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Building a Solid Internal Business Plan: Expert Guidance and Insights

An internal business plan is like a compass for your organization, guiding your team towards common goals and strategies. In this guide, we’ll break down each component of an internal business plan in simpler terms and share expert tips to help you create a plan that keeps your team on the same page.

Key Highlights

• An internal business plan is a roadmap that guides your team towards common goals and strategies.
• It helps align your team, make better decisions, and achieve success.
• Create a clear and concise plan with SMART goals, action steps, and communication strategies.

What is Internal Business Plan?

A business plan acts as a blueprint for your organization’s future, detailing its goals, strategies, and financial projections. An internal business plan takes this concept further, focusing specifically on aligning your team and ensuring everyone understands their roles and responsibilities in achieving your shared vision.

Differences Between Internal and External Business Plans:

Here’s a breakdown of the key differences between internal and external business plans:

What's the Purpose of an Internal Business Plan?

Think of an internal business plan as your team’s GPS for success. It’s all about getting everyone on the same page and heading toward the same goals. Unlike the fancy plans you show off to investors, this one is all about making sure your team knows where you’re headed and how to get there together.

Here's Why It Matters:

• Teamwork and Focus: It spells out what your gang is trying to achieve and gives everyone a clear focus on the mission.
• Smarter Choices: Helps everyone make better decisions by laying out the game plan. It's like having a playbook for your business moves.
• Using Resources Wisely: Shows where the money, people, and tech need to go, making sure everything's used just right.
• Making Everyone Accountable: Sets goals and ways to measure success so that everyone's accountable for their part.
• Happy Teams: When everyone knows what they're doing and why, it makes the team feel united and pumped up.
• Spotting Trouble Early: It's like having a radar for problems, so you can plan ahead and steer clear of disasters.

An internal business plan isn’t just a document—it’s your team’s guidebook, making sure everyone’s rowing in the same direction and making the right moves to reach those big goals.

Benefits of an Internal Business Plan:

• Improved Communication and Alignment: Creates a shared understanding of goals, strategies, and responsibilities within the organization.
• Enhanced Decision-Making: Provides a data-driven foundation for strategic decision-making and resource allocation.
• Increased Accountability and Performance: Establishes key performance indicators (KPIs) and promotes accountability for achieving goals.
• Boosted Team Morale and Motivation: A clear roadmap fosters a sense of purpose and direction for team members.
• Improved Risk Management: Identifies potential challenges and facilitates the development of contingency plans.

Overall, an internal business plan serves as a vital tool for achieving organizational goals, fostering collaboration, and ensuring long-term success.

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1. mission and vision: your organization's purpose (around 200 words).

Your mission defines why your organization exists, while your vision outlines what you aim to achieve in the future. Keep these statements clear and inspiring, as they set the direction for your entire team.

• Expert Tip 1: "Your mission and vision should motivate and unite your team. They're your organization's North Star." - Maria Rodriguez, Management Consultant.

2. Organizational Goals: What You Want to Achieve (Around 250 words)

Lay out your short-term and long-term goals. Make them specific, measurable, achievable, relevant, and time-bound (SMART). These goals give your team a sense of purpose and direction.

• Expert Tip 2: "Goals should be like checkpoints in a race - clear and achievable. They keep your team focused and motivated." - Mark Thompson, Organizational Strategist.

3. SWOT Analysis: Understanding Your Internal Landscape (Around 300 words)

Conduct a SWOT analysis to identify your organization’s strengths, weaknesses, opportunities, and threats. This helps your team understand your current position and potential challenges.

• Expert Tip 3: "SWOT analysis is like a diagnostic checkup. It helps you know where you're strong and where you need to improve." - Emily Turner, Business Analyst.

4. Key Strategies: How You'll Achieve Your Goals (Around 250 words)

Outline the strategies your organization will use to achieve its goals. These could include expanding to new markets, improving processes, or developing new products or services.

• Expert Tip 4: "Your strategies should align with your goals. They're the 'how' behind your 'what'." - David Reynolds, Strategy Consultant.

5. Action Plans: Who Does What (Around 350 words)

Break your strategies down into actionable steps. Assign responsibilities to specific team members, set deadlines, and define key performance indicators (KPIs) to track progress.

• Expert Tip 5: "Action plans turn ideas into actions. They make your strategies a reality." - Laura Martinez, Project Manager.

6. Budget and Resources: What You Need (Around 250 words)

Detail the budget and resources required to execute your action plans. This includes finances, manpower, technology, and any other resources necessary for success.

• Expert Tip 6: "Budgets ensure you have the resources to implement your plans. They're like a financial roadmap." - Susan James, Financial Analyst.

7. Monitoring and Evaluation: Keeping Things on Track (Around 300 words)

Explain how you’ll monitor progress and evaluate the success of your action plans. Regular assessments help your team stay on course and make adjustments as needed.

• Expert Tip 7: "Monitoring and evaluation ensure you're headed in the right direction. It's about continuous improvement." - John Stevens, Management Expert.

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8. communication plan: keeping everyone informed (around 200 words).

Describe how you’ll communicate the plan to your team. Transparency and clear communication are crucial to ensure everyone understands their roles and responsibilities.

• Expert Tip 8: "A well-communicated plan fosters teamwork and alignment. It's the glue that holds your organization together." - Maria Rodriguez, Communication Specialist.

Common Mistakes to Avoid

While crafting and implementing your internal business plan, be mindful of these common pitfalls:

• 1. Lack of Clarity and Specificity: Vague goals and objectives lead to confusion and hinder progress. Ensure your plan outlines SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals with clear action steps.
• 2. Ignoring Internal Analysis: Neglecting a SWOT analysis (strengths, weaknesses, opportunities, and threats) leaves you blind to internal challenges and untapped potential. Conduct a thorough assessment to gain a realistic understanding of your organization's capabilities.
• 3. Unrealistic Budgeting: Overestimating resources or underestimating costs can derail your plan. Develop a realistic budget based on accurate data and forecasts to avoid financial constraints.
• 4. Inadequate Communication: Failing to communicate the plan effectively to your team leads to misalignment and inefficiency. Foster open communication channels and ensure everyone understands their roles and responsibilities.
• 5. Rigid and Inflexible Approach: The business landscape is dynamic, so your plan should be adaptable. Be prepared to adjust your strategies and tactics as needed based on market changes, performance data, and feedback.

Tips to Overcome Challenges

• Seek feedback: Enlist the help of colleagues and stakeholders to review your plan and identify areas for improvement.
• Promote collaboration: Encourage open communication and brainstorming sessions to foster innovative ideas and solutions.
• Track progress regularly: Monitor key performance indicators (KPIs) to measure progress and identify areas needing adjustments.
• Be proactive: Anticipate potential challenges and develop contingency plans to minimize disruptions.
• Embrace flexibility: Be prepared to adapt your plan as needed based on evolving circumstances.

Measuring Success

Effective metrics for internal business plan success.

• Goal Achievement: Track progress towards achieving your defined SMART goals.
• Financial Performance: Monitor key financial metrics like revenue, profitability, and cost-effectiveness.
• Operational Efficiency: Measure improvements in efficiency through process metrics like cycle time and error rates.
• Team Performance: Evaluate team effectiveness by tracking KPIs like productivity, engagement, and satisfaction.
• Market Share and Growth: Monitor your market share and growth rate to assess your competitive position and market penetration.

Interpreting Data and Making Data-Driven Decisions:

• Analyze trends and patterns: Identify trends and patterns emerging from your data to understand the underlying drivers of success or failure.
• Investigate root causes: Delve deeper into the root causes behind performance data to pinpoint areas for improvement.
• Test and experiment: Utilize A/B testing and other experimental methods to validate your assumptions and optimize your strategies.
• Communicate data insights: Share key data insights with your team to promote transparency and inform decision-making.
• Make data-driven decisions: Base your strategic decisions on evidence and insights gleaned from your data analysis.

By implementing these tips and practices, you can avoid common pitfalls and effectively measure the success of your internal business plan. Remember, a successful plan requires continuous monitoring, feedback, and adaptation to ensure it remains relevant and effective in driving your organization towards its goals. Ready to write an internal business plan but don’t know what to do? Explore WiseBusinessPlans’ professional business plan writers to get started today!

What Must an Entrepreneur Do after Creating a Business Plan?

