4 main purposes of a business plan

How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.

Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.

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Drafting the Summary

An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.

Ask for Help

When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.

After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business. 

The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.

Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.

Numbers-based Goals

Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.

Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.

Intangible Goals

Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.

The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.

If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.

This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.

You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.

Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.

Business Operations Costs

Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.

Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.

Other Costs

Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.

Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

What are some common mistakes in a business plan?

The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.

What basic items should be included in a business plan?

When writing out a business plan, you want to make sure that you cover everything related to your concept for the business,  an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.

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Julia is a writer in New York and started covering tech and business during the pandemic. She also covers books and the publishing industry.

Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Additionally, she is a Columnist at Inc. Magazine.

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Table of contents, the purpose of a business plan.

• 2 May, 2024

Importance of Business Plans

A well-structured and comprehensive business plan serves as a crucial tool for businesses of all sizes. It helps guide entrepreneurs and organizations by providing a roadmap for success, outlining key strategies, and ensuring alignment with market opportunities. Two primary aspects of a business plan’s importance are identifying market opportunities and setting business goals.

Identifying Market Opportunities

The primary purpose of a business plan is to identify, analyze, and describe the opportunities within the market. This involves examining economic factors, industry trends, and market demand. By conducting thorough market analysis, businesses can gain insights into customer needs, preferences, and behaviors. This information enables entrepreneurs to tailor their products or services to meet market demands and differentiate themselves from competitors.

A comprehensive market analysis within a business plan explores factors such as target demographics, market size, customer segments, and competitive landscape. Understanding these elements allows businesses to identify gaps in the market and develop strategies to capitalize on emerging trends and opportunities.

Setting Business Goals

Business goals play a pivotal role in the success and growth of an organization. They provide a clear direction and purpose, guiding decision-making, resource allocation, and strategic planning. Within a business plan, goals establish a roadmap for the organization, defining the expected achievements and outcomes.

Business goals should be based on a correlation between key performance indicators (KPIs) and the overall business strategy. It is essential to consider financial measures, customer satisfaction, internal business processes, and learning and growth opportunities when setting goals ( HBS Online ). By aligning business objectives with the company’s strategy and KPIs, entrepreneurs can justify and prioritize their efforts effectively.

To ensure effective goal setting, businesses can utilize strategy maps. These visual tools help identify and align goals and objectives by mapping the relationships between different perspectives, such as financial, customer, internal processes, and learning and growth ( HBS Online ). This strategic alignment ensures that goals are not only aspirational but also actionable and measurable.

In summary, a business plan is essential for identifying market opportunities and setting business goals. By conducting a thorough market analysis and aligning goals with the overall business strategy, entrepreneurs and organizations can increase their chances of success and effectively navigate the dynamic business landscape.

Implementing Business Goals

Once business goals have been established, it is essential to have a clear plan in place for their execution. This involves creating a roadmap for strategy execution and aligning business objectives.

Roadmap for Strategy Execution

A roadmap for strategy execution is a crucial tool that helps visualize the steps needed to achieve a company’s vision and turn it into reality. It provides a timeline that displays strategic goals, initiatives, milestones, and dependencies ( Aha! ). While a business roadmap differs from a business plan, it serves as a complementary tool to guide the implementation of the goals outlined in the plan.

The roadmap should be created by senior leaders and shared with functional teams to inform their own planning efforts. It provides a shared understanding of the big picture and helps align individual departments, breaking down silos between teams. By visualizing the key objectives and strategies, a roadmap ensures that everyone is on the same page and working towards a common goal.

Aligning Business Objectives

Aligning business objectives is crucial to ensure that all efforts within the organization are focused and working towards the same overarching goals. When business objectives are aligned, it fosters collaboration and coordination across departments, creating a cohesive and efficient working environment.

To align business objectives, it is important to clearly communicate these objectives to all stakeholders, including employees, customers, investors, and partners. This transparency allows everyone to understand the direction of the company and how their individual efforts contribute to the overall success.

Regular communication and feedback channels should be established to ensure that everyone is aware of the progress being made towards the objectives. This allows for adjustments and realignment as needed, ensuring that the business stays on track and adapts to any changes in the market or internal dynamics.

By implementing business goals through a roadmap for strategy execution and aligning business objectives, companies can effectively execute their plans and work towards achieving their long-term vision. This structured approach helps to keep teams focused, encourages collaboration, and provides a framework for monitoring progress and making necessary adjustments along the way.

Components of a Business Plan

A well-crafted business plan consists of several essential components that provide a comprehensive overview of a business venture. These components include the executive summary, market analysis, and financials and budget.

Executive Summary

The executive summary is a critical section of the business plan that serves as an elevator pitch for the business idea. It provides a concise summary of the entire plan, including the business approach, goals, and expected outcomes. In just two pages, the executive summary should captivate the reader’s attention and convey confidence in the success of the business venture ( Constant Contact ). It acts as a call to action, encouraging investors and lenders to delve deeper into the plan.

Market Analysis

The market analysis section of a business plan is crucial for understanding the target market and identifying opportunities for growth. It involves conducting thorough research on the industry, competitors, and target customers. By analyzing market trends, customer demographics, and competitors’ strengths and weaknesses, businesses can develop effective strategies to position themselves competitively ( Constant Contact ).

A comprehensive market analysis should include:

• Industry Overview: An overview of the industry, its size, and growth potential.
• Target Market: Identification of the specific customer segments the business aims to serve.
• Competitive Analysis: Evaluation of direct and indirect competitors, their products or services, and their market share.
• Marketing Strategy: Detailed plans for reaching and engaging the target market, including marketing channels, pricing strategies, and promotional activities.

Financials and Budget

The financials and budget section of a business plan is crucial for demonstrating the viability and profitability of the business idea. It provides a comprehensive overview of the financial aspects of the business, including projected revenue, expenses, and profitability.

This section should include:

• Financial Statements: These statements summarize the financial health of the business, including income statements, balance sheets, and cash flow statements. They provide valuable insights into the financial viability and sustainability of the business ( Constant Contact ).
• Sales Forecast: A projection of anticipated sales revenues based on market analysis, pricing strategy, and estimated market share.
• Budget: An outline of projected expenses across different categories, such as marketing, operations, and overhead costs. It helps businesses allocate resources efficiently and manage their finances effectively.

By including these components in a business plan, entrepreneurs can present a comprehensive and well-rounded view of their business idea to potential investors and lenders. These components provide the necessary information to assess the market potential, financial feasibility, and overall viability of the business venture.

Benefits of Business Planning

A well-crafted business plan serves as a crucial tool for entrepreneurs and businesses alike. It provides a roadmap for success and helps in achieving various objectives. Two key benefits of business planning are achieving viability and securing funding.

Achieving Viability

According to a 2017 Harvard Business Review article, entrepreneurs who write formal business plans are 16% more likely to achieve viability compared to those who do not plan ( Investopedia ). A business plan allows entrepreneurs to evaluate their ideas, identify potential challenges, and develop strategies to overcome them. By thoroughly analyzing the market, competition, and target audience, entrepreneurs can make informed decisions and increase their chances of success.

A business plan helps to clarify the goals and objectives of the business, ensuring that all efforts are aligned towards achieving them. It provides a comprehensive understanding of the market opportunities and guides entrepreneurs in making strategic decisions to capitalize on them. By outlining the steps needed to reach milestones and setting measurable objectives, a well-conceived business plan helps businesses stay focused and on track.

Securing Funding

For startups and even established businesses, securing funding is often a critical requirement for growth and development. Banks, venture capital firms, and other lenders typically require a business plan before considering providing capital to new businesses ( Investopedia ). A well-crafted business plan demonstrates to potential lenders and investors that the company has a clear vision, a solid understanding of the market, and a strategic plan for growth.

Investors and lenders rely on business plans to assess the health and prospects of a company before making financial commitments. The financial projections, market analysis, and competitive analysis included in a business plan help lenders evaluate the viability and potential return on investment. By showcasing the business’s growth potential, a business plan increases the chances of securing the necessary funding to fuel entrepreneurial dreams.

To learn more about the importance of a business plan and how it can benefit small businesses, startups, and businesses aiming for growth, visit our articles on business plan for small businesses , business plan for startups , and business plan for growth .

In summary, a well-conceived business plan not only helps businesses achieve viability by providing a clear roadmap for success, but it also plays a crucial role in securing funding by demonstrating the business’s potential and strategic approach to growth. Whether you are an entrepreneur starting a new venture or an established business looking to expand, investing time and effort in creating a comprehensive business plan can significantly increase your chances of success.

Business Plan Updates

To ensure the continued effectiveness and relevance of a business plan, it is essential to regularly update and revise it. This section explores two critical aspects of business plan updates: flexibility and adaptability, as well as annual review and revision.

Flexibility and Adaptability

Businesses are dynamic entities that often encounter changes in the market, industry, or internal environment. Therefore, a well-conceived business plan should demonstrate the ability to adapt and remain flexible to these shifts. As Investopedia suggests, established businesses that decide to shift direction may create an entirely new business plan to align with their new goals and strategies. This reflection of flexibility and adaptability is a key attribute of a business plan.

By regularly reviewing the business plan, entrepreneurs can identify areas that require adjustment to accommodate changing circumstances. This could involve revising the marketing strategy, modifying financial projections, or adapting operational processes. The ability to adapt the plan allows businesses to stay responsive in an ever-evolving marketplace, increasing their chances of long-term success.

Annual Review and Revision

An annual review and revision of the business plan is a valuable practice that helps maintain its relevance and effectiveness. As the business progresses and achieves its goals, it is crucial to update the plan to reflect the accomplished milestones and adjust future objectives accordingly. This process ensures that the plan remains a living document that evolves with the business, as stated by Investopedia .

During the annual review, entrepreneurs should assess the progress made in relation to the initial business goals and objectives. This evaluation can identify areas of success and areas that require improvement. By conducting a comprehensive analysis of the business’s performance and the market landscape, entrepreneurs can make informed decisions about necessary adjustments to the business plan. This may involve updating financial projections, refining marketing strategies, or reevaluating the competitive landscape.

Regularly updating the business plan also demonstrates a commitment to ongoing planning and improvement. It provides an opportunity to align the business’s vision and goals with the current market conditions and address any potential risks or emerging opportunities.

In summary, maintaining a flexible and adaptable business plan, coupled with an annual review and revision process, ensures that the plan remains relevant and effective. By embracing change and regularly updating the plan, entrepreneurs can navigate the evolving business landscape with confidence and strategic foresight.

Elements of a Well-Conceived Plan

A well-conceived business plan serves as a roadmap for the success and growth of a business. It incorporates various elements that help clarify milestones and obtain objective feedback to guide the company in the right direction.

Clarifying Milestones

One of the key elements of a well-conceived business plan is the establishment of clear milestones. These milestones act as markers of progress and provide a sense of direction for the business. By defining specific goals and objectives, entrepreneurs and business owners can ensure that their efforts are aligned with the overall strategy.

Milestones can be both short-term and long-term, allowing the company to track its progress as it strives to achieve its vision. These milestones may include targets related to revenue growth, customer acquisition, product development, market expansion, or any other key performance indicators relevant to the business.

By clarifying milestones in the business plan, entrepreneurs can stay focused, measure their progress, and make necessary adjustments along the way. It also provides a sense of accomplishment as each milestone is achieved, motivating the team to keep pushing forward.

Obtaining Objective Feedback

Another crucial element of a well-conceived business plan is the opportunity to obtain objective feedback from trusted sources. Sharing the plan with mentors, advisors, or industry experts can provide valuable insights and perspectives that can help refine the business strategy.

Objective feedback allows entrepreneurs to identify potential obstacles or areas of improvement that may not have been apparent initially. It helps in validating assumptions, identifying potential risks, and exploring alternative approaches. By seeking feedback, entrepreneurs can strengthen their business plan and increase its chances of success.

Additionally, obtaining objective feedback from external sources can provide credibility and reassurance to potential investors or lenders. It demonstrates that the business has thoroughly considered various aspects of its operations and has sought input from knowledgeable individuals.

To maximize the benefits of obtaining objective feedback, entrepreneurs should carefully select individuals with relevant expertise and experience in their industry. This ensures that the feedback received is valuable and tailored to the specific challenges and opportunities of the business.

In summary, a well-conceived business plan includes the elements of clarifying milestones and obtaining objective feedback. By setting clear milestones, entrepreneurs can track their progress and ensure they are on the right path to achieving their goals. Obtaining objective feedback helps refine the plan, identify potential obstacles, and increase its credibility. Together, these elements contribute to the overall success and growth of the business.

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What Is the Purpose of a Business Plan?

A well-developed business plan can make a world of difference. It doesn't only serve one purpose but a multitude of them. 

A business plan provides a clear snapshot of the goals of your business. It's not just a document for securing funding. It's a dynamic tool that can help you with strategic planning, resource allocation, and business management. 

A business plan acts as a blueprint. It makes sure all aspects of your business work together to attain sustainable growth and profitability.

If you're wondering what the purpose of a business plan is, stick around. In this article, we'll discuss all the ways a business plan can help you and why you should have one. 

What Does a Business Plan Do?

A business plan serves as a roadmap for your company. 

Simply put, this document outlines your business goals. It also explains how you plan to achieve those goals and in what timeframe. It includes valuable marketing, financial, and business elements. 

Writing a business plan is a stressful, time-consuming process. That's why you should take your time and do research beforehand. 

A business plan isn't only a vital tool for startups looking for investment opportunities. It can be just as useful for already established businesses. 

Some of the main purposes of a business plan include:

• Strategic roadmap 
• Operational guide
• Risk management
• Financial planning
• Market analysis
• Communication tool 
• Performance measurement
• Securing investments

Planning is often considered the key to success. That's exactly what you will be able to achieve with your business plan. 

