.

The focus of this sample plan is to show the financials for this type of company.  Brief descriptions can be found in the topics associated with key tables.

2.1 Start-up Summary

This hypothetical Venture Capital firm starts with $20 million as an initial investment fund.  The venture capital partners invest $100,000 as working capital needed to balance the cash flow from quarter to quarter. 

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

Strategy and implementation summary, sales forecast forecast sales .">.

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

7.1 personnel plan.

This hypothetical company pays salaries to its partners and other employees, and office expenses, from the management fee of two percent (2%).

Financial Plan investor-ready personnel plan .">

8.1 projected profit and loss.

Please note that in the third year one investment is written off as a failure, producing a $5 million cost which ends up showing a loss for the year of nearly $5 million.  The sale of equity at the end of the period enters the sales forecast and the profit and loss statement as a $45 million gain. 

8.2 Projected Cash Flow

The Cash Flow shows four $5 million investments made in the first few months of the plan. 

In the third year, one of the target companies fails, so $5 million is written off as failure.  You’ll see that shows as a $5 million sale of long-term assets in the cash flow, and a balancing entry of $5 million in costs of sales in the profit and loss, making for a loss and write-off that year.  The result is a tax loss, and the balance of investments goes to $15 Million.

In the fifth year, another investment is transacted at $50 million.  This shows up as a $5 million equity appreciation in the Sales Forecast, plus a $5 million sale of long-term assets in the Cash Flow.  At that point there’s been a $45 million profit and the balance of long-term assets goes down to $10 million. 

The partners invest an additional $100,000 in the fourth year as additional working capital to balance the cash flow of the company. 

8.3 Projected Balance Sheet

You can see in the balance sheet how the ending balances for long-term assets were not re-valued.  They remain at the original purchase price until they are sold, or written off as a complete loss.  There is a $5 million write-off in the third year, and a sale of $5 million worth of assets in the last year.  That sale of $5 million in assets produces the $5 million sale at book value plus the $45 million gain in the sales forecast and profit and loss table.

8.4 Business Ratios

The Standard Industry Code (SIC) for this type of business is 7389, Business Services.  The Industry Data is provided in the final column of the Ratios table. 

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How to balance business and personal investments as an entrepreneur.

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Dr. Clemen Chiang is the CEO of Spiking .

When you launch a startup, you pour your time, energy and money into growing the business, sometimes at the expense of your personal financial health. Scaling a startup is an intense and arduous process, involving long hours, steadfast commitment and considerable risk.

You can easily become overextended in both directions when trying to balance the financial demands of your business and your home life. On the one hand, you need to build a substantial runway for your startup, ensuring that you have enough cash on hand to survive in the market until you establish a customer base. On the other hand, you still need to pay for your living expenses and support yourself and your family while you prepare for takeoff.

Many entrepreneurs fall into the common trap of caring for the needs of their shareholders, employees and customers but neglecting their own. In my own experience as an entrepreneur, I’ve always known that I must take care of my own finances first, before I can take care of my startup, and I encourage you to do the same. Invest in yourself in parallel with investing in your business—and you are likely to see positive returns in both areas of your life.

The Business Value Of Personal Investments

Investing hones your skills, much like a sparring partner in a boxing match. It challenges you, informs you and forces you to think critically about your financial decisions. If you’re like most entrepreneurs, you dream of ringing the New York Stock Exchange's opening bell to celebrate your company’s IPO. And what better way to understand what makes a strong publicly listed company than to become an investor in a portfolio of these companies?

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By thoroughly researching where to make your personal investments, you will be exposed to the best of the best companies in different sectors. You can learn from their products, marketing ideas and business strategies, knowing that they have already gone through the validation of the public markets. While you build a personal investment portfolio to give yourself a financial safety net, you will also be building knowledge that will help inform your own business decisions.

Strategies For Becoming A Proactive Investor

I recommend the following best practices to make investment decisions that are beneficial for you and your business.

Make Investing Part Of Your Routine

Start by allocating a portion of your monthly income to an investment budget. Designate a time every month, such as when you do payroll for employees or pay your personal bills, to update your investment portfolio. Research market news and updates on sectors that interest you, and aim to sharpen your mind as an investor and make proactive decisions on what stocks to buy.

Ask questions that contribute to your ongoing learning and development; for example: What does it take to be a good publicly traded company? What qualities am I looking for in a stock to invest in? How can I apply these lessons to my own business?

Once you've established a monthly routine, experiment with making it a weekly or even daily habit. Start your morning with a cup of coffee and the financial news. Tune into CNBC or Bloomberg and listen to the latest stock market news. If an opportunity interests you, take out your phone and place the order.

Invest, Don't Save

For my father's and grandfather's generations, saving money was the main approach to preparing for the future. But for younger generations in the current climate, having a savings plan is not enough. Inflation is increasing, geopolitical conflicts are causing instability and the price of goods and services will continue to rise. You can't count on the interest rates of your savings account; you need to invest and start early to safeguard your financial future.

Anyone can save money in a bank account, but developing an investment strategy requires more financial and business savvy. Focus on extracting wisdom from every conscious investment decision you make. Why are you investing in one company over another? Are they solving a big pain point in the marketplace? How is my startup meeting customers' needs? Are we solving pain points in a similar way?

Make A COSY Start

For new investors, I advocate for what I call “the COSY start,” which stands for cryptos, options, stocks and saying “yes” to investing. I’ve found that these investment instruments offer high liquidity, meaning they are easy to buy and sell, unlike illiquid assets, such as real estate, or complex investments, such as forex trading.

Continue On The SALT Journey

Once you’ve built a solid foundation for investing, you can foster ongoing growth as an investor by embarking on “the SALT journey”:

• Share your experiences and lessons learned in a community of like-minded entrepreneurs and investors.
• Leverage artificial intelligence to make more efficient and timely investment decisions.
• Learn continuously by reading books, following the news, watching videos and taking courses.
• Trade in live sessions to hone your skills. Learning is important, but the real value is in firing off real trades.