With your internal business plan finalized, it’s time to shift gears and focus on its execution. This crucial phase requires action, dedication, and strategic implementation to transform your vision into reality. Here’s what you, as an entrepreneur, must do after creating an internal business plan:

1. Secure Funding

• Assess your financial needs: Review your budget and determine the funding required to execute your plan. Explore various funding options, including personal savings, loans, grants, and angel investors.
• Craft a compelling pitch: Develop a concise and persuasive pitch deck that highlights your vision, market potential, and financial projections to attract investors.
• Build relationships with potential investors: Network with individuals and organizations interested in your industry and build relationships that can pave the way for funding opportunities.

2. Assemble Your Team

• Identify key roles: Determine the skills and expertise needed to implement your plan effectively.
• Recruit talented individuals: Find passionate and qualified individuals who share your vision and values, and build a cohesive and motivated team.
• Delegate and empower: Assign tasks and responsibilities based on individual strengths, fostering ownership and accountability within your team.

3. Execute Your Strategies

• Break down your plan into action steps: Divide your strategies into manageable tasks with clear deadlines.
• Implement best practices: Utilize proven strategies and methodologies aligned with your industry and goals.
• Monitor progress and adapt: Regularly track progress against your goals, identify areas needing improvement, and adapt your strategies as needed.

4. Foster Communication and Collaboration

• Communicate openly and transparently: Keep your team informed of progress, challenges, and decisions.
• Encourage feedback and input: Create an environment where team members feel comfortable sharing ideas and concerns.
• Build trust and collaboration: Foster a collaborative culture that encourages teamwork and shared ownership of success.

5. Measure Performance and Analyze Data

• Track key performance indicators (KPIs): Identify specific metrics aligned with your goals and regularly track their progress.
• Analyze data and draw insights: Utilize data to identify trends, understand performance drivers, and make data-driven decisions.
• Continuously improve: Leverage data insights to identify areas for improvement and adapt your strategies to optimize performance.

By following these steps after crafting your internal business plan, leveraging a well-designed business plan template can further assist in effectively translating your vision into action, propelling your entrepreneurial journey towards success.

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In summary, creating an internal business plan is about providing your team with a roadmap to success. By simplifying each section and focusing on clear communication, you’ll not only set your team on the right path but also promote unity and collaboration within your organization. Your internal business plan is your tool for achieving your mission and turning your vision into reality.

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14 Reasons Why You Need a Business Plan

10 min. read

Updated May 10, 2024

There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.

A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.

A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.

Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?

Good questions. Here’s every reason why you need a business plan.

• 1. Business planning is proven to help you grow 30 percent faster

Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The  process  of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed. 

You don’t have to just take our word for it. Studies have  proven that companies that plan  and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience  cash flow crises  that threaten to close them down. 

• 2. Planning is a necessary part of the fundraising process

One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.

Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture. 

A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality. 

Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money. 

• 3. Having a business plan minimizes your risk

When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations. 

As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can  do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans. 

Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.

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• 4. Crafts a roadmap to achieve important milestones

A business plan is like a roadmap for your business. It helps you set, track and reach business milestones. 

For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.

In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.

And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.

• 5. A plan helps you figure out if your idea can become a business

To turn your idea into reality, you need to accurately assess the feasibility of your business idea.

You need to verify:

• If there is a market for your product or service
• Who your target audience is
• How you will gain an edge over the current competition
• If your business can run profitably

A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.

Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.

6. You’ll make big spending decisions with confidence

As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. 

These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.

7. You’re more likely to catch critical cash flow challenges early

The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your  cash flow statement  is one of the three key financial statements you’ll put together for your business plan. (The other two are your  balance sheet  and your  income statement  (P&L). 

Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills. 

• 8. Position your brand against the competition

Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:

• What is your competition doing well? What are they doing poorly?
• What can you do to set yourself apart?
• What can you learn from them?
• How can you make your business stand out?
• What key business areas can you outcompete?
• How can you identify your target market?

Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete. 

• 9. Determines financial needs and revenue models

A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind. 

Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business. 

Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.

• 10. Helps you think through your marketing strategy

A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers. 

Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc. 

Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.

• 11. Clarifies your vision and ensures everyone is on the same page

In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there. 

Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.

• 12. Future-proof your business

A business plan helps you to evaluate your current situation and make realistic projections for the future.

This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.

Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.

By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.

You’ll also be in a better position to seize opportunities as they arise.

Further Reading: 5 fundamental principles of business planning

• 13. Tracks your progress and measures success

An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.

By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.  

Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.

• 14. Your business plan is an asset if you ever want to sell

Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale. 

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• Writing your business plan

By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one. 

Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools and business plan templates out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• 6. You’ll make big spending decisions with confidence
• 7. You’re more likely to catch critical cash flow challenges early

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Business planning

Purposes of business plans.

In simple terms, a business plan is a guide that details what the business wants to achieve and how it is going to do this [1] . Business plans are developed for both internal and external purposes. Internally, entrepreneurs develop business plans to help put the pieces of their business together. The most common external purpose for a business plan is to raise capital.

Internal Purposes

The business plan is the road map for the development of the business because it:

• Defines the vision for the company
• Establishes the company’s strategy
• Describes how the strategy will be implemented
• Provides a framework for analysis of key issues
• Provides a plan for the development of the business
• Is a measurement and control tool
• Helps the entrepreneur to be realistic and to put theories to the test

External Purposes

The business plan is often the main method of describing a company to external audiences, such as potential sources for financing, and key personnel being recruited. It should assist outside parties to understand the current status of the company, its opportunities, and its needs for resources such as capital and personnel. It also provides the most complete source of information for valuation of the business. [2]

In the list above, one purpose is to ‘help the entrepreneur to be realistic and to put theories to the test’.

• Why do you think it is sometimes difficult for an entrepreneur to be realistic about putting their business idea into action?
• How do you think writing a business plan would help with this?

Post your thoughts in the discussion forum and comment on what others have said as appropriate.

• ↑ http://articles.bplans.com/what-is-a-business-plan/
• ↑ Reproduced from Chapter 5 – Business Planning, in Entrepreneurship and Innovation Toolkit, Lee A. Swanson, University of Saskatchewan, 2017, shared under Creative Commons Attribution-ShareAlike 4.0 International License

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Nine reasons why you need a business plan

Building a great business plan helps you plan, strategize and succeed. Presented by Chase for Business .

Making the decision to create a new business is an exciting yet stressful experience. Starting a business involves many tasks and obstacles, so it’s important to focus before you take action. A solid business plan can provide direction, help you attract investors and ensure you maintain momentum.

No matter what industry you plan on going into, a business plan is the first step for any successful enterprise. Building your business plan helps you figure out where you want your business to go and identify the necessary steps to get you there. This is a key document for your company to both guide your actions and track your progress.

What is the purpose of a business plan?

Think of a business plan like a roadmap. It enables you to solve problems and make key business decisions, such as marketing and competitive analysis, customer and market analysis and logistics and operations plans.

It can also help you organize your thoughts and goals, as well as give you a better idea of how your company will work. Good planning is often the difference between success and failure.

Here are nine reasons your company needs a business plan.

1. Prove your idea is viable

Through the process of writing a business plan, you can assess whether your company will be successful. Understanding market dynamics, as well as competitors, will help determine if your idea is viable.

This is also the time to develop financial projections for your business plan, like estimated startup costs, a profit and loss forecast, a break-even analysis and a cash flow statement . By taking time to investigate the viability of your idea, you can build goals and strategies to support your path to success.

A proper business plan proves to all interested parties—including potential investors, customers, employees, partners and most importantly yourself — that you are serious about your business.

2. Set important goals

As a business owner, the bulk of your time will mostly likely be spent managing day-to-day tasks. As a result, it might be hard to find time after you launch your business to set goals and milestones. Writing a business plan allows you to lay out significant goals for yourself ahead of time for three or even five years down the road. Create both short- and long-term business goals. 

3. Reduce potential risks

Prevent your business from falling victim to unexpected dangers by researching before you break ground. A business plan opens your eyes to potential risks that your business could face. Don’t be afraid to ask yourself the hard questions that may need research and analysis to answer. This is also good practice in how your business would actually manage issues when they arise. Incorporate a contingency plan that identifies risks and how you would respond to them effectively.

The most common reasons businesses fail include:

• Lack of capital
• Lack of market impact or need
• Unresearched pricing (too high or low)
• Explosive growth that drains all your capital
• Stiff competition

Lack of capital is the most prevalent reason why businesses fail. To best alleviate this problem, take time to determine how your business will generate revenue. Build a comprehensive model to help mitigate future risks and long-term pain points. This can be turned into a tool to manage growth and expansion.