Strategic Roadmap 

A business plan provides direction and helps you set important goals. 

It does this by:

• Outlining your business's mission, vision, and objectives
• Identifying your target market and competition
• Developing strategies for marketing, sales, and operations
• Projecting your financial performance
• Establishing milestones and tracking progress

When you start writing a business plan, you need to clearly define the company's mission. Your mission is the purpose of your business. 

Your plan also outlines where your company aims to be in the future. This is your vision, and it refers to your long-term aspirations. 

And finally, it explains your objectives, which are specific, measurable goals. 

These three elements can help you create an effective business strategy. Your strategy should outline measurable and time-bound goals that the company aims to achieve. It should encompass the next three to five years. 

Your plan should include initiatives, projects, timelines, and key milestones. It serves as a communication tool for stakeholders. For instance, employees, investors, and partners.

Operational Guide

Think of your business plan as a GPS for your company. It helps you define how to run your business. 

A business plan provides a framework for how the business will operate on a day-to-day basis. This includes:

• Defining the roles and responsibilities of your employees
• Establishing policies and procedures
• Outlining the processes for key business functions 
• Determining how resources are allocated and managed to support operations

A business plan can help make sure that all employees are on the same page about the company's goals and objectives. It can provide a roadmap for how to achieve those goals and objectives.

By providing a clear and concise operational guide, a business plan can help improve efficiency, productivity, and profitability.

With a solid business plan, you can count on everything in your company to run smoothly. 

Risk Management

Writing a business plan helps with risk management in several ways, including: 

• Identification of risk
• Risk assessment
• Mitigation strategies
• Financial risks
• Contingency planning
• Resource allocation
• Regular review and adaptation

A business plan requires an in-depth analysis of the internal and external environment. This helps you find potential risks and challenges your business may face.

The business plan process involves risk assessment. This means analysing how likely the risk is and how much it would affect your business. It also allows business owners to assess how severe each risk is. 

Developing a business plan helps you come up with strategies to deal with potential risks. This includes creating contingency plans and identifying alternative courses of action.

A well-structured financial plan helps anticipate financial challenges. You will be able to make informed decisions to manage cash flow and handle financial risks.

A business plan serves as a roadmap for the future. It includes contingency plans. This outlines how your business will respond to unexpected events or changes in the market.

As a business owner, you need to allocate resources efficiently. A business plan ensures that you have the necessary resources to deal with potential risks.

A business plan is a dynamic document. It should be reviewed and updated regularly. This process allows business owners to monitor risks all the time. You will then be able to adapt your strategies accordingly.

Financial Planning

One of the most important purposes of a business plan is financial planning. It provides a framework for managing and projecting the financial aspects of a business.

A business plan can help with:

• Financial projections
• Funding requirements
• Profitability analysis
• Scenario planning
• Investor communication
• Return on investment (ROI) measurement 

Every business plan should include financial projections. They are based on market analysis, sales forecasts, and pricing strategies.

Your business plan will help you allocate resources effectively. That way, your budgeted funds will align with your strategic priorities.

Your plan will also identify the amount of capital required to start or grow the business. If you are seeking external funding, your plan will explain the need for investment or loans.

Business plans also help with analysing your profitability. This includes gross and net profit margins and break-even analysis.

If you're looking for investors, a business plan is essential. Most investors won't even consider investing in businesses that don't have a business plan. 

This document makes you more trustworthy in the eyes of investors. The same applies if you're interested in loans, grants, or applications. 

Market Analysis

A business plan helps you with market analysis in the following ways:

• Identifying and understanding your target market 
• Assessing the competition
• Evaluating market opportunities and threats
• Developing marketing strategies 
• Forecasting sales and revenue

Doing thorough market research is a vital part of any business plan. It helps you identify and understand your target market. This includes gathering data on customer demographics and buying behaviour.

A business plan also requires you to analyse the competition in your industry. This includes your competitors, their strengths and weaknesses, and their market share.

With a good business plan, you will be able to discover new market opportunities. This refers to identifying potential growth as well as risks and challenges.

A business plan involves creating effective marketing strategies. This will help you reach your target market and achieve your business goals. 

This includes identifying your marketing channels, developing your marketing messages, and setting your budget.

A business plan also requires you to forecast sales and revenue. This helps set realistic financial goals, which you can track over time.

Communication Tool 

A business plan can also act as a communication tool.

A well-crafted business plan communicates the company's goals, strategies, and financial projections. That way, everyone is on the same page and working towards the same goals.

A comprehensive business plan is a crucial tool for attracting investors. It provides potential investors with a clear understanding of your business model. It also shares information on your market potential and financial viability.

Lenders and financial organisations often ask to see a business plan. They use it to check the company's potential for success. A well-written business plan can increase the chances of securing finances. 

Sharing the business plan with employees can foster a sense of engagement. When employees understand the company's goals and strategies, they are more likely to be motivated. 

A business plan can also be used to communicate with customers and build relationships. By sharing the company's values, businesses can create a stronger connection with their customers. This establishes long-term trust.

Performance Measurement

A business plan helps you set clear goals. It outlines the specific objectives that the company aims to achieve. These objectives can then be used to measure the company's performance.

Your business plan can serve as a baseline against which the company's actual performance can be compared. This allows you to track its progress. It will also help you find areas that need to be improved. 

You will be able to identify key performance indicators (KPIs). 

KPIs are specific metrics that measure the company's progress towards its goals. Your business plan can help identify the most important KPIs and track them over time.

You can use your plan to assess the company's performance on a regular basis. This can help you identify areas where it is successful and areas where it needs to improve.

Your business plan can be used to communicate the company's performance expectations to employees, investors, and other stakeholders. 

Securing Investments

A business plan can help you secure investments by:

• Demonstrating feasibility
• Showing potential for growth
• Providing financial projections
• Building credibility
• Articulates the potential return on investment (ROI)
• Attracting the right investors

A well-structured business plan outlines the viability of your business idea. 

It provides potential investors with a clear understanding of your target market. It also sheds light on your competitive landscape and revenue projections.

Investors are more likely to invest in businesses with a clear path to growth and profitability. Your business plan should highlight your growth potential. It should also explain how you plan to do it.

Potential investors need to be able to see how their investment will be used and what kind of returns they can expect. Your business plan should include detailed financial projections. This includes income statements, balance sheets, and cash flow statements.

A well-written business plan shows potential investors that you have taken the time to think through your business idea. It also shows you have a solid understanding of your market and competition.

This will help you attract the right type of investors who align with your business goals and values.

What Is a Business Plan Used For?

A business plan is a multifaceted tool that serves various purposes for businesses of all sizes. It provides a roadmap for growth, helps with risk management, facilitates financial planning, enables market analysis, and acts as a communication tool. 

If you're not sure how to write a business plan, leave it to us. 

Launch Crew Consulting is a team of expert business plan writers. We specialise in market research and business plan development . If you sign up for our services, we will have your business plan ready for you in just two weeks.

Feel free to reach out to us if you have any questions. 

4 years ago

Why is a business plan important?

A business plan is an important document for every business. An effective business plan should outline the objectives of the business and the strategies required to help the business succeed in its goals, creating a detailed road map. A good business plan will confirm your business idea and purpose, making your operations as clear as possible to potential investors and funding partners.

What are the 3 main purposes of a business plan?

1. Securing external funding - This is one of the most well-known purposes of creating a clear plan. Business plans can help your business secure funding, as it will provide the detailed information banks, investors and venture capitalists require to assess the potential viability of your goals.

2. Highlighting potential issues and opportunities - Planning will help you operate more effectively, by taking into account potential future scenarios. It will help you spot potential issues, so that you can avoid pitfalls, while also highlighting opportunities which may have gone unnoticed.

3. Creating a clear set of goals - A clear plan will provide you with direction and focus, which will make it easier to achieve your goals. The projected pathway will layout a clear set of goals, with the steps you need to take and at what time.

What is the point of a business plan?

There are a variety of individuals which may want to see your business plan, from investors to potential employees. When you are starting to write your plan you need to take into account the potential audience, as different aspects will be under scrutiny by different people.

Naturally, anyone who is thinking of becoming involved with your business will want an overview of the steps your business is taking towards success. For example, if your business needs to take out a business loan , the lender is likely to want to see your business plan. The lender will need to see sections such as cash-flow statements and balance sheets, which will provide an overview of your current and projected finances.

A business plan should be short and concise, so readers can see a clear summary of your businesses aims and current position. There are many possible structures which can be followed when writing a business plan, although the following is a useful overview of the most important sections to include:

1. Mission Statement - What is the purpose of the business? Think about the impact you plan on making to the lives of your customers.

2. Value proposition - A definition of your ideal customer and the niche which you aim to serve.

3. Overview of operations - How will you attract customers? How will orders be fulfilled? Think about how your company plans to operate day to day.

4. Key staff - Although your small business might only employ a single person, think about other people which your business relies upon. For example, an accountant, virtual assistants and external agencies. Who might you want to employ beyond the present time?

5. Finances - The financial section of a business plan is of key importance, so the figures should be accurate as they are likely to get scrutinised at some point. You should include projected sales, wages, costs, a profit and loss statement, cash flow forecast and a balance sheet.

Is a business plan useful?

A business plan is a flexible document which evolves as your company grows and develops. By consistently making minor changes and updates to your business plan you will ensure that you make realistic goals. By referring to your plan regularly, you will always know whether your business is on target. The plan will highlight any areas which are under performing and new opportunities which could help your business grow.

Whether you are an established company looking to increase cash flow to take advantage of a new opportunity or one of the many small businesses just starting out, we can help. As a comparison service we have partnered with a variety of lenders, so businesses can compare funding options and get the best deals possible. To find out more about how we can help you make the most of your opportunities, please contact our team today.

Kerry Fawcett

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What Are the Functions of a Business Plan?

• Small Business
• Business Planning & Strategy
• Elements of Business Plans
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How to Start a Business Like Berkshire Hathaway

What are the two functions of an entrepreneur, the disadvantages of business planning.

• Challenges of Strategic Planners
• How to Write a Cover Letter for a Business Plan

It's not one of "those" dirty words, but "business plan" has assumed a distinctive place in the vernacular of many small-business owners. They're told they need one, try to muster the enthusiasm to write one, but inevitably put it off – sometimes until someone in a position of authority (like a banker) demands one.

Of all the planning documents an entrepreneur is advised to draft, a business plan is arguably the most critical of all. The irony is that it's usually the one small-business owners end up consulting most often – not just in the early days but also as the business grows and confronts challenges the owner could never anticipate. You may be resisting the exercise, as business owners understandably do because they want to expend their valuable energy on selling and winning over new clients. It may be time to upend this paradigm and let the merits of a business plan sell you.

Embrace the Role of a Business Plan

For a document that can span (brace yourself) dozens of pages, every section of a business plan should go to the heart of addressing two crucial questions:

• What do I want to accomplish with my new business?
• How am I going to accomplish it?

The questions belie the depth of the exercise, for a business plan probes the structure, organization, management and processes of a new venture in great detail – or at least as much detail as the new business owner has at his disposal at the moment.

Two may be a lucky number because the successful entrepreneurs at SCORE , who mentor so many others, reduce the purposes of a business plan to:

• Providing a cohesive vision for a small-business owner. This road map keeps a business owner focused on the journey ahead by providing clarity and focus, steering away from diversions that tempt many entrepreneurs in the early days.
• Demonstrating to lenders that the venture is different from others in the workplace, primed for success, and otherwise worth the risk.

The U.S. Small Business Administration invokes the road map analogy, too, saying: "You wouldn't drive 2,000 miles without a map, so don’t start a business without writing a business plan; it's your road map to success!"

Owners Value Role of a Business Plan

Though well-intentioned, the advice sidesteps an important reality: Most entrepreneurs don't rely on a bank loan to fund their startups. According to Small Biz Genius:

• 32 percent use their own cash.
• 13 percent dip into their retirement accounts.
• 12 percent turn to friends and family.

Only 24 percent rely on loans, which suggests that the first function of a business plan is the more important of the two. Put another way, you may not need that road map when things are going well, but running a small business is nothing if not an adventure, filled with unexpected challenges, detours and the occasional accident. It's at these junctures that the road map becomes an indispensable guide to regaining your bearings and getting back on track.

A study of 1,000 entrepreneurs by the Harvard Business Review bears this out. It found that the most successful ones wrote their business plan within six and 12 months of deciding to start their own business. It's precisely when they are starting to sell and win over clients that writing the plan comes into sharper focus. The HBR found that committing a plan to paper increases a startup's chance of viability by 27 percent.

Business Plan Areas Cover the Bases

At some point, you may want to take out a loan to pay for new equipment or to fund an expansion. Then a business plan becomes a necessity. Until then, Nolo says it plays a role in the financial future of your business by:

• Analyzing the competition so it can outmaneuver it
• Outlining a winning marketing strategy and tactics
• Providing revenue and expense estimates
• Crystallizing how the business will turn a profit
• Anticipating risks and opportunities
• Forecasting its financial future

This is a wide load to superimpose on any road map, but it's a completely attainable one when you consider the format of a business plan advocated by the U.S. Small Business Administration . It sets you up for success with a sensible, nine section progression of ideas:

• Executive summary
• Company description
• Market analysis
• Organization and management
• Product line or service
• Sales and marketing
• Financial projections

Many business experts agree that a business plan should consist of at least 50 pages to cover these topics thoroughly. However, as with many undertakings, it's quality, not quantity, that matters most. This is why the Harvard Business Review says it found that those successful entrepreneurs devoted about three months to writing their business plan – a realistic amount of time to scrub this once dirty word from anybody's vocabulary.