4. Secure investments

Whether you’re planning to apply for an SBA loan , build a relationship with angel investors or seek venture capital funding, you need more than just an elevator pitch to get funding. All credible investors will want to review your business plan. Although investors will focus on the financial aspects of the plan, they will also want to see if you’ve spent time researching your industry, developed a viable product or service and created a strong marketing strategy.

While building your business plan, think about how much raised capital you need to get your idea off the ground. Determine exactly how much funding you’ll need and what you will use it for. This is essential for raising and employing capital.

5. Allot resources and plan purchases

You will have many investments to make at the launch of your business, such as product and services development, new technology, hiring, operations, sales and marketing. Resource planning is an important part of your business plan. It gives you an idea of how much you’ll need to spend on resources and it ensures your business will manage those resources effectively.  

A business plan provides clarity about necessary assets and investment for each item. A good business plan can also determine when it is feasible to expand to a larger store or workspace.

In your plan, include research on new products and services, where you can buy reliable equipment and what technologies you may need. Allocate capital and plan how you’ll fund major purchases, such as with a Chase small business checking account or business credit card .

6. Build your team

From seasoned executives to skilled labor, a compelling business plan can help you attract top-tier talent, ideally inspiring management and employees long after hiring. Business plans include an overview of your executive team as well as the different roles you need filled immediately and further down the line.

Small businesses often employ specialized consultants, contractors and freelancers for individual tasks such as marketing, accounting and legal assistance. Sharing a business plan helps the larger team work collectively in the same direction. 

This will also come into play when you begin working with any new partners. As a new business, a potential partner may ask to see your business plan. Building partnerships takes time and money, and with a solid business plan you have the opportunity to attract and work with the type of partners your new business needs.

7. Share your vision 

When you start a business, it's easy to assume you'll be available to guide your team. A business plan helps your team and investors understand your vision for the company. Your plan will outline your goals and can help your team make decisions or take action on your behalf. Share your business plan with employees to align your full staff toward a collective goal or objective for the company.  Consider employee and stakeholder ownership as a compelling and motivating force. 

8. Develop a marketing strategy

A marketing strategy details how you will reach your customers and build brand awareness. The clearer your brand positioning is to investors, customers, partners and employees, the more successful your business will be.

Important questions to consider as you build your marketing strategy include:

• What industry segments are we pursuing?
• What is the value proposition of the products or services we plan to offer?
• Who are our customers?
• How will we retain our customers and keep them engaged with our products or services and marketing?
• What is our advertising budget?
• What price will we charge?
• What is the overall look and feel of our brand? What are our brand guidelines?
• Will we need to hire marketing experts to help us create our brand?
• Who are our competitors? What marketing strategies have worked (or not worked) for them?

With a thoughtful marketing strategy integrated into your business plan, your company goals are significantly more in reach.

9. Focus your energy

Your business plan determines which areas of your business to focus on while also avoiding possible distractions. It provides a roadmap for critical tradeoffs and resource allocation.

As a business owner, you will feel the urge to solve all of your internal and customers’ problems, but it is important to maintain focus. Keep your priorities at the top of your mind as you set off to build your company.

As a small business owner, writing a business plan should be one of your first priorities. Read our checklist for starting a business, and learn how to take your business from a plan to reality. When you’re ready to get started, talk with a Chase business banker to open a Chase business checking or savings account today.

For Informational/Educational Purposes Only: The views expressed in this article may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.

JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender, ©2023 JPMorgan Chase & Co

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• Business Planning

How to Write an Internal Business Plan

Written by Vinay Kevadiya

Published Aug. 17 2024 · 9 Min Read

Running a business is a lot of things starting from devising an overall strategy, keeping everyone on the same page, tracking employee performances, tracking who does what…

All this can quickly become overwhelming if you don’t have an organized guide. This is where an internal business plan comes into play. It acts as your operations’ backbone and a strategic blueprint that aligns teams, allocates resources, and drives growth.

But how do you create an internal business plan? How’s it different from a traditional business plan? In this guide, we’ll answer these questions and show a step-by-step process of crafting successful internal business plans.

What is an Internal Business Plan?

An internal business plan is a strategic roadmap designed for a company's internal use. Unlike traditional business plans focused on external stakeholders, it serves as a compass for internal operations, aligning teams, and setting clear goals.

This document outlines the company's vision, mission, and objectives, guiding decision-making, resource allocation, and performance evaluation. An internal business fosters a shared understanding of the company's direction—making it instrumental in achieving organizational success.

With that said, let’s also go over the difference between internal and external business plans for better understanding.

Internal vs. Traditional Business Plan

Internal business plans are designed for your internal use, guiding a company's operations and strategy. Conversely, traditional business plans are crafted to secure external funding or business partners.

Both external and internal business plans are essential as they serve different purposes. Internal plans drive operations, while traditional business plans secure external support.

The Purpose of Writing Internal Business Plans

Here are some reasons why an internal business plan is essential for your business planning:

Strategic alignment

Strategic alignment is about making sure everyone in your company is pulling in the same direction. It helps avoid wasted effort, improves decision-making, and boosts overall efficiency.

“In our company, the internal business plan is essential for guiding our strategic initiatives and growth. It ensures that our team is unified in its efforts and provides a clear framework for decision-making.

For instance, our plan identified the need to expand our product line, leading us to introduce new CBD wellness products that accounted for a 25% increase in sales last quarter.” says Alexander Brandrup, Neurogan Health

Just like it did for Alexander, an internal business plan will lay out the blueprint for your strategic alignment. It lays out your goals, strategies, and how different departments fit into the big picture. This ensures everyone understands their role in achieving the company's objectives.

Performance measurement

Performance measurement is all about tracking how well your company is doing. It helps you figure out what's working and what's not. Internal business plans help you set clear targets (called KPIs) for different areas of your business.

By tracking these numbers over time, you can see if you're on the right track, celebrate successes, and identify areas that need improvement.

Resource allocation

Your internal business plan is like a roadmap for this process. It outlines your company's objectives, so you can see which projects align with your resources and if you need more of the same.

Risk mitigation

An internal business plan helps you spot potential problems before they become big issues. By identifying risks upfront, you can create backup (contingency) plans to keep your business steady even when things get tough.

For example, having an internal business plan helped navigate Design Rush’s (a B2B agency) time during the pandemic. “An internal business plan helped identify potential risks and prepare contingency plans, fortifying our resilience during the pandemic.” — Gianluca Ferruggia, Design Rush

Easy Steps to Write Your Internal Business Plan

Here’s how you can create a simple internal business plan today:

1. Define the purpose

A good internal business plan starts with an identified purpose of your plan. Why do you intend to create this plan? What value would it provide and to whom?

For example, is it to guide the team through a new initiative, to improve resource allocation, or to streamline operations?

When you know the purpose it’s easier to decide what goes into the internal plan.

2. Start with an executive summary

Even though it’s the first section of your business plan , write the executive summary last, after finalizing the rest of the internal plan. So instead of filling it in, just leave out some space for it.

This section should briefly summarize the key aspects of your company’s strategy, internal operations, and goals. Sort of like a snapshot of your overall plan that helps all internal stakeholders quickly realize the journey they’re on as a company.

3. Value proposition

Next, you want to include a value proposition, a one-sentence summary of your business. This reveals what value your business aims to provide and to whom.

This works as a reminder to your team about the main purpose of your company.

4. Define the problem and your genius solution

Once you’ve revealed your value proposition, you must discuss it in detail with your internal stakeholders. They need to clearly understand what your products and services are and what issues your business intends to resolve with them.

This way, everyone on your team is clear about how every activity they do is in the end to solve this specific problem.

5. Conduct market analysis

Next, in internal business planning, you need to conduct a market analysis to obtain vital information like:

• Industry overview: Here you’ll describe the current state of your industry, including market trends and potential challenges.
• Target market: Clearly define your target audience, including demographics, preferences, and buying behaviors.
• Competitive landscape: Analyze your main competitors, focusing on their strengths and weaknesses and how you compare.

Including such data helps ensure that marketing campaigns are focused and that your team knows who you’re trying to reach and your competitive advantages.

6. Develop marketing and sales activities

Now that you’ve determined the problem, and its solution, and done a thorough market analysis, it’s time you use the data to develop marketing and sales strategies.

You can start by creating a marketing plan. Identifying marketing strategies that align with your target market and audience, including online and offline tactics.

Then move on to your sales strategy by defining how you’ll sell your goods or services and through what medium. You also want to include other crucial details in your internal plan like pricing strategy and customer acquisition tactics.

Lastly, focus on customer relationship management. Outline how you’ll manage and nurture customer relationships to boost retention.