• SCORE: What Is the Purpose of a Business Plan?
• The U.S. Small Business Administration: SBA Learning Center
• Small Biz Genius: 39 Entrepreneur Statistics You Need to Know in 2021
• Harvard Business Review: When Should Entrepreneurs Write Their Business Plans?
• Nolo: Why You Need to Write a Business Plan
• U.S. Small Business Administration: Write Your Business Plan

Mary Wroblewski earned a master's degree with high honors in communications and has worked as a reporter and editor in two Chicago newsrooms. Then she launched her own small business, which specialized in assisting small business owners with “all things marketing” – from drafting a marketing plan and writing website copy to crafting media plans and developing email campaigns. Mary writes extensively about small business issues and especially “all things marketing.”

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• 1 What Is the Importance & Purpose of a Business Plan?
• 2 The Four Major Reasons for New Business Failure
• 3 Why Is an Effective Business Plan Introduction Important?
• 4 The Importance of a Business Plan

• Starting a business

What is a business plan used for?

At one point or another, most people have entertained the idea of starting their own business . It’s an appealing thought. You get to be your own boss (or the boss), calling the shots and pocketing most of the revenue. However, most people’s dream of building a business fizzles at the business plan stage. To say a business plan is a lot of work is an understatement; however, they are vital to getting any company up and running.

To identify new opportunities

Final thoughts.

If you’re wondering what a business plan is used for, you’ve come to the right place. Business plans do many things, but they have four main purposes that we will elaborate on.

To attract capital

Starting a business takes a substantial, if not massive, investment. Depending on the company, there are tons of costs like building, licensing, labor/production, materials, and many others to consider just to get it started. This capital is hardly ever supplied in full by the business founders. Business owners reach out to either lending institutions or investors to provide the money for these costs.

To convince either banks or investors to give you all this money, you’ll need to convince them it’s a sound investment. This is the first vital task of the business plan. Investors and banks need to see data backed up with proof on things like projected earnings, overhead costs, customer demographics, competitor analysis, the future vision for the business, and much more.

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To attract partners and management

Once you’ve secured capital to start your company with your business plan, the next step is to attract partners and management. By having a clear vision for your business outlined within the business plan, you can attract top-tier talent to help achieve your goals. Investors can often become working partners at the starting phase of trying to attract capital because they believe in your business goals.

When hiring managers to do the hard, day-to-day work, it’s a good idea to be transparent and share your business plan with them. By doing this, management can see your data-driven business projections and know what success looks like. If management clearly understands what they’re working towards, the likelihood of reaching those goals is much higher.

It acts as a barometer of success

The hours of meticulous forecasting and research you put into creating your business plan aren’t just to attract capital. By sticking to the milestones set in place by the business plan, you can use it to measure success.

If you go back and look at your estimated earnings for five years in business, and they are way off the mark, you should probably do an audit to find out why. Understandably, projections can be off, and there are always factors that aren’t taken into account. But if you put in the work and did it right the first time, you should be able to pinpoint why you missed the mark. It’s is highly unadvisable to go back and change your business plan to match your current numbers.

To build off the last point, you use a business plan to see if you hit your target goals and identify new opportunities for your business. As time goes on, it’s essential to return to the business plan to reexamine (not change) the projections and see what is different. Within these differences could lie opportunities.

For example, perhaps your demographics projections stated that the dominant age group for your region would be 45-60 years old for the next ten years. Instead, you find that younger people have moved into the area (25-38). Herein lies opportunities for new marketing strategies, product development, price adjustments, and many more.

Although a primary use of a business plan is to secure investment, it should never be filed away, never to be seen again after achieving that goal. Your business plan should be at the forefront of every business decision. It should also be referenced frequently to measure your success and identify new opportunities.

Business plans, however, aren’t set in stone. Sometimes companies make drastic changes to their leadership or ownership structure, and the business mission statement can change. In these instances, leadership should make addendums to the original business plan, but the original should never be entirely scrapped. Only when a company changes completely, like going from selling donuts to dump trucks, should it create an entirely new business plan. It’s vital not to completely abandon the original business strategy you built your initial customer base upon.

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• Business plans

Everyone loves pizza, and so do you. That is why you want to do your local pizza bar that everyone will enjoy. You love to see the joy come across people's faces as you give them your homemade pizza. You also enjoy mixing drinks as part of your hobby, so have an idea of a bar and a pizza place where people can come to hang out with friends. You want to have a space that gives people happiness. You want to be the place where celebrations and events will be taken place. You want to enjoy having your place.

The items listed above will introduce a great start for your career. You get to share your delicious homemade pizza with your customers. You want to have a comfortable environment where you can introduce live music and cheer. Your business will continue to flourish with ease as not only a bar but a place where people can go with their friends, family, and their partners. You will be the place where the night is young with a lighted area where customers can sit outdoors. All you need is ideas, your recipe, and the supplies that you need to start your business.

Are you a person who just got a business degree? Do you want to start a business that helps others feel at home? You like to sell things that people need to make their homes clean and decorative. You know that homes reflect the owners' personality, and you want to give new homeowners the chance to decorate their new homes. To start helping others, you must decorate your building with home goods, knickknacks, and supplies. You know what customers are looking for and where they could get it, which is when your business comes in to give homeowners the supplies they need for their new home.

The items listed above are not only items you will sell but the items that you need to start your career off on the right track. You questioned how to start your business with an idea. The first idea is to organize and clean the building that will be the place for your business. You will also be selling items that homeowners need and that you will be using for your new business. You do not have to worry about starting your business blindly, some simple tasks and items will guide you to your journey to a successful career. You will be able to enjoy your first local business.

• Business Guides

You suddenly have a fun idea to show off your creative coffee and tea recipes. Why not start a coffee and tea shop? Coffee and tea shops are popular during modern times. People enjoy a nice cup of coffee or tea to start their day. You might even want to start with your food recipes and share them with the world. You do not have to worry about starting your coffee and tea business without any items. You can enjoy decorating and getting the items that you need to start your new business. You get to enjoy your wonderful coffee shop.

Your coffee and tea shop will start with a positive path to success. You get to choose and create your menu with the food you love to create. Your customers will enjoy your positive energy, and they will never want to leave. You will have that delicious scent of coffee and tea that your customers will not resist. You will host events such as poetry readings, musicians, and artists to promote your business. You will also help local artists succeed as they will help you succeed in your local business. You will enjoy your coffee shop and the career path that you have chosen.

Top 4 Reasons to Write a Business Plan

• Posted in Marketing
• Posted by Impact

Would you buy a car without ever looking at the specs, or jump headfirst into building a home without ever seeing a blueprint? Probably not! Unfortunately, many business owners approach their businesses with this mindset.

Much of the time, entrepreneurs get tied up in all of the logistical to-dos that demand immediate attention when opening a business. However, in order to prepare for potential roadblocks and to streamline your company’s vision and purpose, creating a business plan is crucial.

Check out the top 4 reasons to write a business plan and what it can do for your company:

1. Defines and Refines Your Market

One of the most common things that gets overlooked when starting up a business is defining and refining your market and audience. When writing a business plan, you have the chance to really research your market and figure out if you want to reach a particular niche. You may discover you want to target by gender, age, income, or even job status (i.e., business owners, veterans, etc.).

By narrowing down your market, you can tailor your marketing materials, website, services, and products to better meet the needs of your exact audience. You can also beta test what methods work and which ones are better left on the drawing board.

2. Irons Out Realistic Profit and Revenue Goals

Business continues whether you have time to sit down and create goals or not. However, it’s important to set financial goals to ensure that your company is accomplishing what you need and want in terms of finances. Really looking into your current costs and taking the chance to set realistic profit and revenue goals can help you decide what you want from your company and where to cut back.

3. Clarifies Company Mission and Values

When creating a business plan, it’s the perfect time to focus in on what your company’s mission and values are. Let’s take the example of TOMS shoes. When they began, they started with the broad idea of providing shoes to children in need across the world. They were able to define their mission with their One for One® plan. For every one pair of shoes they sold, they were able to provide a pair of shoes to a child in need.

As they’ve expanded their product model, they still stand by their One for One® mission, whether selling eyewear for eyesight, bags for safer births around the world, or coffee for clean water. Their company looks different than it did at the beginning, but it still stands by the same idea of improving the lives of others through their business.

By evaluating and zeroing in on your mission, vision, and values, you can create a model that can expand while still keeping with your original intent.

4. Narrows Down Elevator Pitch for Potential Partners & Lenders

You’ve probably seen Shark Tank at one point or another. There’s almost nothing more cringe-worthy than when an entrepreneur enters the “tank” and tries to sell a product or service without a well-formed plan or hard-hitting pitch. The sharks are hardly more brutal than when someone comes in unprepared to sell their company.

When you’re creating a business plan, you’re defining that hard-hitting elevator pitch. Whether you’re trying to discover new clients, expand your market with potential partners, or get backing from investors or lenders, a refined elevator pitch is crucial to prove you have what it takes to earn their trust and support.

Learn More About Writing a Business Plan

Want to write a business plan but aren’t sure how to? Look out for our upcoming blog post outlining how to write a business plan!

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Stephen started in the insurance marketing business in 2001 as a new business consultant. In 2002 he was promoted to Director of Sales and built a 200 million book of business from scratch. By 2005, he was one of the top wholesalers in the country, working with some of the top financial advisors and insurance agents across the USA. In 2008, Stephen was promoted to Co-President of one of the largest IMOs in the country.

In 2011, Stephen continued his entrepreneurship path and co-founded The Impact Partnership, an INC 5000 company. Stephen is responsible for the strategic vision of Impact and is laser-focused on creating a culture of growth for both internal teammates and our amazing customers.

Stephen lives in Kennesaw, GA, with his wife of more than 20 years, Kendra. They are blessed with three beautiful children Katie, Tyler, Anna Brooke, and Laya, their German Shepherd and Luna, their BernieDoodle.

4 MAIN PARTS OF A BUSINESS PLAN: 4 Necessary Business Plan Components

• by Kenechukwu Muoghalu
• August 14, 2023
• No comments
• 8 minute read

Table of Contents Hide

#1. executive summary.

• #2. Construct The Management Bios
• #3. Market Analysis
• #4. Financial Plan

#1. It Shows Some Level of Seriousness About Your Business

#2. it secures you some funds, #3. gives more insights on the market terrain, #4. help you create critical decisions, #5. helps provide structure and management objectives to a business, #6. pins out potential weakness, key lessons on the 4 main parts of a business plan, what next, what is the basic structure of a business plan, what are the contents of a business plan, can i use a template to create my business plan.

If you are looking for a simplified way to create a unique business plan, then you should scan through these 4 main parts of a business plan listed in this article. It is right to say that a business plan can boost the growth of every business, but the structure of that plan is also important.

According to Wikipedia , a business plan entails the goals of a business, how to set and achieve those goals, and how long it will take to achieve the desired result. In order to create this road map for the success of your business, you need to pick some important components that should be enlisted in your business plan.

There are several components to a business plan, but this article will focus more on the most essential parts of a business plan. These four main parts of a business plan can cover either a small-scale business or a large-scale business, but the main focus should be on creating an effective business plan.

4 Necessary Business Plan Components

When it comes to components of a business plan, there are quite a handful of options. These options also cover a large-scale business. Out of these numerous options, there are major components that should be present in any business plan, they include:

Believe me, when I say that no one has all the time to go through your 30-pages business plan, you need a summary. The executive summary is one of the 4 main parts of a business plan that should not be ignored. Once you hand out your business plan to any reader, they will scan their eyes through your summary to know if the business sparks their idea or not.

An executive summary should be more of a call to action because it will determine if the reader should inquire further about your business or just let it slide.

While writing an executive summary, you should include your business mission statement. You should also include a description of your product and the services your business offers. Make the readers understand your level of knowledge in your business and how unique you are from the others .

# 2. Construct The Management Bios

The key people in your business will determine if the business will be a success or not. This is the reason why their bios must look outstanding to the readers. You will need to impress your readers so they can take interest in your business. That is the more reason why the management bios need to stand out.

Read Also: BENEFITS OF A BUSINESS PLAN: Benefits and Drawbacks

When creating their bios, enrich them with good quality skills that they possess. You can also refer back to their level of expertise and state how they are always ready to deliver services. Include previous positions, experiences, and how you intend to fill any skill gaps with outsourced assets. Note that one good page bio on each of the key people involved in your business is enough to keep you on the good side.

# 3. Market Analysis

In this section, explain why you chose this market and why you think it is important in this recent environment. You will also make some good research to detect who your audience and competitors are. You will also be making use of some quantitative analysis. This is because your readers need to see numbers need to detect how important your market segment is and how well it can boost your business. 

List the current challenges they may face and how your company can handle the problems. Review your competitors, discuss how far unique you are then they are and the possibilities of taking their market shares from them. From this, your readers or investors will detect how familiar you are with the market. Describe your customers and how to reach out to them to make sales.

# 4. Financial Plan

Your financial plan is another vital aspect of the 4 main parts of a business plan that is not to be ignored. Your financial projections are an area of interest to your partners and investors. This is because it determines the viability of your company in the future. Your financial statements should contain lots of numbers represented in charts. It should also contain a few words that describe what it is about.

To get the reader’s attention, add an introductory page to explain how the estimations were made in full detail.

In this section, you should also include income statements, balance sheets, and cash flow statements. When your financial sector is planned out well, it can guide you to start and grow your business.

Read Also: STARTING A BUSINESS: Best Guide For Beginners and Dummies

The income statements should entail your monthly income projections for the first year of your business, the second year of your business, and annually.

Cash flow statements also entail the movement of your capital. It shows how much your business needs when it will be generated, and when it is going to arrive.

This balance sheet holds the summary of your company’s assets, equity, and liabilities.

The Importance of Having a Business Plan

Entrepreneurs do not just create a business plan for the fun of it. A business plan has a lot to contribute to every business. Having looked at the 4 main parts of a business plan, now let’s buttress more on the importance of a business plan, to see more reasons why you need to create a breathtaking plan.

A business plan is more like having a strategy and when an entrepreneur has a strategy for their business, it only means that they are passionate about its growth. This passion shows some level of seriousness and will eventually attract investors, partners, or employees to the business.

A business plan can guarantee funds for your business either from your first stage or in years to come. If you have future plans of selling your company to another in the future or even borrowing from a bank, then a business plan is compulsory for that decision. Any financial aider would lookout for a business plan before financing your company.

Having a business plan will give you an edge in understanding your competitors and the market in a more accurate and broader manner. You will better understand the consumer trends and preferences and know how to navigate them to suit your company’s needs.

A business plan is responsible for most vital decisions when it comes to a business. One cannot seem to operate a company without having tons of decisive moments and that is where your business plan comes in handy. With a business plan, you will not need to always sit down and articulate your next move in your business. The presence of a business plan shows that most thinking has been done already. With that, it helps you make critical decisions in time and even ahead of time.

The structure and objective of any business will stand firm with the presence of a business plan and without one, objectives often become arbitrary. Some functions like sales targets and operational milestones will be on track with the aid of a plan. When these functions are guaranteed, it will be easier to measure and manage your company.

Potential pitfalls can ruin any company, but when the company has a business plan, it will identify those weaknesses even before it happens. As an entrepreneur, you might also need to share your business plan with potential professionals and experts to get their advice on how solid your plan looks.

Knowing what matters and following the 4 main parts of a business plan listed above while implementing all that applies is a good way to start off any business. Now to make sure you get the drip, let’s review the top lessons we went over in this article:

• For your business plan to be the talk of the town, you must acknowledge the importance of the 4 main parts of a business plan and inculcate them into your plan. They include the executive summary, marketing plan, financial plan, and key management bios.
• There are other necessary sections of a business plan that you can include in your plan. You can choose to include them if you need to because they must target a specific purpose, function, or audience.
• Don’t compose a boring business plan, make sure you have lots of exciting business ideas for your company. These plans should be listed on your executive summary in order to hook your readers and force them to take action.

Steps to Follow When Creating a Business Plan

• Your first action is to select sections of a business plan, you can make some selections from the 4 main parts of a business plan listed above. Each component should be viable to your business. You can also choose from other parts of a business plan that are not included here.
• Make a rough sketch to determine what you will include in each category of your business plan.
• Get your data and facts ready. These facts and information should be in support of your business plan.
• Fill in each section with the information you discovered. Both the section and its content should be in alignment.
• Lastly, carefully analyze each component with a friend or mentor.

Having known how to create a proper business plan, you can then proceed to choose a business that works for you. A bakery business plan won’t be a bad one to venture into and start making mind-blowing profits. To crown it all, you do not have to run extra work on this plan.

We have handled the hardest part of the job which is to create a compelling business plan. All you need to do is implement our plan in your business and watch it boom. Are you ready to start earning? Grab a copy now!

It is argued that business plans are not crucial but the truth is that every company needs a business plan. To create this business plan successfully, these 4 main parts of a business plan should be followed. When these features are all in check, your business will be healthy.

The structure of a business plan includes an executive summary, an overview of your business, market research and target market, marketing strategy, financial projection and an appendix.

A proper business plan should contain the overall nature of your business and the services you will offer to your customers. Also include the cost of organising the business, revenues and profile to make in the long run.

Yes, you can. A template can serve as a guide if you wish to create your business plan by yourself.

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• Advantages of a Business Plan: Definition and What It Entails

Kenechukwu Muoghalu

Kenny, an accomplished business writer with a decade of experience, excels in translating intricate industry insights into engaging articles. Her passion revolves around distilling the latest trends, offering actionable advice, and nurturing a comprehensive understanding of the business landscape. With a proven track record of delivering insightful content, Kenny is dedicated to empowering her readers with the knowledge needed to thrive in the dynamic and ever-evolving world of business.

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What is a business plan? Definition, Purpose, and Types

In the world of business, a well-thought-out plan is often the key to success. This plan, known as a business plan, is a comprehensive document that outlines a company’s goals, strategies , and financial projections. Whether you’re starting a new business or looking to expand an existing one, a business plan is an essential tool.

As a business plan writer and consultant , I’ve crafted over 15,000 plans for a diverse range of businesses. In this article, I’ll be sharing my wealth of experience about what a business plan is, its purpose, and the step-by-step process of creating one. By the end, you’ll have a thorough understanding of how to develop a robust business plan that can drive your business to success.

What is a business plan?

Purposes of a business plan, what are the essential components of a business plan, executive summary, business description or overview, product and price, competitive analysis, target market, marketing plan, financial plan, funding requirements, types of business plan, lean startup business plans, traditional business plans, how often should a business plan be reviewed and revised, what are the key elements of a lean startup business plan.

• What are some of the reasons why business plans don't succeed?

A business plan is a roadmap for your business. It outlines your goals, strategies, and how you plan to achieve them. It’s a living document that you can update as your business grows and changes.

Looking for someone to write a business plan?

Find professional business plan writers for your business success.

These are the following purpose of business plan:

• Attract investors and lenders: If you’re seeking funding for your business , a business plan is a must-have. Investors and lenders want to see that you have a clear plan for how you’ll use their money to grow your business and generate revenue.
• Get organized and stay on track: Writing a business plan forces you to think through all aspects of your business, from your target market to your marketing strategy. This can help you identify any potential challenges and opportunities early on, so you can develop a plan to address them.
• Make better decisions: A business plan can help you make better decisions about your business by providing you with a framework to evaluate different options. For example, if you’re considering launching a new product, your business plan can help you assess the potential market demand, costs, and profitability.

The executive summary is the most important part of your business plan, even though it’s the last one you’ll write. It’s the first section that potential investors or lenders will read, and it may be the only one they read. The executive summary sets the stage for the rest of the document by introducing your company’s mission or vision statement, value proposition, and long-term goals.

The business description section of your business plan should introduce your business to the reader in a compelling and concise way. It should include your business name, years in operation, key offerings, positioning statement, and core values (if applicable). You may also want to include a short history of your company.

In this section, the company should describe its products or services , including pricing, product lifespan, and unique benefits to the consumer. Other relevant information could include production and manufacturing processes, patents, and proprietary technology.

Every industry has competitors, even if your business is the first of its kind or has the majority of the market share. In the competitive analysis section of your business plan, you’ll objectively assess the industry landscape to understand your business’s competitive position. A SWOT analysis is a structured way to organize this section.

Your target market section explains the core customers of your business and why they are your ideal customers. It should include demographic, psychographic, behavioral, and geographic information about your target market.

Marketing plan describes how the company will attract and retain customers, including any planned advertising and marketing campaigns . It also describes how the company will distribute its products or services to consumers.

After outlining your goals, validating your business opportunity, and assessing the industry landscape, the team section of your business plan identifies who will be responsible for achieving your goals. Even if you don’t have your full team in place yet, investors will be impressed by your clear understanding of the roles that need to be filled.

In the financial plan section,established businesses should provide financial statements , balance sheets , and other financial data. New businesses should provide financial targets and estimates for the first few years, and may also request funding.

Since one goal of a business plan is to secure funding from investors , you should include the amount of funding you need, why you need it, and how long you need it for.

• Tip: Use bullet points and numbered lists to make your plan easy to read and scannable.

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Business plans can come in many different formats, but they are often divided into two main types: traditional and lean startup. The U.S. Small Business Administration (SBA) says that the traditional business plan is the more common of the two.

Lean startup business plans are short (as short as one page) and focus on the most important elements. They are easy to create, but companies may need to provide more information if requested by investors or lenders.

Traditional business plans are longer and more detailed than lean startup business plans, which makes them more time-consuming to create but more persuasive to potential investors. Lean startup business plans are shorter and less detailed, but companies should be prepared to provide more information if requested.

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A business plan should be reviewed and revised at least annually, or more often if the business is experiencing significant changes. This is because the business landscape is constantly changing, and your business plan needs to reflect those changes in order to remain relevant and effective.

Here are some specific situations in which you should review and revise your business plan:

• You have launched a new product or service line.
• You have entered a new market.
• You have experienced significant changes in your customer base or competitive landscape.
• You have made changes to your management team or organizational structure.
• You have raised new funding.

A lean startup business plan is a short and simple way for a company to explain its business, especially if it is new and does not have a lot of information yet. It can include sections on the company’s value proposition, major activities and advantages, resources, partnerships, customer segments, and revenue sources.

What are some of the reasons why business plans don't succeed?

• Unrealistic assumptions: Business plans are often based on assumptions about the market, the competition, and the company’s own capabilities. If these assumptions are unrealistic, the plan is doomed to fail.
• Lack of focus: A good business plan should be focused on a specific goal and how the company will achieve it. If the plan is too broad or tries to do too much, it is unlikely to be successful.
• Poor execution: Even the best business plan is useless if it is not executed properly. This means having the right team in place, the necessary resources, and the ability to adapt to changing circumstances.
• Unforeseen challenges:  Every business faces challenges that could not be predicted or planned for. These challenges can be anything from a natural disaster to a new competitor to a change in government regulations.

What are the benefits of having a business plan?

• It helps you to clarify your business goals and strategies.
• It can help you to attract investors and lenders.
• It can serve as a roadmap for your business as it grows and changes.
• It can help you to make better business decisions.

How to write a business plan?

There are many different ways to write a business plan, but most follow the same basic structure. Here is a step-by-step guide:

• Executive summary.
• Company description.
• Management and organization description.
• Financial projections.

How to write a business plan step by step?

Start with an executive summary, then describe your business, analyze the market, outline your products or services, detail your marketing and sales strategies, introduce your team, and provide financial projections.

Why do I need a business plan for my startup?

A business plan helps define your startup’s direction, attract investors, secure funding, and make informed decisions crucial for success.

What are the key components of a business plan?

Key components include an executive summary, business description, market analysis, products or services, marketing and sales strategy, management and team, financial projections, and funding requirements.

Can a business plan help secure funding for my business?

Yes, a well-crafted business plan demonstrates your business’s viability, the use of investment, and potential returns, making it a valuable tool for attracting investors and lenders.

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Executive Summary

This written guide will help you create a business plan and map out how you will start and run your business successfully.

The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor’s interest.

The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it usually appears first in your business plan document.

Below are several key points that your executive summary should include based on the stage of your business.

If You Are an Established Business

If you are an established business, be sure to include the following information:

• The Mission Statement —This explains what your business is all about. It should be between several sentences and a paragraph.
• Company Information —Include a short statement that covers when your business was formed, the names of the founders and their roles, your number of employees, and your business location(s).
• Growth Highlights —Include examples of company growth, such as financial or market highlights (for example, “XYZ Firm increased profit margins and market share year-over-year since its foundation). Graphs and charts can be helpful in this section.
• Your Products/Services —Briefly describe the products or services you provide.
• Financial Information —If you are seeking financing, include any information about your current bank and investors.
• Summarize future plans —Explain where you would like to take your business.

With the exception of the mission statement, all of the information in the executive summary should be covered in a concise fashion and kept to one page. The executive summary is the first part of your business plan many people will see, so each word should count.

If You Are a Startup or New Business

If you are just starting a business, you won’t have as much information as an established company. Instead, focus on your experience and background as well as the decisions that led you to start this particular enterprise.

Demonstrate that you have done thorough market analysis. Include information about a need or gap in your target market, and how your particular solutions can fill it. Convince the reader that you can succeed in your target market, then address your future plans.

Remember, your Executive Summary will be the last thing you write. So the first section of the business plan that you will tackle is the Company Description section.

Company Description

This section of your business plan provides a high-level review of the different elements of your business. This is akin to an extended elevator pitch and can help readers and potential investors quickly understand the goal of your business and its unique proposition.

What to Include in Your Company Description

• Describe the nature of your business and list the marketplace needs that you are trying to satisfy.
• Explain how your products and services meet these needs.
• List the specific consumers, organizations or businesses that your company serves or will serve.
• Explain the competitive advantages that you believe will make your business a success such as your location, expert personnel, efficient operations, or ability to bring value to your customers.

Next, you’ll need to move on to the Market Analysis section of your plan.

Market Analysis

The market analysis section of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions.

What to Include in Your Market Analysis

• Industry Description and Outlook —Describe your industry, including its current size and historic growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.
• Information About Your Target Market —Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:
• Distinguishing Characteristics —What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?
• Size of the Primary Target Market —In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group?
• How Much Market Share Can You Gain? —What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.
• Pricing and Gross Margin Targets —Define your pricing structure, gross margin levels, and any discount that you plan to use.
• When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix (which we will discuss later).
• Market share
• Strengths and weaknesses
• How important is your target market to your competitors?
• Are there any barriers that may hinder you as you enter the market?
• What is your window of opportunity to enter the market?
• Are there any indirect or secondary competitors who may impact your success?
• What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?
• Regulatory Restrictions —Include any customer or governmental regulatory requirements affecting your business, and how you’ll comply. Also, cite any operational or cost impact the compliance process will have on your business.

Once you’ve completed this section, you can move on to the Organization and Management section of your business plan.

Organization and Management

This section should include: your company’s organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors.

Who does what in your business? What is their background and why are you bringing them into the business as board members or employees? What are they responsible for? These may seem like unnecessary questions to answer in a one- or two-person organization, but the people reading your business plan want to know who’s in charge, so tell them. Give a detailed description of each division or department and its function.