7. Outline the operational activities

With the marketing and sales activities and overall business purpose all clear and defined, start outlining how the internal operations or day-to-day activities will look like for your company. This will include key processes, roles, and responsibilities.

Don’t forget to mention the specific tools, technology, and systems that support your day-to-day operations.

8. Set milestones and KPIs

Now it’s time to set realistic milestones and objectives for your team for the upcoming months. This will help:

• You track business performance efficiently
• Your team focus on the most what’s important
• Tie your milestone to KPIs

For example, the milestone of "product launch" might have associated KPIs such as "first-week sales," "customer acquisition cost," and "customer satisfaction rating."

9. Create a financial plan

You’d think financial plans are only for the fundraising process, but that’s not true.

You have to share the set expense budget, profit and loss statement, balance sheet, and cash flow forecast to guide your finance and accounting team.

You have to share the sales forecast with your sales team and the marketing budgeting with the marketing department.

Moreover, you want to include the break-even analysis so that your team learns at which point the business will become profitable (essential for morale).

Clearly, financial predictions and budgets are crucial for internal operations as well.

10. Detail the management and organization

Internal operations can’t succeed unless you make it clear who does what and who reports to whom. So a good internal business plan includes an organizational chart that outlines roles and reporting lines.

11. Plan for regular reviews

The business world is dynamic. So you need regular reviews to align the marketing strategy with current market conditions, customer needs, and internal capabilities.

As a business owner, you can set up a monthly plan review meeting to keep a constant check and help employees stay on track. Don’t worry, you can host reviews quarterly, semi-annually, or annually depending on your company’s requirements.

Outline the steps involved in reviewing, including data collection, analysis, and discussion. Don’t forget to develop a communication plan as well to share review results and updates with relevant stakeholders.

That’s about it. All that’s left to do is distribute the plan and implement it.

Well-crafted internal business plans are a roadmap for success. They align teams, set clear business goals, and provide a strategic framework for growth. By clearly defining objectives, analyzing the market, and outlining financial information, businesses can make informed decisions and achieve their desired outcomes as a team.

If you want to simplify the business plan writing process, try Bizplanr . It will help you design internal business plans in minutes for free. Simply answer a few simple questions and your business plan will be ready!

Get Your Business Plan Ready In Minutes

Answer a few questions, and AI will generate a detailed business plan.

Frequently Asked Questions

How does an internal business plan differ from an external business plan?

An internal business plan focuses on detailed strategies and operations for company management, while an external business plan is designed to attract investors, partners, or lenders by showcasing the company's goals, financial projections, and overall viability.

What tools and resources can help in writing an internal business plan?

A tool like Bizplanr.ai can help you draft your internal business plan with ease. You can also use its business plan template to customize and create one.

How detailed should an internal business plan be?

An internal business plan should be detailed enough to guide daily operations and strategic decision-making, including specific goals, timelines, financial plan, and resource allocations, but flexible enough to adapt to changes.

How can I ensure that my internal business plan is realistic and achievable?

To ensure your internal business idea is realistic and achievable, base it on accurate data, set clear and measurable goals, as well as involve key stakeholders in the planning process to validate assumptions and resource allocations.

As the founder and CEO of Upmetrics, Vinay Kevadiya has over 12 years of experience in business planning. He provides valuable insights to help entrepreneurs build and manage successful business plans.

Follow Vinay Kevadiya

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Writing an internal business plan

Beyond external, there are many internal reasons to write a business plan to support business success.

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While all of the reasons for writing a business plan are usually described as external, such as landing investors or recruiting quality talent – there are plenty of reasons to make an internal business plan as well. Generally, such a plan is there to act as a roadmap for the company’s success; something to remind everyone of the joint vision they are working towards.

Business plan writing tips & advice for the avid entrepreneur

Why is a business plan important and who is it for, can a business plan improve your organisational performance, why make an internal business plan.

Generally, many large businesses utilise internal business plans to make sure that the overall company vision is not compromised and easily communicated to everyone. That sort of strategic direction is not easy to achieve solely by meetings and memos, especially if sprawling corporate structures are involved. Plus, the information laid out in such ways is always prone to change; which is why business plans are there to provide a more long-term, future-oriented set of values and motives.

Apart from that, as you will see in detail below; internal business plans are less focused on the financial aspect of running a business, at least when everything is functioning correctly in that regard. Instead, such plans are more often used to establish a set of metrics that the staff can use to see how hard they are working. Additionally, they are there to enable better performance management by upper management; ensuring that everyone realised what they need to do for their job performance not to suffer, and precisely what is expected of them in the workplace.

Overall, internal business plans allow for a higher degree of control and coordination among different levels of management and employees. Not only is communication vastly improved by the elimination of superfluous dilemmas; but the staff is also better able to voice their pleasure or concerns about where the company is going in the commercial and cultural sense. Such a plan is as much suited for staff empowerment as it is for better management .

Mission statement

If vision is about imagining and looking forward; your mission is very much about the present, and doing. In other words – you want to focus your mission statement on the practical, everyday actions that company employees can undertake to itch closer to the future forecast of the vision statement. So, make sure to lay out what kind of behaviours and actions must be done for your business to get where you want it to go.

For customer-oriented companies, the mission statement can also contain a succinct description of what the most average target consumer is for the company; something all employees will keep in mind. And then, tackle the public image of your company; what it is currently, what you want it to become, and what everyone needs to do to attain that image. That will bring a unique definition to your business in the eyes of the public, and give everyone a sense of clarity about what kind of collective they’re in.

If you want to bring even more clarity to your business, the only thing you can do is provide more specific desired outcomes for the future of your business. With that in mind, make sure to use your internal business plan to lay out a clear set of objectives for everyone who has access to it. Once you manage that, you will have a perfect guiding light to keep everyone involved headed in the proper direction.

Unlike the broader mission statement, your objectives should be less long-term and much more detail-oriented and specific. For example, you may want to choose a realistic revenue target and a reasonable date for hitting it. Then, think of what all of your employees need to do to manage this. And give them a set of objectives all of them are capable of understanding and working towards. Naturally, these must be in perfect alignment with your mission and vision, for the business plan to give a meaningful structure to your company culture .

Strategies are more general activities that your management must employ to reach the desired objectives. You want to make sure these are spelt out clearly, but they can be pretty broad in terms of scope. Remember – these will act as a bridge between your objectives and the practical actions that must be taken.

If you’re looking for examples, think in terms of detailed quarterly or monthly reviews, and better measurements of certain metrics to reach specific objectives. For example, most of your employees may need to work on revamping the quality control process at all production stages.

Action plans

Action plans are a part of the internal business plan; usually there to tie in a particular activity from a strategy with your set of objectives. Let’s clear this up a bit. Actions could mean the creation of a new product or a more modern marketing plan. It could also be the process of developing or investing in new systems. That is something you want to plan out annually and with strict deadlines.

Sustainability

Before you round out your internal business plan, there’s one crucial question you need to ask yourself. Namely, is your company capable of doing everything that this plan sets out to do? After all, with so many different management plans that are a part of this overall plan, it may all seem a bit overly ambitious. And while it sometimes just seems a bit confusing until everyone gets more comfortable with it; in many situations, an internal business plan may be too lofty to be realistic.

There’s no shame in making amendments to your internal business plan after it’s been circulated the company. After all, some things may prove to be not feasible after a couple of months. Or, an idea which seemed great to you, in the beginning, is now looking pretty outdated.

On the other hand, you don’t want to throw things out of the plan whenever they prove difficult to do; that’s also a recipe for disaster. Finding that middle ground between following an intricate, but realistic plan, and changing one that’s just not viable – that is something only a truly great manager is capable of.

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Written by Jesse Sumrak | May 14, 2023

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Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.

Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.

Bah. Sounds like homework, right?

Yes. Yes, it does.

However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.

Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.

Table of Contents

What Is a Business Plan?

Tips to Make Your Small Business Plan Ironclad

How to Write a Business Plan in 6 Steps

Startup Business Plan Template

Business Plan Examples

Work on Making Your Business Plan

How to Write a Business Plan FAQs

What is a business plan why do you desperately need one.

A business plan is a roadmap that outlines:

• Who your business is, what it does, and who it serves
• Where your business is now
• Where you want it to go
• How you’re going to make it happen
• What might stop you from taking your business from Point A to Point B
• How you’ll overcome the predicted obstacles

While it’s not required when starting a business, having a business plan is helpful for a few reasons:

• Secure a Bank Loan: Before approving you for a business loan, banks will want to see that your business is legitimate and can repay the loan. They want to know how you’re going to use the loan and how you’ll make monthly payments on your debt. Lenders want to see a sound business strategy that doesn’t end in loan default.
• Win Over Investors: Like lenders, investors want to know they’re going to make a return on their investment. They need to see your business plan to have the confidence to hand you money.
• Stay Focused: It’s easy to get lost chasing the next big thing. Your business plan keeps you on track and focused on the big picture. Your business plan can prevent you from wasting time and resources on something that isn’t aligned with your business goals.

Beyond the reasoning, let’s look at what the data says:

• Simply writing a business plan can boost your average annual growth by 30%
• Entrepreneurs who create a formal business plan are 16% more likely to succeed than those who don’t
• A study looking at 65 fast-growth companies found that 71% had small business plans
• The process and output of creating a business plan have shown to improve business performance

Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.

Don’t Skip: Business Startup Costs Checklist

Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:

Be Professional and Legit

You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.

Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.

If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.

Know Your Audience

Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.

Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.

Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.

Invest Time Researching

You might not have answers to all the sections you should include in your business plan. Don’t skip over these!

Your audience will want:

• Detailed information about your customers
• Numbers and solid math to back up your financial claims and estimates
• Deep insights about your competitors and potential threats
• Data to support market opportunities and strategy

Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.

Stay Realistic

Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.

The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.

How to Write a Business Plan—6 Essential Elements

Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:

• Executive Summary
• Business Overview
• Products and Services
• Market Analysis
• Competitive Analysis
• Financial Strategy

Below, we’ll break down each of these sections in more detail.

1. Executive Summary

While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.

Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.

Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.

2. Business Overview

In this section, you can dive deeper into the elements of your business, including answering:

• What’s your business structure? Sole proprietorship, LLC, corporation, etc.
• Where is it located?
• Who owns the business? Does it have employees?
• What problem does it solve, and how?
• What’s your mission statement? Your mission statement briefly describes why you are in business. To write a proper mission statement, brainstorm your business’s core values and who you serve.

Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:

• Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
• Tesla: To accelerate the world’s transition to sustainable energy.
• InvisionApp : Question Assumptions. Think Deeply. Iterate as a Lifestyle. Details, Details. Design is Everywhere. Integrity.
• TED : Spread ideas.
• Warby Parker : To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.

3. Products and Services

As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.

For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.

You’ll need to include:

• What services you sell: Describe the services you provide and how these will help your target audience.
• What products you sell: Describe your products (and types if applicable) and how they will solve a need for your target and provide value.
• How much you charge: If you’re selling services, will you charge hourly, per project, retainer, or a mixture of all of these? If you’re selling products, what are the price ranges?

4. Market Analysis

Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.

This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.

Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.

The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.

If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:

FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.

5. Competitive Analysis

Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.

The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.

6. Financial Strategy

Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.

This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?

Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:

• Balance sheet: This includes your assets, liabilities, and equity.
• Profit & Loss (P&L) statement: This details your income and expenses over a given period.
• Cash flow statement: Similar to the P&L, this one will show all cash flowing into and out of the business each month.

It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?

Read More: 16 Financial Concepts Every Entrepreneur Needs to Know

Startup Business Plan Template (Copy/Paste Outline)

Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.

Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.

Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?

Products and Services Detail the products and services you offer. How do they work? What do you charge?

Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.

Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.

Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.

5 Frame-Worthy Business Plan Examples

Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:

• SBA Wooden Grain Toy Company
• SBA We Can Do It Consulting
• OrcaSmart Business Plan Sample
• Plum Business Plan Template
• PandaDoc Free Business Plan Templates

Get to Work on Making Your Business Plan

If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.

Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.

Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).

Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.

That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.

Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.

Keep Learning: New Product Development Process in 8 Easy Steps

What financial information should be included in a business plan?

Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.

What are some common mistakes to avoid when writing a business plan?

The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.

Who should review my business plan before I submit it?

Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.

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About Jesse Sumrak

Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.

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• How to Write a Good Business Plan?

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There are tons of articles and books on how to write a good business plan, but still I get a lot of questions on how to write a business plan effectively.

© Shutterstock.com | T. L. Furrer

In this article I’ll show you (1) what a business plan is, (2) why, when and for whom to write the business plan, and (3) the elements of a good business plan .

WHAT IS A BUSINESS PLAN

A business plan is a 30-40 pages long description of how you want to build your company . In the business plan you want to explain what customers you want to target via which marketing channels, what makes you different from competitors, who the management team is, how you are going to make a profit, and what the milestones are for achieving your business plan. So, in a nutshell a good business plan follows the following story.

WHY, WHEN AND FOR WHOM

Why make the effort and writing 30-40 pages when you could focus on product development or sales? There are several reasons why with some business models you should only write an abbreviated version of a business plan (we will cover this in another post).

INTERNAL REASONS

• Generally, while writing a business plan you and your co-founders will think through your business model in-depth . By doing this you will increase the probability to find business model breakers (= factors that will lead your current model fail), so you can find ways to adjust your business model.
• The second reason is that when you write a business plan, you set yourself a guideline which to follow. This will increase your focus and get things done mentality as you target your milestones.

EXTERNAL REASONS

• Another reason for writing a business plan is that most of investors (especially   venture capitalist and banks )   will ask for a business plan   before they will make an investment decision.

Most people start working on a rough business plan too late. We recommend that you write a business plan when you have a good business idea . It is totally fine to have a first business plan covering the key business model drivers and milestones you want to achieve on 3-5 pages. Once you learn what customers really want and how to profit then you increase the detail of your business plan (e.g. start with rough marketing assumptions and later distinguish between marketing channels, customer segments, products and regions). Now, you might need some funding because you are not profitable yet or because you want to finance a larger expansion (more products, more countries). For this, you will need to write a very detailed business plan which will be the basis for investors to make their decision to invest in your business or not. This fully fledged business plan is what we are talking about in this article.

The external purpose of the business plan is mainly to receive funding (equity or debt), thus the potential addressees of the business plan can be:

• Equity investors like business angels and venture capitalists
• Debt investors like banks

It is important to frame the information in the business plan to the needs and investment profile of the investors. For pitching equity investors you should focus on the disruptive factors and upside potential of your business while for debt investors you should clearly state the risks and position yourself as a risk minimizer (I mean, your business has no risk it cannot handle, hasn’t it 🙂 ).

ELEMENTS OF A BUSINESS PLAN

There is no perfect blueprint for a good business plan, but the following elements are definitely part of a good business plan. When you write your business plan you should focus on quality (facts, crisp, simple English), not quantity. As a starting point you can use this or that free business plan template.

This means you’ll have to be very specific about your business model , because investors get hundreds of business plans every month, so make sure your business plan stands out from the crowd. We recommend, you ask your friends and family for input on how to improve your business plan. After each investor meeting, use their feedback for sharpending your pitch and business plan. A good quality business plan will increase your chances of getting funded.

1 EXECUTIVE SUMMARY

The executive summary should summarize the main messages from the whole business plan, while the further elements of the business plan should provide the supporting facts for these messages. The executive summary typically is 1-2 pages long.

2 MANAGEMENT

In this section you describe the management team and other key people attached to your business (e.g. board of directors, key employees). A potential is mostly interested in what specific industry expertise, technical skills and business network you have in order to drive the business growth. One key skill, I find most people overlook, is that management should master the skill of allocating capital in the most efficient way.

Furthermore, you should show that your team is complementary meaning that the management team should have different backgrounds; this helps in making hard decisions as the whole team sees the problem from different perspectives.

3 PROBLEM, MARKET, AND COMPETITORS

First, you need to specify what problem you would like to solve with your business. Be as specific as possible. The more precise you describe the problem, the better your solution will be and thereby you will increase your chances of success.

• Bad example: People have cancer.
• Good example: People have cancer and I know why. I found the biological reason for the existence of cancer in chromosome 0815 which is driven by malnutrition in the early childhood mainly caused by visiting McDonalds too often [I totally made this up, I don’t have a biology background 🙂 ]

Then, you need to estimate the current and future market size for solving this problem either via market research reports or a back on the envelope calculation .

COMPETITORS

Lastly, what competitors are out there and how do they tackle this problem? A lost of people think, they don’t have competitors. Let me assure you, you have competitors. Either you have competitors that offer a similar product or at least you will competitors who try to solve the customer problem in another way .

• Example: Imagine you want to sell a super new type of juice which nobody sells. Cool, you don’t have competitors! WRONG! Every company that sells any type of drinks (e.g. water, juice, tea, coffee) is competing for satisfying the thirst and taste of customers.