This section should include who’s on the board (if you have an advisory board) and how you intend to keep them there. What kind of salary and benefits package do you have for your people? What incentives are you offering? How about promotions? Reassure your reader that the people you have on staff are more than just names on a letterhead.

Organizational Structure

A simple but effective way to lay out the structure of your company is to create an organizational chart with a narrative description. This will prove that you’re leaving nothing to chance, you’ve thought out exactly who is doing what, and there is someone in charge of every function of your company. Nothing will fall through the cracks, and nothing will be done three or four times over. To a potential investor or employee, that is very important.

Ownership Information

This section should also include the legal structure of your business along with the subsequent ownership information it relates to. Have you incorporated your business? If so, is it a C or S corporation? Or perhaps you have formed a partnership with someone. If so, is it a general or limited partnership? Or maybe you are a sole proprietor.

The following important ownership information should be incorporated into your business plan:

• Names of owners
• Percentage ownership
• Extent of involvement with the company
• Forms of ownership (i.e., common stock, preferred stock, general partner, limited partner)
• Outstanding equity equivalents (i.e., options, warrants, convertible debt)
• Common stock (i.e., authorized or issued)
• Management Profiles
• Experts agree that one of the strongest factors for success in any growth company is the ability and track record of its owner/management team, so let your reader know about the key people in your company and their backgrounds. Provide resumes that include the following information:
• Position (include brief position description along with primary duties)
• Primary responsibilities and authority
• Unique experience and skills
• Prior employment
• Special skills
• Past track record
• Industry recognition
• Community involvement
• Number of years with company
• Compensation basis and levels (make sure these are reasonable — not too high or too low)
• Be sure you quantify achievements (e.g. “Managed a sales force of ten people,” “Managed a department of fifteen people,” “Increased revenue by 15 percent in the first six months,” “Expanded the retail outlets at the rate of two each year,” “Improved the customer service as rated by our customers from a 60 percent to a 90 percent rating”)

Also, highlight how the people surrounding you complement your own skills. If you’re just starting out, show how each person’s unique experience will contribute to the success of your venture.

Board of Directors’ Qualifications

The major benefit of an unpaid advisory board is that it can provide expertise that your company cannot otherwise afford. A list of well-known, successful business owners/managers can go a long way toward enhancing your company’s credibility and perception of management expertise.

If you have a board of directors, be sure to gather the following information when developing the outline for your business plan:

• Positions on the board
• Extent of involvement with company
• Historical and future contribution to the company’s success

Service or Product Line

Once you’ve completed the Organizational and Management section of your plan, the next part of your business plan is where you describe your service or product, emphasizing the benefits to potential and current customers. Focus on why your particular product will fill a need for your target customers.

What to Include in Your Service or Product Line Section

• A Description of Your Product/Service —Include information about the specific benefits of your product or service – from your customers’ perspective. You should also talk about your product or service’s ability to meet consumer needs, any advantages your product has over that of the competition, and the current development stage your product is in (e.g., idea, prototype).
• Details About Your Product’s Life Cycle —Be sure to include information about where your product or service is in its life cycle, as well as any factors that may influence its cycle in the future.
• Intellectual Property —If you have any existing, pending, or any anticipated copyright or patent filings, list them here. Also disclose whether any key aspects of a product may be classified as trade secrets. Last, include any information pertaining to existing legal agreements, such as nondisclosure or non-compete agreements.
• Research and Development (R&D) Activities —Outline any R&D activities that you are involved in or are planning. What results of future R&D activities do you expect? Be sure to analyze the R&D efforts of not only your own business, but also of others in your industry.

Marketing and Sales

Once you’ve completed the Service or Product Line section of your plan, the next part of your business plan should focus on your marketing and sales management strategy for your business.

Marketing is the process of creating customers, and customers are the lifeblood of your business. In this section, the first thing you want to do is define your marketing strategy. There is no single way to approach a marketing strategy; your strategy should be part of an ongoing business-evaluation process and unique to your company. However, there are common steps you can follow which will help you think through the direction and tactics you would like to use to drive sales and sustain customer loyalty.

An overall marketing strategy should include four different strategies:

• A market penetration strategy.
• A growth strategy. This strategy for building your business might include: an internal strategy such as how to increase your human resources, an acquisition strategy such as buying another business, a franchise strategy for branching out, a horizontal strategy where you would provide the same type of products to different users, or a vertical strategy where you would continue providing the same products but would offer them at different levels of the distribution chain.
• Channels of distribution strategy. Choices for distribution channels could include original equipment manufacturers (OEMs), an internal sales force, distributors, or retailers.
• Communication strategy. How are you going to reach your customers? Usually a combination of the following tactics works the best: promotions, advertising, public relations, personal selling, and printed materials such as brochures, catalogs, flyers, etc.

After you have developed a comprehensive marketing strategy, you can then define your sales strategy. This covers how you plan to actually sell your product.

Your overall sales strategy should include two primary elements:

• A sales force strategy. If you are going to have a sales force, do you plan to use internal or independent representatives? How many salespeople will you recruit for your sales force? What type of recruitment strategies will you use? How will you train your sales force? What about compensation for your sales force?
• Your sales activities. When you are defining your sales strategy, it is important that you break it down into activities. For instance, you need to identify your prospects. Once you have made a list of your prospects, you need to prioritize the contacts, selecting the leads with the highest potential to buy first. Next, identify the number of sales calls you will make over a certain period of time. From there, you need to determine the average number of sales calls you will need to make per sale, the average dollar size per sale, and the average dollar size per vendor.

Next, if you are seeking financing for your business, you’ll need to complete the next part of your plan—Funding Request.

Funding Request

If you are seeking funding for your business venture, use this section to outline your requirements.

Your funding request should include the following information:

• Your current funding requirement
• Any future funding requirements over the next five years
• How you intend to use the funds you receive: Is the funding request for capital expenditures? Working capital? Debt retirement? Acquisitions? Whatever it is, be sure to list it in this section.
• Any strategic financial situational plans for the future, such as: a buyout, being acquired, debt repayment plan, or selling your business. These areas are extremely important to a future creditor, since they will directly impact your ability to repay your loan(s).

When you are outlining your funding requirements, include the amount you want now and the amount you want in the future. Also include the time period that each request will cover, the type of funding you would like to have (e.g., equity, debt), and the terms that you would like to have applied.

To support your funding request you’ll also need to provide historical and prospective financial information. Once you have completed your funding request, move on to the next part of your plan—Financial Projections.

Financial Projections

You should develop the Financial Projections section after you’ve analyzed the market and set clear objectives. That’s when you can allocate resources efficiently. The following is a list of the critical financial statements to include in your business plan packet.

Historical Financial Data

If you own an established business, you will be requested to supply historical data related to your company’s performance. Most creditors request data for the last three to five years, depending on the length of time you have been in business.

The historical financial data to include are your company’s income statements, balance sheets, and cash flow statements for each year you have been in business (usually for up to three to five years). Often, creditors are also interested in any collateral that you may have that could be used to ensure your loan, regardless of the stage of your business.

Prospective Financial Data

All businesses, whether startup or growing, will be required to supply prospective financial data. Most of the time, creditors will want to see what you expect your company to be able to do within the next five years. Each year’s documents should include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, you should supply monthly or quarterly projections. After that, you can stretch it to quarterly and/or yearly projections for years two through five.

Make sure that your projections match your funding requests; creditors will be on the lookout for inconsistencies. It’s much better if you catch mistakes before they do. If you have made assumptions in your projections, be sure to summarize what you have assumed. This way, the reader will not be left guessing.

Finally, include a short analysis of your financial information. Include a ratio and trend analysis for all of your financial statements (both historical and prospective). Since pictures speak louder than words, you may want to add graphs of your trend analysis (especially if they are positive).

Next, you may want to include an Appendix to your plan. This can include items such as your credit history, resumes, letters of reference, and any additional information that a lender may request.

The Appendix should be provided to readers on an as-needed basis. In other words, it should not be included with the main body of your business plan. Your plan is your communication tool; as such, it will be seen by a lot of people. Some of the information in the business section you will not want everyone to see, but specific individuals (such as creditors) may want access to this information to make lending decisions. Therefore, it is important to have the appendix within easy reach.

The appendix would include:

• Credit history (personal and business)
• Resumes of key managers
• Product pictures
• Letters of reference
• Details of market studies
• Relevant magazine articles or book references
• Licenses, permits or patents
• Legal documents
• Copies of leases
• Building permits
• List of business consultants, including attorney and accountant

Any copies of your business plan should be controlled; keep a distribution record. This will allow you to update and maintain your business plan on an as-needed basis. Remember, too, that you should include a private placement disclaimer with your business plan if you plan to use it to raise capital.

How to Make Your Business Plan Stand Out

One of the first steps to business planning is determining your target market and why they would want to buy from you.

For example, is the market you serve the best one for your product or service? Are the benefits of dealing with your business clear and are they aligned with customer needs? If you’re unsure about the answers to any of these questions, take a step back and revisit the foundation of your business plan.

The following tips can help you clarify what your business has to offer, identify the right target market for it and build a niche for yourself.

Be Clear About What You Have to Offer

Ask yourself: Beyond basic products or services, what are you really selling? Consider this example: Your town probably has several restaurants all selling one fundamental product—food. But each is targeted at a different need or clientele.

One might be a drive-thru fast food restaurant, perhaps another sells pizza in a rustic Italian kitchen, and maybe there’s a fine dining seafood restaurant that specializes in wood-grilled fare. All these restaurants sell meals, but they sell them to targeted clientele looking for the unique qualities each has to offer. What they are really selling is a combination of product, value, ambience and brand experience.

When starting a business, be sure to understand what makes your business unique. What needs does your product or service fulfill? What benefits and differentiators will help your business stand out from the crowd?

Don’t Become a Jack of All Trades—Learn to Strategize

It’s important to clearly define what you’re selling. You do not want to become a jack-of-all trades and master of none because this can have a negative impact on business growth. As a smaller business, it’s often a better strategy to divide your products or services into manageable market niches. Small operations can then offer specialized goods and services that are attractive to a specific group of prospective buyers.

Identify Your Niche

Creating a niche for your business is essential to success. Often, business owners can identify a niche based on their own market knowledge, but it can also be helpful to conduct a market survey with potential customers to uncover untapped needs. During your research process, identify the following:

• Which areas your competitors are already well established
• Which areas are being ignored by your competitors
• Potential opportunities for your business

Check Your Understanding

Answer the question(s) below to see how well you understand the topics covered in this section. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.

Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.

https://assessments.lumenlearning.com/assessments/195

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What Are the Main Purposes of a Business Plan?

• Understand why a business plan is important and what it needs to accomplish
• This document provides crucial guidance and minimizes the chances that you’ll run into common mistakes
• Business plans can be dynamic documents, useful to both startups and established companies

No business should be launched without a solid plan in place. If you start up a company with the expectation that you’ll develop your strategy along the way, you’re much less likely to succeed. By contrast, a well-crafted business plan can help you outline your company’s goals, secure funding from investors, map a path to growth, and attract talented employees.

Here are some of the main purposes a business plan should address before you launch a business:

Set your purpose and prepare for launch

A business plan sets out your purpose for starting a company , including the market needs you hope to meet and what products or services you plan to offer. It also outlines all aspects of how you plan for your company to be successful, such as financial forecasts and a marketing strategy.

Starting a business is a complex task, but the business plan helps you make it more manageable by breaking it down into more manageable steps. A business plan also makes for a smoother rollout of a company , since you’ll have a guide for how to operate and address any problems that might come up.

Determine feasibility

Countless people have rushed the launch of their business, convinced that their idea is a surefire guarantee of success. A business plan ensures that you’ll take a more cautious approach and won’t waste your time and money on a questionable idea.

Market research is a critical component of a business plan, letting you identify customers, competitors, and industry needs. This information allows you to identify any challenges you need to address, such as determining whether you have enough capital to sustain the business in its early stages or whether you’re pricing your products correctly.

A business plan can also identify whether your idea is feasible. In some cases, you may be dissuaded from pursuing an idea after determining that there aren’t enough customers, the market is already saturated with competitors, or other factors make your idea unsustainable.

Set goals and guide your decisions

Part of the business plan involves setting goals you hope to achieve or benchmarks you need to reach. This can help you maintain your focus and guide critical decisions.

For this reason, the business plan remains valuable even after you’ve established your company. It can be a dynamic document, helping you determine what goals you’ve achieved, what changes you need to make, what new markets you might be able to break into, and more.

Secure financing

Most entrepreneurs don’t have an enormous pool of money to draw on, and will require financial assistance to get their company going. A business plan helps assure lenders and investors that you have a strategy for how you’ll find success, minimizing the risk of a default or poor investment. This, in turn, increases the possibility that a lender or investor will assist your venture.

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Do You Really Need a Business Plan?

Are you wondering if you need a business plan? Business plans are very important tools for everyone to use.

A clear plan for your business can help it blossom and grow. 

While some things can be changed along the way, a solid business plan can build your business upon sturdy foundations. Here are some purposes of a business plan!

Understand Your Goals and Objectives

Business plans serve an essential purpose in helping entrepreneurs understand their goals and objectives. A clear business plan includes a well-defined purpose, a vision for success, and realistic expectations of what can be achieved.

It also includes milestones that need to be met, an understanding of the target audience, and a detailed budget. All of these are necessary for success in any business venture.

The more detailed the plan, the better entrepreneurs will understand what they need to do to reach their goals. Ultimately, a business plan is essential to the success of any enterprise.

Decide Whether You Need Financing

When deciding whether you need financing, a business plan is incredibly important. Generally, if you seek financings, such as a bank loan, investors, or business partners, you will need a business plan or hire a  business plan writing service .

Your business plan will outline your:

• business operations
• financial projections

These are necessary to demonstrate to potential financiers how you will use the funds you seek.