Show the investors in your business plan how you will position your business in comparison to the competition.

Here you describe how your product or service solves the problem. Make sure you describe why your product or service solves the problem in a more effective or efficient way, so you will have a value proposition over competitors.

Your business plan should also specify the customer benefits of your product (making something faster, cheaper, more reliable, more effective, more beautiful). This discussion will later help you to pitch your product to potential customers.

Briefly explain how you source and produce the product and how this might translate into a competitive advantage. If you have any sourcing or production related partnerships , then state them here. This might also indicate some traction.

5 MARKETING AND SALES

You have your product defined and why customers should buy your product.

Now, you need to show which advertising and sales channels you want to use for approaching potential customers. You need to show which channels have the lowest customer acquisition cost , amount of customers and product perferences of customers.

Generally, you can advertize your product via these advertising channels:

• Offline marketing ; using guerilla marketing techniques , advertising on public transport, radio and television advertising.
• Print advertising ; putting your advertising on newspapers or magazines
• Search engine marketing , you bid for key words on google, bing and yahoo.
• Display advertising ; you buy ad impressions of larger websites, so that customers can click through to your website.
• Search engine optimization ; your website gets visitors from google & co. by ranking high for specific key words (e.g. business plan, greatest entrepreneur ever, startups)
• Retargeting; you try to retarget visitors that have visited your website by showing them specific ads on selected other websites.
• Paid social media ; you advertize your product on Facebook, Twitter, Linkedin and co.

Furthermore, your business plan should state whether you already have some signed marketing or sales partnerships . One technique, I like a lot, is the piggy back. When you have developed a specific product and you can piggy back on a larger distributor to sell your product to thousands of people. Example: If you have developed an amazing web application for entreprise resource planning, then it might make sense to talk to companies like Cisco or HP for promoting your product by having a revenue share agreement with the distributor.

6 FINANCIAL PLAN

At least one member of your management team should understand the basics of accounting  so you can build a decent financial plan.

The financial plan should at least include a historical and forecasted income statement so that investors get a feeling for the revenue forecast, margin forecast, and overhead forecast. If you are awesome 🙂 , then build an integrated financial model that interlinks the income statement, balance sheet and cash flow statement.

Next, you should show investors why your business is a good investment. Basically, an investor will assess the risk and return of investing in your business relative to other investment opportunities he might have. I recommend, you help the investor by calculating the IRR fo your business and identifying the mayor business model risks and measures how you tackle those risks.

Lastly, the investor wants to know how much funding you need and for what (e.g. marketing, HR, product development, having a party 🙂 ) you plan to spend it.

7 ROADMAP AND MILESTONES

If you don’t know where you wanna go, then your chances of getting there are quite low! Therefore, you should specify what actions you want to perform and what objectives you want to achieve over a specific period of time; this is called a milestones plan .

The milestones plan should be categorized by business segments such as product development, marketing, HR, and finance and include the funding need for each milestone.

We will look at business plans in more detail in future posts. This article should give you a good introduction what a business plan is and what things you need to consider for writing a good business plan.

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What Is a Business Plan?

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

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

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

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

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

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

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

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

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

Harvard Business Review. " How to Write a Winning Business Plan ."

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

SCORE. " When and Why Should You Review Your Business Plan? "

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5 Reasons to Write a Business Plan There are any number of reasons why you need to create a business plan, including starting a business, seeking funding and more.

By Teresa Ciulla Dec 2, 2014

Opinions expressed by Entrepreneur contributors are their own.

In their 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 five reasons why someone would want to write a business plan and what they'll use it for.

Anybody beginning or extending a venture that will consume significant resources of money, energy or time and that's expected to return a profit should take the time to draft some kind of business plan.

But there are many reasons to write a business plan, including the following five:

1. You want to start a business.

The classic business plan writer is an entrepreneur seeking funds to help start a new venture. Many great companies had their starts in the form of a plan that was used to convince investors to put up the capital necessary to get them under way.

2. You own an established firm and are seeking help.

Many business plans are written by and for companies that are long past the startup stage but also well short of large-corporation status. These middle-stage enterprises may draft plans to help them find funding for growth. They may feel the need for a written plan to help manage an already rapidly growing business and to convey the mission and prospects of the business to customers, suppliers or other interested parties. A business plan can address the next stage in the life process of a business.

3. You need to determine your objectives.

There are so many options when it comes to starting a business, including the size, location, and, of course, the reason for existence. You'll be able to determine all of these and so many more aspects of business with the help of your business plan. It forces you to think through all of the areas that form the main concept to the smallest details. This way, you don't find yourself remembering at the last minute that your website still isn't developed or that you still have most of your inventory in a warehouse and no way to ship it.

4. You're trying to predict the future.

It may seem dishonest to say that a business plan can't predict the future. What are all those projections and forecasts for if they're not attempts to predict the future? The fact is, however, no projection or forecast is really a hard-and-fast prediction of the future. The best you can do is have a plan in which you logically and systematically attempt to show what will happen if a particular scenario occurs. You'll use your research, sales forecasts, market trends and competitive analysis to make well thought-out predictions of how you see your business developing if you're able to follow a specified course. To some extent, you can create your future rather than simply trying to predict it by the decisions you make. For example, you may not have a multimillion-dollar business in ten years if you're trying to start and run a small family business. Your decision on growth would therefore factor into your predictions and the outcome.

5. You want to use it to raise all the money you'll need.

A business plan can't guarantee that you'll raise all the money you need at any given time, especially during the startup phase. Even if you're successful in finding an investor, odds are good you won't get quite what you asked for. There may be a big difference in what you have to give up, such as majority ownership or control, to get the funds. Or you may be able to make minor adjustments if you cannot snare as large a chunk of cash as you want.

In a sense, a business plan used for seeking funding is part of a negotiation taking place between you and your prospective financial backers. The part of the plan where you describe your financial needs can be considered your opening bid in this negotiation. In a way, a business plan is an excellent opening bid -- it's definite, comprehensive and clear.

But you know what happens to bids in negotiations: They get whittled away, the terms get changed, and, sometimes, the whole negotiation breaks down under the force of an ultimatum from one of the parties involved. Does this mean you should ask for a good deal more money than you actually need in your plan? Actually, that may not be the best strategy either. Investors who see a lot of plans are going to notice if you're asking for way too much money. Such a move stands a good chance of alienating those who might otherwise be enthusiastic backers of your plan. It's probably a better idea to ask for a little more than you think you can live with, plus slightly better terms than you really expect.

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How to Create an Internal Business Plan for a New Company Initiative

It is important to put together a complete, comprehensive internal business plan for a few reasons.

Business plans for start-up companies have become mainstays in the business world. But more and more company initiatives and projects have begun to require business plans as a way of validating prudent investments and company spend as maturing businesses look for innovation within to drive future revenue growth. A time may come in a business or a division when you have a new idea or product you believe will equal big revenue for the company, but how do you convey your message to the larger organization? As the world turns towards innovation and technology to drive growth in this mature economy, creating an internal business plan is becoming more and more commonplace, if not a necessity.

If you have a good working relationship with your executive team, business ideas should not be popping up out of the blue. Instead, you should have a platform for discussion in either staff meetings or one-on-one sessions with the executives. However, it is important to put together a complete, comprehensive internal business plan for a few reasons:

• It shows that you have your stuff together and can be organized and methodical about your plan.
• You will need to evangelize your new plan quickly and succinctly throughout the organization, and a detailed business plan is the most effective way to disseminate information.

Here are a few suggestions for inclusion in your business to improve the probability of gaining approval:

Executive Summary

The Executive Summary may be the most important part of the internal business plan as it cements the audience’s first impression of the project. This may be the only page many executives have time to read and discuss, so make sure it tells the story in a summarized manner. Style, visualization, and financial accuracy are all important aspect of this page.

Questions to ask and answer include:

• What is the idea?
• Where did it come from?
• How much to you believe its worth?
• What is the duration of investment?
• What is the financial impact?
• What is the mechanism we need to enact and unlock this new revenue stream?
• How does this project tie into and/or complement the overall strategy for the business and any other growth initiatives? (It is important to see how this product or service will become an integral part of the organization for years to come and not a one-off fad or an ill-conceived idea.)

It is very important to lay out your marketing strategy, as this will be the main focus point for management in understanding how realistic it will be to achieve your results. First, you need to identify your target market, whether it be a specific demographic or fanbase or creating a new segment. You will need to be very specific about your methods of attracting your target customers and the message you are going to represent to the overall market. If you are tapping into a new market, how will you get your message out there? If you are stealing share or competing against another rival, what will be your differentiation to gain share?