A business plan that shows your potential financiers a clear plan for how you will use the funds can be the difference between getting the financing you need and not. Ultimately, a business plan is key if you are trying to decide if you need financing.

Outlining the Major Components of a Business Plan

Whether starting a new business or launching a new venture, you should know the importance of a business plan.

Fully outlining the major components of a business plan can help you effectively produce one and provide you with both a roadmap for getting started and an overview of the overall strategy for your business.

The major components of a business plan include the following:

• executive summary
• product/service offering
• market analysis
• customer segmentation
• sales/marketing/pricing strategies
• operational requirements
• team members
• operational structure
• financial summary

These components should be included in a business plan to ensure that the business has a clear and effective strategy for growth. With a business plan, you can accurately assess the risks, plan for the uncertainties, and establish a road to growth.

Consider the Pros and Cons of Business Plans

A business plan helps to define and clarify goals, determine potential obstacles, assess potential risks, and track progress against targets. It can also help build credibility with potential investors, showing that the business has been properly thought through and organized.

On the other hand, the cons include the time it takes to create such a document, the cost involved and ongoing maintenance, and the fact that it often requires assumptions to be made. All of these factors can be a roadblock to success. 

Find Purposes of a Business Plan

Having the purposes of a business plan matters more than ever in the current climate.

Writing one may take more time than expected but having it will help boost your business and chances of success. Invest in your plan now, and you will reap the rewards.

Did you find this article helpful? Check out the rest of our blog. 

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If you don’t pay enough tax through withholding and estimated tax payments, you may have to pay a penalty. You also may have to pay a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return.

Estimated tax requirements are different for farmers, fishermen, and certain higher income taxpayers. Publication 505, Tax Withholding and Estimated Tax , provides more information about these special estimated tax rules.

Who must pay estimated tax

Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.

Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when their return is filed.

You may have to pay estimated tax for the current year if your tax was more than zero in the prior year. See the worksheet in Form 1040-ES, Estimated Tax for Individuals  for more details on who must pay estimated tax.

Who does not have to pay estimated tax

If you receive salaries and wages, you can avoid having to pay estimated tax by asking your employer to withhold more tax from your earnings. To do this, file a new Form W-4 with your employer. There is a special line on Form W-4 for you to enter the additional amount you want your employer to withhold.

If you receive a paycheck, the Tax Withholding Estimator will help you make sure you have the right amount of tax withheld from your paycheck.

You don’t have to pay estimated tax for the current year if you meet all three of the following conditions.

• You had no tax liability for the prior year
• You were a U.S. citizen or resident alien for the whole year
• Your prior tax year covered a 12-month period

You had no tax liability for the prior year if your total tax was zero or you didn’t have to file an income tax return. For additional information on how to figure your estimated tax, refer to Publication 505, Tax Withholding and Estimated Tax .

How to figure estimated tax

Individuals, including sole proprietors, partners, and S corporation shareholders, generally use  Form 1040-ES , to figure estimated tax. Nonresident aliens use Form 1040-ES(NR) to figure estimated tax.

To figure your estimated tax, you must figure your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year.

When figuring your estimated tax for the current year, it may be helpful to use your income, deductions, and credits for the prior year as a starting point. Use your prior year's federal tax return as a guide. You can use the worksheet in Form 1040-ES to figure your estimated tax. You need to estimate the amount of income you expect to earn for the year. If you estimated your earnings too high, simply complete another Form 1040-ES worksheet to refigure your estimated tax for the next quarter. If you estimated your earnings too low, again complete another Form 1040-ES worksheet to recalculate your estimated tax for the next quarter. You want to estimate your income as accurately as you can to avoid penalties.

You must make adjustments both for changes in your own situation and for recent changes in the tax law.

When to pay estimated taxes

For estimated tax purposes, the year is divided into four payment periods . Each period has a specific payment due date. If you don’t pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.

If a payment is mailed, the date of the U.S. postmark is the date of payment. If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that isn’t a Saturday, Sunday or holiday.

How to pay estimated taxes

You may send estimated tax payments with Form 1040-ES  by mail , or you can pay online , by phone or from your mobile device using the IRS2Go app . You can also make your estimated tax payments through your online account, where you can see your payment history and other tax records. Go to IRS.gov/account . Visit IRS.gov/payments to view all the options. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax .

Using the Electronic Federal Tax Payment System (EFTPS) is the easiest way for individuals as well as businesses to pay federal taxes. Make ALL of your federal tax payments including federal tax deposits (FTDs), installment agreement and estimated tax payments using EFTPS . If it’s easier to pay your estimated taxes weekly, bi-weekly, monthly, etc. you can, as long as you’ve paid enough in by the end of the quarter. Using EFTPS, you can access a history of your payments, so you know how much and when you made your estimated tax payments.

Corporations must deposit the payment using the Electronic Federal Tax Payment System . For additional information, refer to Publication 542, Corporations .

Penalty for underpayment of estimated tax

If you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers, fishermen, and certain higher income taxpayers. Please refer to Publication 505, Tax Withholding and Estimated Tax , for additional information.

However, if your income is received unevenly during the year, you may be able to avoid or lower the penalty by annualizing your income and making unequal payments. Use Form 2210,  Underpayment of Estimated Tax by Individuals, Estates, and Trusts  (or Form 2220, Underpayment of Estimated Tax by Corporations ), to see if you owe a penalty for underpaying your estimated tax. Please refer to the  Form 1040 and 1040-SR Instructions  or Form 1120 Instructions PDF , for where to report the estimated tax penalty on your return.

The penalty may also be waived if:

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15 Communication Plan Templates for Professional Use (2024)

Written by: Orana Velarde

Communication plans can help you deliver information timely and effectively to stakeholders in various situations — from a PR crisis to a new product launch. They are excellent tools to share with your team and prepare them to communicate properly in any given situation.

If you're intimidated by the idea of creating a communication plan from scratch, it's okay. You can simply use a pre-designed communication plan template to speed up the process.

We've put together a list of 15 professional communication plan examples for various use cases.

The best part?

You can edit these communication plan templates online and download them or share them with your team.

Here's a short selection of easy-to-edit Communication plan templates you can edit, share and download with Visme. View more below:

Just choose the category from the list below that best describes your needs and start designing a successful communication strategy.

15 Communication Plan Templates for Professionals

Template #1: strategic communication plan, template #2: crisis communication plan, template #3: it communication plan, template #4: project management communication plan, template #5: internal communication plan, template #6: event communication plan, template #7: simple communication plan, template #8: change management communication plan, template #9: stakeholder communication plan, template #10: donor communication plan, template #11: school communication plan, template #12: emergency communication plan, template #13: marketing communication plan, template #14: product launch communication plan, template #15: diversity and inclusion communication plan, frequently asked questions (faqs).

Before you start scrolling, here’s a video on how to create attractive documents with Visme to get your creative juices flowing.

Strategic communication plans are essential documents that corporations, organizations and companies use to maintain stable and constant communication with their audiences. Below is an example of a communication plan template you can use to streamline communication.

This sleek strategic communication plan uses contrasting desaturation with bright colors to bring attention to the content. The placeholder sections in the table of contents include:

• Executive Summary
• Situational Analysis
• Demographics

Adding your content is easy as all you have to do is copy and paste into the template and adjust as needed. If you want to add pages with a type of graph or more text content, just duplicate a page. Use the same colors as the rest of the design to have a balanced look and feel.

And if you’re short on time, you can use the Visme AI document generator to generate your communication plans or any other document in a matter of seconds. Just type in your prompt, provide a bit more context, select your preferred design and watch the tool produce your first draft in seconds.

Check out how the AI document generator tool works.

Every startup, company or enterprise is bound to have a moment of crisis to deal with. It could be an unhappy customer or a global pandemic. For that reason, you need a crisis communication plan to specify actionable practices in any crisis.

Create your own Communication Plan with this easy-to-edit template! Edit and Download

With crisis communication plan templates like this one, all involved parties have access to the necessary information. Our designers have put together a collection of pages and sections to get you started, including:

• Crisis Communication Policy
• Crisis Command Center Team
• CCC Activation Hierarchy
• Media Liaison

To personalize your brand’s communication plan, simply change the colors and fonts using your Brand Kit . If you need more pages for more key messaging sections, it’s easy to duplicate the pre-designed pages and add your content.

You’ll need to adjust the layout a bit, so the pages don’t look the same. Change the image background for another and customize the text boxes and icons to match your content.

Here’s another great example of a communication plan. Share your project ideas and future goals effectively with our easy-to-use IT communication plan template. It's designed to help you choose the right communication channels and strategies for your IT projects.

The communication template has a bold dark and red design theme that sets a powerful visual tone. With eye-catching visuals and straightforward layouts, this template makes it simple to present your project proposals, timelines, and resource allocation.

Collaborating with your team becomes a seamless experience, ensuring that your message is conveyed accurately and efficiently to all stakeholders.

Upgrade your project communication with this attention-grabbing dark and red-themed IT communication plan template, and make a lasting impression while conveying your ideas and goals with impact.

Is your team working on a project together and you need to keep everything in check and on track? Are you looking for a way to let everyone know what needs to be done and when?

This project management communication plan sample is just what you need as the basis of your action plan.

Be clear and direct about what needs to be done, by whom and when. Putting it all in this project management communication framework template is going to create transparency within your team.

Your job as a project manager is to make sure everything is taken care of correctly and on time. When you use project communication plan templates like this one, your success rates go up.

Use the table of contents in this project management plan to outline all necessary information and key messaging. Explain how and when deliverables are to be expected and who are the key stakeholders in the process.

Link to collaboration channels and give instructions on how to use them best. Give instructions on how to name files and where everything is stored in the cloud.Use the Visme workflow tool to assign and manage each task, set deadlines and review and approve projects—all within your workspace.

Working on a project together takes careful planning. A project manager needs to ensure that everyone knows what’s expected of them and who to contact about different things.

If you’re a project manager or are in charge of an internal project for your company, this internal communications strategy template is just what you need to keep the team on track.

Our professionally designed internal communication plan is easy to use and customize with your content. The sections are separated as follows:

• Stakeholders
• Implementation
• Team Involved

If you plan to share your communication plan as a digital PDF, add links to the respective pages. This way, the reader can navigate to their desired content from the table of contents .

Use the timeline feature in the implementation section to visually schedule the tasks for the project. If you need to make the timeline longer, simply duplicate the page. Customize the colors and fonts for your brand using your Brand Kit.

Simplify the process of planning, organizing, and executing your events with our outstanding event communication plan template.

This complete communication strategy template comes equipped with step-by-step instructions, enabling you to seamlessly coordinate crucial event particulars, create detailed timelines, and ensure your guests are well-informed, all within a single platform.

Featuring captivating visuals, contemporary fonts, and customizable color schemes, this template not only enhances the functionality of your event communication plan. The rich blend of serene blues, pristine whites, and vibrant pinks also adds an aesthetic touch that will leave a lasting impression.

Add flipbook effects so readers can interact with the document as if they are reading a book. Make event planning a breeze while keeping everything visually appealing with this versatile template.

Communications planning doesn’t always need to be complicated. A simple communication plan will do the job for any small project. All you need for effective communication is the key messaging and the relevant links to the preferred communication channels.

This corporate communication plan template is simple and keeps things to only two pages. It effectively uses icons , progress bars and a table format to visualize possible situations of crisis and the appropriate response to each situation.

You can remove the cover page and download your communication plan as a single-page infographic . Or you can add more pages to turn it into a more comprehensive document.

If you’ve ever had to change something inside a company, you know how difficult it can be to it seamlessly. Change can be about a piece of software, a physical working location, a process or system.

A change management communication plan will help everyone involved in the transition by making sure they’re all on the same page.

This change management communication plan designed by our Visme designers uses placeholder content for a change in CRM. The sections apply to any type of change and are:

• Summary: What is changing and why?
• Stakeholders: Who is involved in the change and how?
• Phases: How will the change take place with the help of a timeline?

This is the perfect communication plan template to help your team change something seamlessly without affecting other aspects of your work.

When working on your plan, use Visme’s shortcut tool to easily find anything you want in the editor. Simply type forward slash (/) on your keyboard and search bar will appear. Type in a keyword to easily find design assets, tools and features in the Visme editor.

Having many stakeholders aiming for the same goal requires good organization and planning. Make sure everyone’s on board with this stakeholder communication plan example.

This professionally designed template offers all the pages you need to organize the information for your stakeholders. Share everything they need to know about your company, the goals, objectives, changes, projections and more.

Plus, share all relevant information like the dates for team meetings, a project roadmap , and the manager’s phone number.

If you need more pages than the template provides, simply duplicate and add your content in text boxes. Also, maintain a visual balance in the general look-and-feel of the page.

To keep the communication plan easy to read and understand, link to longer content with popups or external hyperlinks. Make sure to share the finished communication plan as a digital PDF file.

A well-planned donor communication strategy is essential to the success of any fundraising campaign. With our user-friendly template, you can impress your donors and streamline your fundraising efforts. This comprehensive tool includes easy-to-follow sections for outlining your donor engagement strategy, establishing effective communication channels and tracking the progress of your campaigns.

Our template features engaging graphics and icons, sleek fonts, and customizable colors that not only make it visually appealing but also allow you to tailor it to your organization's unique branding.

Every part of this template is customizable. With Visme’s intuitive editor, you can change colors, fonts and more to fit your branding. Elevate your fundraising endeavors and make a lasting impression on your valued supporters with this visually captivating and user-friendly template.

Ensuring that all communication levels are clear and concise within a school setting can be difficult without a communication plan. That's because precise instructions and direction are often essential for teachers, staff, parents and managerial positions.

Our school communication plan sample was created especially for you by our Visme designers. The three main sections cover communication strategies at three different levels:

• Academic Communication
• Staff Communication
• School-Wide Communication

Customize the tables with your school colors and input your specific information into the cells. Make your communication plan interactive by adding links to the correct communication channels for direct messaging and virtual or in-person meetings, and then share it online.

An effective emergency communication plan is vital for ensuring the safety and well-being of your team members. When a disaster strikes, a well-structured and thorough plan can ensure swift, coordinated responses and minimize risks.

Prepare your organization for emergency situations by sharing proven methods and solutions with this invaluable template. This stunning and user-friendly template simplifies the process, allowing you to outline essential procedures, contact information, and crucial resources. It provides indispensable guidance to your personnel in times of crisis, ensuring they are well-prepared and can respond effectively when needed most.

What makes this template shine are the striking images, visuals and design elements. In Visme’s library, you’ll find tons of visuals and design assets to communicate your ideas. Feel free to swap the template color theme to match your branding.

Need help writing or proofreading content for your plan? Visme’s AI writer is your handy assistant. All you need to do is write an accurate prompt that reflects your need and watch the magic happen.

Marketing and social media campaigns are successful when everyone involved knows what their part is in the process and what their tasks are. Setting every team member up with the information they need to reach a common goal is the primary purpose of this marketing communication plan.

This marketing communication plan example has a colorful, modern feel. Circles form a big part of the visual layout, making the content easier to digest and more interesting to look at.

In this marketing communication plan template, there are four sections for your key messaging:

• Goal and Objectives
• SWOT Analysis

The SWOT analysis page is a practical guide to see where your project has weaknesses and what strengths will pull it through. On the last page, you’ll find a timeline to help keep every team member on track of their tasks and in what timeframe.

Easily customize the template to match your brand by using your Brand Kit. Share the template with team members to get feedback and collaborate on the final design. Track how many people have viewed or taken action on your plan using our analytics feature .

When launching a new product, it’s good practice to work as a team. The best way to make sure all the pre-launch tasks are taken care of is to create a product launch communication plan.

In the six pages of this attractive product launch communication plan, you can lay out all the steps for your product’s pre and post-launch activities.

Use the timeline page to explain in detail what needs to happen. Specify which communication teams take care of what tasks, like the press release and influencer outreach emails.

Use hyperlinks to more in-depth content for specific teams and don’t forget to share the links to relevant communication platforms.

Use the sections set up for you in the template or create your own. Your key messaging will probably be similar to this but it’s easy to personalize or add more.

• Launch Phases
• Pre-Launch Activities
• Post-Launch Follow Up

Make sure to include the steps for recording post-launch metrics as these are just as important as the ones done pre-launch. Plus, measurable insights can help with other product launch projects in the future.

Achieving diversity and inclusion in the workplace requires a clear and comprehensive communication plan. A plan will serve as a strategic framework to promote diversity and inclusion initiatives across your organization.

This remarkable, fully customizable template is your compass for systematically advancing diversity, equity, and inclusion within your organization. The template has a clean and creative design layout with high-quality images and graphics that add visual excitement.

The eye-catching images are carefully selected to support your narrative and enhance the overall aesthetic of your plan. With its captivating design, you can effortlessly engage your entire workforce, presenting your vision, initiatives, and progress with impact and clarity.

There are multiple options for sharing your plan with stakeholders. You can share it online with a link or embed it on your website or landing page. Alternatively, you can download it in multiple formats.

Design Your Own Communication Plan Online

Creating a communication plan is easy when you have practical and inspiring templates to guide you. To get started with designing your communication plan, simply choose the template that best fits your vision and input your content.

If you're new to Visme, use one of the free templates and adjust the content accordingly. That said, you’d be surprised at what you can do with a premium Visme subscription .

With a premium subscription, not only will you get access to premium templates and graphic assets, you'll also be able to create any type of visual — from documents and presentations to infographics, charts, surveys, social media graphics and more.

You'll also be able to download your designs in multiple formats, from image to PDF to HTML5, work in collaboration with your team, create a Brand Kit and much more.

Ready to get started? Sign up for a free Visme account today and create a great-looking, comprehensive communication plan to share with your team.

Are you still weighing your options about creating a communication plan? Hopefully, the templates on this list inspired you to take a look and give them a try.

But you might still need a little help deciding if this is a suitable document for what you need. That’s why we’ve put together the most common questions asked about communications plans.

Q1. What is a communication plan?

A communication plan is a strategic document that shares coordinated, consistent and directed messaging for achieving a specific goal, such as managing a PR crisis or successfully launching a new product.

A communication plan can be printed, sent via email as a PDF or shared as a live online link. A well-structured and effective communication plan is the single most crucial factor of project management in any industry and for every use case.

Q2. What is the purpose of a communication plan?

The primary purpose of a communication plan is to deliver consistent information about a shared goal. It keeps everyone on the team on the same page about what needs to be done, how and when.

A communication plan solves many problems that teams usually face when there’s no clear direction for everyone involved. With a clear communication plan, everything is explained in detail and easy to follow.

All communication needs are laid out in detailed sections covering topics from goals and objectives to timelines and schedules . A communication plan brings together all the communication channels into one single document. From there, team members can spread out through relevant links and supplementary documents.

Q3. What’s included in a communication plan?

Every communication plan example is different, just how every project is different. But what remains the same across the majority of communication plans is the relevant and strategic information.

A standard communication plan includes sections like:

• Short and long-term goals for the project.
• A set of key messages to be explained in detail, separated into sections.
• Strategies for communication, both in-house and outbound.
• Details about the people involved in the project.
• A schedule and timeline for specific events, deadlines and reporting.
• Further communication methods.
• Specific instructions about your company’s communication process.
• Strategies for measuring success.

Apart from the list above, a communication plan must also include details pertinent to the specific project. If there are folders or systems that people need to access for the project’s success, list them and explain how to use them.

Q4. What is the first step in communication planning?

The first step in communication planning is to define the goals you and your team want to achieve. Outline both short and long-term goals so it’s easier to plan the project as pieces of a whole.

Following the goals, set the objectives. Explain how you plan to achieve these with the help of timelines, schedules, and tables. Include a list of involved stakeholders and links to further means of collaboration.

Q5. What are the key messages of a communication plan?

A communication plan’s specific key messages will depend on what you want to achieve and who your target audience is. Your key messages are the most essential communication points for any particular project.

For example, let’s say you’re creating a communication plan for a product launch. The key messages would cover;

• The goals and objectives of the product launch.
• The reason and story about why this product was created and what problem it solves for people.
• A timeline of pre-launch activities including who will be contacted for outreach and what information will be shared with them.
• What messaging and visual strategies to use for social media and advertising.

An excellent way to make sure all key messaging is clear is to add each one as an item in the Table of Contents.

Q6. What’s the best tool to create a communication plan online?

If you want to create a communication plan that makes an impact, use Visme! Our professionally designed communication plan templates will look amazing with your content and be super easy to customize.

With a Visme communication plan, you can include data visualizations using data from a Microsoft Excel sheet. In fact, if you’ve been creating project communication plans in an Excel spreadsheet, it’s time to upgrade your communication efforts!

Knock your team out of their seats with your impactful communication plan!

Head over to Visme's professional document creator and look through the template library, or click on any of the communication plan template buttons in the list above.

Q7. How to Write a Communications Plan

• Audit Your Existing Communication Plan: Before you put pen to paper, do a situational analysis of communications in your company. The goal is to identify gaps, problem areas and opportunities for improvement.
• Set SMART Goals: Based on the audit results, highlight SMART goals you want to achieve with your communications plan. An example of a SMART communication goal would be to improve client response time to complaints from six hours to three hours within the next 2 months.
• Identify Your Target Audience: Are you working with media outlets, customers, partners, investors, employees, customers or the government? Understand who your intended audience is. Consider their demographics, interests, needs, and communication preferences. This will help you tailor your messages and select appropriate channels.
• Communication methods, both in-house and outbound.
• Team members responsible for delivering communication
• Escalation plan
• Communication channels
• Choose appropriate and effective channels: Consider using a combination of channels such as email, meetings, presentations, the intranet, newsletters, social media, or face-to-face interactions. Adapt your channels based on the nature of the message and the preferences of your audience.
• Assign responsibilities: Determine who will be responsible for executing different aspects of the communication plan. Assign roles and responsibilities to team members or stakeholders involved in the process. Clearly define each person's tasks and deliverables.
• Set a timeline for execution. It's important to have a rough estimate of the time required for each step in implementing your strategy. For example, if your plan involves sharing information from top-level management to employees, it's wise to consider the duration it will take to go through the chain of command.
• Regularly review and assess your communication plan's performance : Evaluate the effectiveness of your messages, channels, and activities. Identify areas for improvement and make adjustments accordingly.

Q8. What are the Top Communication Planning Tips?

When it comes to communication planning, here are some tips to ensure effective and successful communication:

• Define clear objectives and identify the target audience: Whether it's providing information, generating buy-in, or addressing concerns, having clear objectives will guide your communication strategy. Understanding who your target audience is will help you tailor your communications to their needs, interests, and preferences.
• Be consistent and transparent: Maintain consistency in your messaging across different channels and ensure transparency throughout the change process. Share relevant information, progress updates, and any challenges or risks involved. This helps build trust and credibility with your audience.
• Engage leaders and influencers: Leverage the support of influential leaders and stakeholders within the organization. Engage them early on and involve them in the planning process to help drive change and promote a culture of open communication.
• Establish a feedback loop: Create channels for employees to share their thoughts, concerns, and suggestions. Actively listen and respond to feedback to build trust and engagement.
• Evaluate and Adapt: Gather feedback, track engagement, and assess whether your communication objectives are being met. Use the insights gained to adapt and refine your communication plan as needed.

Q9. How to Use Communication Plan Templates

To effectively use communication plan templates, follow these steps:

Choose a suitable template: Select a communication plan template that aligns with your specific needs and goals. Visme has a comprehensive library of templates that provide a comprehensive structure and include sections relevant to your project or initiative.

Gather relevant information: Collect the necessary information to complete each section of the template.

This may include objectives, target audience details, key messages, communication channels, timelines, budgets, and evaluation methods. Refer to existing documentation, conduct research, and consult with stakeholders as needed to gather accurate and relevant information.

Customize the template: Tailor the template to fit your specific requirements.

• With Visme's intuitive editor, you can easily modify section headings, add or remove sections as needed, and adapt the content to align with your project or organization.
• Customize the visual elements of the template to match your branding or style guidelines by adding your logo, adjusting colors, and modifying fonts.
• Access a rich library of images, videos and design assets to make your plan visually appealing.
• Automatically generate and incorporate captivating images, art, and graphics into your plan using Visme’s AI image generator .

Share and collaborate: Share the completed communication plan with relevant team members and stakeholders using Visme's collaboration features . Encourage them to provide feedback, input, and suggestions for improvement.

Implement and monitor : Implement the communication plan and monitor the progress and effectiveness of your communication efforts. Make adjustments as needed based on feedback, data, and changing circumstances.

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Published: 22 December 2023 Contributors: Amanda McGrath, Alexandra Jonker

Corporate social responsibility (CSR) is the idea that businesses should operate according to principles and policies that make a positive impact on society and the environment.

Through CSR, companies make decisions driven by financial gain and profitability, and the impact of their actions on their communities and the world at large. CSR goes beyond legal obligations: by voluntarily adopting ethical, sustainable and responsible business practices, companies seek to deliver benefits to consumers, shareholders, employees and society.

Learn about the processes used to manage environmental performance data and the steps required to account for greenhouse gas (GHG) emissions.

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Often, a company’s business model and practices are built around financial goals. However, CSR programs encourage business leaders to consider corporate citizenship or the larger impact of the business on society when making decisions. Corporate social responsibility helps companies ensure that their operations are ethical, safe and delivering positive impact wherever possible. Through CSR initiatives, companies work to limit environmental impact, contribute to solving societal problems (such as poverty and inequality) and ensure their brand identity reflects their values.

The theory of the “ triple bottom line ” can help organizations as they pursue corporate social responsibility. As a financial framework, the triple bottom line refers to the idea that a company’s business model should revolve around the three P’s: people, planet and profit. By maximizing all three, a company aims to make a positive impact on the world and remove barriers to growth.

Corporate social responsibility initiatives generally fall into four categories: environmental, ethical, philanthropic and economic. Each type of CSR contributes to a company’s overall CSR strategy.

More companies are assessing their overall environmental impact and engaging in CSR efforts that aim to protect natural resources and minimize any contribution to climate change. CSR encourages sustainability in business through eco-friendly practices, such as by reducing energy consumption, using renewable resources and minimizing waste.

Environmental responsibility hinges on eliminating negative impacts of business operations (primarily through limiting pollution-causing activities) as well as offsetting them through actions such as planting trees and engaging in programs that support biodiversity.

CSR initiatives often focus on social impact and human rights concerns, such as ensuring fair wages, safe working conditions and proper treatment of employees and suppliers. They also encourage accountability both internally and externally. Ethical CSR may include abiding by fair labor practices, ending workplace discrimination and ensuring supply chain transparency.

CSR practices include donating money, resources or time to positive causes and organizations, such as local and national charities, educational programs, disaster relief and more. Businesses who adopt philanthropic CSR engage with the communities where they operate, offering support through volunteer work, sponsoring local events, making contributions to local nonprofits or supporting skills training programs.

Corporate social responsibility involves ensuring that money is not a company’s sole motivator. To demonstrate this, companies enact policies and procedures to make sure their choices align with values, even if the alternatives may save money or boost profitability. Economic CSR also includes efforts to support the economic development and growth of the communities in which a business operates—for example, supporting job training and job creation efforts and forging local partnerships.