Without the right combination of message and means of delivering the message, even truly superior new products may have trouble gaining traction in the marketplace. If you can show that you already have customers lined up ready to purchase your products or services, this makes your case more convincing.

Management Team

Executives want to support new projects and new ideas, but they need to be confident in the people you put in charge. If you, as the author of the internal business plan, will not be directly operating the new product or service, but someone else on your team will be the main contact, you want to make sure they are a good fit for the project.

The team structure has to go beyond just your normal, everyday team configuration. It must show how each team member’s background and accomplishments contribute essential elements needed to succeed with this new venture. The project may involve more than one department, so you will want to show that you put time and effort into determining the team and define the responsibilities of each member. Make sure that you have a diverse group of people that have the availability to dedicate time to the project with a good mix of senior and junior employees.

Financial Projections

As the executive team decides whether they are going to approve of the investment in this new product or service, they have to consider whether they are going to get a sufficient return on their investment. Not only do they have to consider ROI, but in many companies where resources are limited and staffing up can be a political nightmare, business units also have to consider opportunity costs or tradeoffs related to moving individuals and not having them concentrate on already productive and proven products and services.

The financial projections provide clues about how well thought out the new products and services are as well as their financial viability. The executive team will look for whether the team has presented a reasonable forecast for revenue and profit growth that is both aggressive, but realistic for the business unit. When they see projections that seem unattainable, the project immediately loses credibility. Executive teams also want to see whether the management team backed up the projections with sound assumptions based on hard data obtained from industry sources – or were the projections simply guesswork. Financial projections in a business plan do not need to be voluminous or excessively complex. However, they do need to be clear and reasonable while being exciting from a ROI standpoint.

Getting Support for Your Internal Business Plan

While you may include additional information in your business plan, it is important to keep it short and succinct. It is also important that you dedicate the correct resources to develop, publish, and present this business plan. Our team at 8020 Consulting has experience putting together business plans for project and initiatives. You can contact us to learn more .

If you’d like to learn more about internal momentum toward business goals, we invite you to download our operational review program guide . It offers insights into how to organize meetings and set roles to encourage organizational traction:

About the Author

Lester has over 15 years of professional finance experience in strategic planning, forecasting and budgeting, financial analysis, and business evaluation. Prior to joining 8020 Consulting, Lester was the Director of Business Planning and Analysis at Warner Bros. and had previously worked as a Senior Manager of Retail Analysis and Manager of Finance for The Walt Disney Company. Additionally, Lester has held positions at Thomson Reuters and Public Financial Management. In his career, Lester also operated as the Chief Financial Officer for a consumer goods start-up company, where he oversaw the Accounting, Finance, Operations and HR functions. Lester’s expertise centers around FP&A, budgeting and forecasting, financial modeling, cause of change analysis, consolidation, industry analysis, and project management. Lester holds a Bachelor of Arts in Economics from Stanford University, and an MBA in Corporate Strategy and Finance from The University of Michigan, Ross School of Business.

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• Starting a business

Why internal business plans are essential to have

Internal business plans are essential for the success of any business. An internal business plan is similar to an external business plan in its overall structure. However, external business plans are designed to secure funding for a business and are presented to banks, investors, and other lending institutions. They contain high levels of detail about financial projections, customer demographics, growth strategies, and much more.

Internal Business Plan Must-Haves

Final thoughts.

Internal business plans touch on many of the same points, but all the number crunching isn’t totally necessary. Your company’s internal business plan should be structured more as a reference document for employees. It’s different from an employee handbook because it’s not a procedural manual on work expectations.

An internal business plan is more of a guide on how the company will work together to achieve its goals. Your internal business plan should be an iterative document, meaning it changes and evolves as your company grows. It’s crucial to revisit these types of business plans frequently to ensure that it’s living up to its design. If not, changes must either be made to the internal business plan itself or the goals it’s trying to help achieve must be adjusted to become more attainable.

Internal Business plans can have dozens of sections covering whatever topics you feel are vital for your company. However, here are some areas that are commonly covered in almost every internal business plan.

Mission and Vision Statements

Mission and vision statements are found in both external and internal business plans and many other company documents. The vision statement is the ultimate reason you have a business, and the mission statement is the actionable strategy it takes to be successful.

Specific and Attainable Goals

Business productivity can be measured by evaluating the goals outlined in your internal business plan. These goals should be clear, measurable, and broken down into different business segments. For example, what are your long-term marketing goals, and what are the short-term benchmarks your company must reach to achieve them? This is a prime example of why you must revisit internal business plans regularly. Each set of goals for every business segment should execute your mission and vision statements.

The strategies portion of your internal business plan lists out a specific method to achieve the goals mentioned above and benchmarks. You should formulate customized strategies for every business segment. Although some goals may be the same, no two segment’s methods should be the same. For instance, your company’s sales strategy will not be the same as your customer service department. However, they may share goals like “a streamlined and overall enjoyable customer experience.”

Systems and Processes

The systems and processes section of your internal business plan supports both the business goals and the strategy. Suppose you have hard-lined expectations of your leadership or other employees. It should be specified here. You could, for example, clarify that employee reviews by management will take place bi-annually.

This section can also list every role at the company and its scope of work. Internal operating systems and how departments should interact should also be made clear in this section. Much of this information would also be found in an employee handbook, but you can explain why a system or process exists in the internal business plan.

You can create many different business plans for your business, but an internal business plan is a cornerstone for how your company operates. Your internal business plan is a living document and should be reviewed regularly to ensure your company stays true to its original purpose. It’s essential to ensuring that things within the business stay consistent.

Suppose you find that your business isn’t living up to its goals in the internal plan. In that case, it’s better to examine why it’s not performing and try to fix that instead of drastically altering the original plan. It should be a barometer of success, and if you constantly change the plan, you have no standards to go by.

Factors such as changes in ownership, external market factors, and other business mergers or partnerships can be reasons for altering an internal business plan. However, the most successful companies always try to keep their initial vision and mission statements intact.

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Free Internal Business Proposal Guide: Tips & Sample

Table of Contents

As an employee, you may encounter situations where you need to propose an idea to your manager or colleagues. In such cases, you may need to write an internal proposal. An internal business proposal outlines a plan or idea for improving a process, service, or product within an organization. In this blog post, we will discuss an internal business proposal, its elements, and the steps to write an effective one. We also include a proposal example to get you started.

What is an Internal Business Proposal?

An internal proposal is a document that presents an idea, plan, or solution to an existing problem within an organization . It is typically written by an employee looking to create organizational change or solve a problem. The document is submitted to managers or other organization stakeholders for approval or support. An internal proposal should be concise, clear, and understandable. This is mainly because the document might be presented to people who may not understand technical language.

Reasons for Writing an Internal Proposal

There are several reasons why an employee or team may need to write an internal proposal .  Some of the most common reasons include the following:

1. To propose a new product or service

You may need to write an internal proposal to propose a new product or service that the organization can offer its customers.

2. To propose a process improvement

Another reason to write an internal proposal is to propose a process improvement that can streamline operations or increase organizational efficiency.

3. To propose a cost-saving measure

An internal proposal may be written to propose a cost-saving measure that can help the organization reduce its expenses.

4. To propose a policy change

An internal proposal may be written to propose a change in policy that can improve the organization’s operations or address a specific issue.

Elements of an Internal Business Proposal

An internal proposal should include the following elements:

• Executive summary : This is a brief overview of the proposal, including its objectives, benefits, and costs.
• Introduction : This section should provide context for the proposal and explain why it is important for the organization.
• Problem statement : This section should describe the problem or issue the proposal aims to solve.
• Solution : This section should provide details on the proposed solution, including the benefits and drawbacks and how it will be implemented.
• Implementation plan : This section should outline the steps that will be taken to implement the proposed solution, including timelines, resources required, and responsibilities.
• Budget : This section should provide a detailed budget for implementing the proposal, including costs for materials, labor, and other resources.
• Conclusion : This section should summarize the proposal and reiterate its benefits and importance to the organization.

How to Write an Internal Business Proposal

Writing an effective internal proposal can be challenging. To make the process easier, follow these steps:

1. Research and Develop your idea

Before you begin writing your proposal, clearly define the problem or issue. Conduct thorough research to identify potential solutions and determine their feasibility.  Develop a plan for implementing your solutions and how they can favorably impact your company. By taking the time to comprehend the specifics, you can identify possible problems earlier and avoid sending a half-baked proposal to the management.

2. Develop A Solid Introduction

The introduction of your proposal should set the pace for the rest of your writing. It should provide context for the proposal and tell the audience why your idea is essential. Your introduction should include a hook that will positively impact the audience and make them understand why your plan is crucial and significant. 

3. State the problem and offer a realistic solution.

Describe the problem or issue your proposal aims to solve. Briefly explain the solution you’ve researched, the benefits, and your expected results. Elaborate on the benefits of your proposed solution and how it can significantly impact the company. 

4. Explain the implementation plan.

Drill down to specifics and explain the steps for implementing your proposed solution. Provide timelines for the start and completion of the plan. Specify the resources required, and outline who will be responsible for daily tasks and deliverables.  Being as realistic as possible will help you avoid making commitments you know you won’t be able to meet. Unexpected events might interfere with your plans, but try to be realistic at the start of the project and plan for potential delays.

5. Present A Realistic Budget

Provide a detailed budget for implementing your proposed solution, including costs for materials, labor, and other resources. Break down the budget for each item, so the management can see exactly how much is required for each task. 

6.  Edit and revise

Edit and revise the proposal to ensure it is clear, concise, and easy to understand. No one takes you seriously if your proposal is filled with jumbled and incomprehensible text. Also, ensure that your document has consistent grammar, spelling, and sentence structure. 

7.  Present the proposal

Present the proposal to the appropriate stakeholders, providing them with the necessary information to make an informed decision.

8.  Follow up

Follow up with the stakeholders to address any questions or concerns they may have about the proposal.

Internal Business Proposal Example

Here is an internal proposal sample that focuses on implementing a new CRM system:

Executive Summary

This proposal seeks the improvement of the efficiency of our customer service department. We propose the implementation of a new customer relationship management (CRM) system.

Introduction

Our customer service department is responsible for providing high-quality service to customers. However, we have noticed that current processes and systems are causing delays and frustration for our customers and employees.  We believe that implementing a new CRM system will help improve our customer service processes and enhance the overall customer experience.

Problem Statement

Our current customer service processes are outdated and inefficient. Customer service representatives are using manual processes to log customer inquiries, causing delays and inaccuracies in our customer service responses.  Our customers are frustrated with the long wait times and inconsistent responses that they receive, negatively impacting our customer satisfaction ratings.

We propose implementing a new CRM system to automate our customer service processes. And provide our customer service representatives with real-time access to customer data. This will enable representatives to respond more quickly and accurately to customer inquiries, leading to a more positive customer experience.

The implementation of a new CRM system will have several benefits for our organization, including:

• Increased efficiency. Automating our customer service processes will reduce the time required to respond to customer inquiries, leading to increased efficiency and productivity.
• Improved accuracy : Real-time access to customer data will enable our representatives to respond more accurately to customer inquiries.
• Enhanced customer experience:  Faster response times and more accurate information will improve the overall customer experience, leading to higher customer satisfaction ratings.
• Reduced costs:  The new CRM system will eliminate the need for manual processes, leading to cost savings for the organization.

Implementation Plan

The implementation of the new CRM system will be done in three phases: 1 : Planning and preparation, including selecting the vendor and creating a project plan. 2 : System implementation and testing, including installing and configuring the new system. 3 : User training and rollout, including training customer service representatives and the rollout of the new system.

The total cost of the new CRM system is estimated to be $50,000, including vendor fees, hardware and software costs, and training expenses.  We believe that this investment will be quickly offset by the cost savings and increased efficiency that the new system will provide.

Implementing a new CRM system is essential for improving our customer service processes and overall customer experience. We hope you will consider our proposal and approve the necessary funding for this critical initiative.

Final Words

Writing an internal proposal requires careful planning, research, and attention to detail. It is important to clearly define the problem, propose a feasible solution, and outline an implementation plan and budget. By following these steps, you can increase your chances of gaining support and approval for your proposal. Use the internal proposal example in this guide to get started on your own proposal. Additionally, a writing assistant like INK can help you generate higher-quality proposals in less time . 

Abir Ghenaiet

Abir is a data analyst and researcher. Among her interests are artificial intelligence, machine learning, and natural language processing. As a humanitarian and educator, she actively supports women in tech and promotes diversity.

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Business Plan

• Tags: action plan , business cycle , business plan , capital , employees , goal , operations , shareholders , venture
• July 23, 2013

See Also: Value Drivers: Building Reliable Systems to Sustain the Growth of the Business Business Cycle Business Intelligence and Finance Make-or-Buy Business Decision Acquisition Capital Marketing Plan

Business Plan Definition

The business plan definition is the plan of action for business operations which has the goal of creating and growing sustainable profits . It is necessary for any business venture . A business plan has 3 main purposes: forming a strategic plan for future business initiatives, serving as a retrospective measure of the success of the business and it’s plans for expansion, and an explanation of the business for the purpose of raising capital. Business plans can vary greatly depending on creator, industry, operations , needs, phase in the business cycle , and more. Ultimately, the term business plan is used to describe a myriad of written documents which lay out the plans a business has for the future. Despite this, the goal is the same; creating profits for the shareholders of the venture .

Business Plan Explanation

Business plans are either internally or externally focused. Internally focused plans serve as a document to “rally the troops”; organize the stakeholders, especially employees , of a business and give an overall strategy to each of their regular tasks and actions. This has particular benefit for organization and motivation around the strategic goals that company leaders want to achieve. An internal business plan is the tool used to communicate these goals in a clear, effective, and calculated manner. External business plans serve the purpose of raising capital. Banks constantly visit with small businesses desiring a loan to finance a new project. Meanwhile, venture capital firms accept roughly 1 out of 1000 companies that contact them for financing. An external business plan serves as a tool to show that the business concept is developed, evaluated, and planned. Investors and lenders want to eliminate as much risk as possible, and an external business plan provides them a way to measure and mitigate these risks. In short, an external business plan is a way for a developing company to stand out from other businesses while showing that goals and aspirations have been considered and documented. These plans begin by following boilerplate sections and explanations. They then become unique documents. They are customized based on a variety of factors. For example, a web marketing firm has little use for the structure of an operations plan which is common to a manufacturing firm. In a similar fashion, a retail e-commerce store will even have a different business plan from a brick-and-mortar retail store. The factors of success, operations, marketing , risk, and measurement dictate this.

A Living Document

A business plan is often referred to as a “living document”. This is because a these plans are constantly changing. Whenever new developments in competition, marketing tools, the legal factors which relate to an industry, or others change a business plan must be updated so as to keep relevant. In this way a business plan is constantly evolving. A simple business plan is generally 20 pages, where a complicated one should not exceed 40 pages, on average.

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Business Plan Format

For a business plan, combine parts to make a whole. These parts, though different for each plan, generally follow common purposes. The standard business plan format is as follows: 1) Executive Summary 2) Business Description 3) Products and/or Services 4) Marketing Plan 5) Operations Plan 6) Management and Organizational Structure 7) Benchmarks and Milestones 8) Legal Entity Structure 9) Capitalization 10)Financial Plan and Projections 11) Appendix

For example, Alejandro has decided to start a micro-lending firm in his native country of Mexico. Combining philanthropy with his enlightened self-interest , Alejandro plans to make a profit while also fostering the entrepreneurial spirit in people who face a difficult future. Alejandro is excited to start his company and therefore, make his impact on the world. Alejandro knows that he has to create a business plan for his new venture . Despite this, he is a young adult and is not sure where to begin. Determined, Alejandro starts by searching the internet for the term how to write a business plan . He finds some results which begin his thought process. Alejandro picks up a few books from his local bookstore and begins his journey.

Writing the Business Plan

To start the business plan format, Alejandro starts by writing his executive summary. This process is difficult. Alejandro then learns from his research that to write the executive summary after the rest of the business plan. Alejandro stops this section and begins the business explanation. After writing a rough draft explanation of his business, he begins the competitive analysis. Here, he does as much research as possible into competitors on the market . Alejandro searches the web and personal contacts for this information. Then, Alejandro assembles industry statistics and information for his industry analysis section of the business plan. He will need to summarize these into a section which serves his purposes. Alejandro continues and eventually finishes the plan. With a rough draft in his hand, he seeks some advice for what he has made. Alejandro knows that he has a lot to learn, so he prepares himself for a lot of criticism. He finds his local S.C.O.R.E. chapter and prepares to begin the mentoring process. In conclusion, Alejandro knows that he has a lot to learn. Still, he realizes that anyone who has achieved greatness started somewhere. Alejandro prepares his plan more, parks his ego at the door, and walks into his meeting with a smile.

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