The benefits of CSR include:

CSR can have a positive impact on an organization’s brand identity as well as its bottom line. Some CSR efforts, such as improving energy efficiency, can reduce operating costs and might lead to savings in the end. Consumers increasingly prefer brands that share their values, and CSR policies offer ways for organizations to demonstrate those values, building trust and loyalty to fuel a competitive advantage.

CSR can also help attract top talent and drive employee engagement and retention, as more workers seek employers whose values align with their own. Additionally, a proactive approach to ethical and social issues has the potential to prevent legal problems, fines and reputational damage.

CSR initiatives can help people become more responsible consumers, making it easier for them to access products and services that align with their values and educating them on issues of sustainability and ethical consumption. It can encourage companies to prioritize and invest in testing, quality control and safety measures. CSR can also minimize the likelihood of defective or harmful products reaching consumers.

CSR can have a positive impact on the overall health of the planet, as it encourages environmental responsibility and sustainable practices. CSR initiatives can help companies reduce their greenhouse gas emissions or pursue net-zero emissions goals that are key to slowing climate change. They might also help conserve natural resources, reduce pollution and limit disruption of ecosystems. Additionally, a focus on CSR can support investment in research and development of eco-friendly products and practices.

Corporate social responsibility can help support local communities and address societal issues, such as poverty, inequality and environmental concerns. CSR initiatives can fuel economic growth by creating jobs. They can also shape public opinion as companies leading the way inspire others to follow suit, creating a positive ripple effect. A focus on ethical behavior at the corporate level reinforces a broader norm of ethical behavior across other parts of society.

Consumers are increasingly seeking products and services from socially responsible companies. Meanwhile, many investors are prioritizing companies whose values are clear and aligned with their own. To meet these demands, businesses are integrating CSR into their operations. In addition, global expansion and the increasingly interconnected nature of supply chains pushes companies to comply with a growing web of regulatory environments and to better confront the impact of their business on communities around the world.

With increased awareness of environmental issues, labor practices and ethical concerns, combined with better research and communication, CSR is now more central to business strategies. Some companies even have dedicated CSR departments.

Examples of CSR include:

• Donating a percentage of profits to environmental or social causes
• Committing to using recycled and eco-friendly materials
• Sourcing fair-trade materials and ingredients
• Engaging in social activism or fundraising on behalf of social causes
• Using technology such as artificial intelligence (AI) to drive energy efficiency and reduce carbon footprints
• Creating programs for the ethical use and disposal of products, such as electronics recycling programs
• Instituting diversity, equity and inclusion (DEI) programs that support efforts to diversify and grow the workforce in new ways
• Supporting programs that replenish the natural resources, such as water or timber, used for production
• Turning to renewable energy sources and other strategies that help in the pursuit of net-zero or carbon-neutral goals
• Establishing employee well-being programs that support their physical and mental health

Corporate social responsibility is the overall ethos that drives a company to adopt policies and practices that support sustainability, societal and other ethical ends. Environmental, social and governance (ESG) is about the ways in which their impact is measured or quantified. While both CSR and ESG are about reflecting the company’s values, CSR is typically seen as more of an internal framework, while ESG frameworks are often used externally as a way of demonstrating real-world impact.

Because the parameters of corporate social responsibility are continually evolving, there is no single standard by which CSR initiatives are measured or governed. Companies that embrace CSR are guided by local and international laws, including environmental regulations, labor rules and consumer protection standards.

Some efforts are also held to industry-specific standards; for example, the Global Reporting Initiative (GRI) provides reporting standards for sustainability. Organizations like the United Nations have introduced global guidance, such as the Sustainable Development Goals (SDGs), which encourage businesses to adopt sustainable practices.

Many companies that embrace CSR will also engage in CSR reporting , through which they document performance of non-financial metrics and provide transparency on social and environmental impact. CSR reporting is typically voluntary; however, some jurisdictions mandate that large organizations disclose social and environmental performance, so that investors and consumers can assess CSR efforts.

Some organizations have designated corporate social responsibility teams that oversee a company's CSR activities. People on these teams plan and run the social and environmental programs that align with the company's values and goals. They work with company leadership to devise the overall CSR strategy and engage stakeholders, including employees, customers, investors and community partners, to help them succeed. They also typically track and report on their progress by using metrics and other methods of assessment, deal with compliance and regulatory issues and manage communication about the company’s CSR efforts both internally and externally.

Simplify the capture, consolidation, management, analysis and reporting of your environmental, social and governance (ESG) data.

CSR reporting is the practice of reporting an organization’s performance of non-financial metrics, providing transparency on the organization’s impact on society and the environment.

Net zero is the point at which greenhouse gases emitted into the atmosphere are balanced by an equivalent amount removed from the atmosphere.

The goal of the CRSD is to provide transparency that will help stakeholders better evaluate EU companies’ sustainability performance as well as the related business impacts and risks.

The triple bottom line (TBL) is a sustainability framework that revolves around the three P’s: people, planet and profit.

Sustainability in business refers to a company's strategy and actions to eliminate the adverse environmental and social impacts caused by business operations.

Decarbonization is a method of climate change mitigation that reduces greenhouse gas (GHG) emissions, as well as removes them from the atmosphere.

Simplify the capture, consolidation, management, analysis and reporting of your environmental, social and governance (ESG) data with IBM Envizi ESG Suite.

How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

Download a free SBA-approved business plan template built for small businesses and startups.

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

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

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

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

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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How to Create a Social Media Marketing Strategy in 9 Easy Steps [Free Template]

Creating your social media marketing strategy doesn’t need to be painful. Create an effective plan for your business in 9 simple steps.

A social media marketing strategy is a summary of everything you plan to do and hope to achieve on social media. It guides your actions and lets you know whether you’re succeeding or failing.

The more specific your plan is, the more effective it will be. Keep it concise. Don’t make it so lofty and broad that it’s unattainable or impossible to measure.

In this post, we’ll walk you through a nine-step plan to create a winning social media strategy of your own. We’ve even got expert insights from Amanda Wood, Hootsuite’s Senior Manager of Social Marketing.

How to create a social media strategy:

Bonus: Get a free social media strategy template   to quickly and easily plan your own strategy. Also use it to track results and present the plan to your boss, teammates, and clients.

What is a social media marketing strategy?

A social media strategy is a document outlining your social media goals, the tactics you will use to achieve them and the metrics you will track to measure your progress.

Your social media marketing strategy should also list all of your existing and planned social media accounts along with goals specific to each platform you’re active on. These goals should align with your business’s larger digital marketing strategy.

Finally, a good social media plan should define the roles and responsibilities within your team and outline your reporting cadence.

Create. Schedule. Publish. Engage. Measure. Win.

Creating your own social media marketing strategy (video guide)

No time to read the whole article? Let Amanda, Hootsuite’s own Senior Manager of Social Media Marketing, guide you through our free social media marketing strategy template in less than 10 minutes:

How to create a social media marketing strategy in 9 steps

Step 1. choose goals that align to business objectives, set s.m.a.r.t. goals.

The first step to creating a winning social media strategy is to establish clear objectives and goals. Without goals, you have no way to measure success and return on investment (ROI) .

Each of your social media marketing goals should be SMART : s pecific, m easurable, a ttainable, r elevant and t ime-bound.

Psst: Need help getting started? We’ve got social strategy guides for small businesses , financial services , government , higher education , healthcare , real estate , law firms , and non-profits .

Oh, and if you need examples of smart social media goals , we’ve got you covered there too.

Once you’ve decided on your goals, track them in a social media strategy doc — grab our free template if you don’t have one already.

Track meaningful metrics

Vanity metrics like number of followers and likes are easy to track, but it’s hard to prove their real value. Instead, focus on things like engagement, click-through, and conversion rates.

For inspiration, take a look at these 19 essential social media metrics .

You may want to track different goals for different social media networks, or even different uses for each network.

For example, if you use LinkedIn to drive traffic to your website, you would measure click-throughs. If Instagram is for brand awareness, you might track the number of Instagram Story views. And if you advertise on Facebook, cost-per-click (CPC) is a common success metric.

Social media goals should align with your overall marketing objectives. This makes it easier to show the value of your work and secure buy-in from your boss.

Start developing a successful social media marketing plan by writing down at least three goals for social media.

“ It’s easy to get overwhelmed by deciding what to post and which metrics to track, but you need to focus on what you want to get out of social media to begin with,” says Amanda Wood, Hootsuite’s Senior Manager of Social Marketing. “Don’t just start posting and tracking everything: match your goals to your business, and your metrics to your goals.”

Step 2. Learn everything you can about your audience

Get to know your fans, followers, and customers as real people with real wants and needs, and you will know how to target and engage them on social media.

When it comes to your ideal customer, you should know things like:

• Average income
• Typical job title or industry

Here’s a simple guide and template for creating audience/buyer personas .

Don’t forget to document this information in your strategy doc!

Social media analytics can also provide a ton of valuable information about who your followers are, where they live, and how they interact with your brand on social media. These insights allow you to refine your strategy and better target your audience.

Jugnoo, an Uber-like service for auto-rickshaws in India, used Facebook Analytics to learn that 90% of their users who referred other customers were between 18- and 34-years-old, and 65% of that group was using Android. They used that information to target their ads, resulting in a 40% lower cost per referral.

Check out our guide to using social media analytics and the tools you need to track them .

Step 3. Get to know your competition

Odds are your competitors are already using social media, and that means you can learn from what they’re doing.

Conduct a competitive analysis

A competitive analysis allows you to understand who the competition is and what they’re doing well (and not so well). You’ll get a good sense of what’s expected in your industry, which will help you set social media targets of your own.

It will also help you spot opportunities and weaknesses you can document in your social strategy doc.

Maybe one of your competitors is dominant on Facebook, for example, but has put little effort into X (Twitter) or Instagram. You might want to focus on the social media platforms where your audience is underserved, rather than trying to win fans away from a dominant player.

Use social media listening

Social listening is another way to keep an eye on your competitors.

Do searches of the competition’s company name, account handles, and other relevant keywords on social media. Find out what they’re sharing and what other people are saying about them. If they’re using influencer marketing, how much engagement do those campaigns earn them?

Pro tip : Use Hootsuite Streams to monitor relevant keywords, hashtags and accounts in real-time.

Try Hootsuite for free. You can cancel anytime.

As you track, you may notice shifts in how your competitors and industry leaders are using social media. You may come across new, exciting trends. You might even spot specific social content or a campaign that really hits the mark—or totally bombs.

Use this kind of intel to optimize and inform your own social media marketing strategy.

Just don’t go overboard on the spy tactics, Amanda advises. “ Make sure you aren’t ALWAYS comparing yourself to the competition — it can be a distraction. I’d say checking in on a monthly basis is healthy. Otherwise, focus on your own strategy and results.”

Step 4. Do a social media audit

If you’re already using social media, take stock of your efforts so far. Ask yourself the following questions:

• What’s working, and what’s not?
• Who is engaging with you?
• What are your most valuable partnerships?
• Which networks does your target audience use?
• How does your social media presence compare to the competition?

Once you collect that information, you’ll be ready to start thinking about ways to improve.

We’ve created an easy-to-follow social media audit guide and template to walk you through each step of this process.

Your audit should give you a clear picture of what purpose each of your social accounts serves. If the purpose of an account isn’t clear, think about whether it’s worth keeping.

To help you decide, ask yourself the following questions:

• Is my audience here?
• If so, how are they using this platform?
• Can I use this account to help achieve my goals?

Asking these tough questions will keep your social media strategy focused.

Look for impostor accounts

During the audit, you may discover fake accounts using your business name or the names of your products.

These imposters can be harmful to your brand—never mind that they’re capturing followers that should be yours.

You may want to get your accounts verified too to ensure your fans know they are dealing with the real you.

Here’s how to get verified on:

• X (Twitter)

Step 5. Set up accounts and improve profiles

Decide which networks to use.

As you decide which social networks to use, you will also need to define your strategy for each.

Benefit Cosmetics’ social media manager, Angela Purcaro, told eMarketer : “For our makeup tutorials … we’re all about Snapchat and Instagram Stories. [X], on the other hand, is designated for customer service.”

Hootsuite’s own social team even designates different purposes for formats within networks. On Instagram, for example, they use the feed to post high-quality educational infographics and product announcements and Stories to cover live events or quick social media updates.

View this post on Instagram A post shared by Hootsuite 🦉 (@hootsuite)

Pro tip : Write out a mission statement for each network. A one-sentence declaration to keep you focused on a specific goal.

Example: “We will use X for customer support to keep email and call volumes down.”

Or: “We will use LinkedIn for promoting and sharing our company culture to help with recruitment and employee advocacy.”

One more: “We will use Instagram to highlight new products and repost quality content from influencers.”

If you can’t create a solid mission statement for a particular social media channel, you may want to ask yourself if it’s worth it.

Note : While larger businesses can and do tackle every platform, small businesses may not be able to — and that’s ok! Prioritize social platforms that will have the most impact on your business and make sure your marketing team has the resources to handle content for those networks. If you need help focusing your efforts, check out our 18-minute social media plan .

Set up your profiles

Once you’ve decided which networks to focus on, it’s time to create your profiles. Or improve existing ones so they align with your strategy.

• Make sure you fill out all profile fields
• Include keywords people would use to search for your business
• Use consistent branding (logos, images, etc.) across networks so your profiles are easily recognizable

Pro tip : Use high-quality images that follow the recommended dimensions for each network. Check out our always-up-to-date social media image size cheat sheet for quick reference.

We’ve also got step-by-step guides for each network to walk you through the process:

• Create a Facebook business page
• Create an Instagram business account
• Create a TikTok account
• Create a X (Twitter) business account
• Create a Snapchat account
• Create a LinkedIn Company Page
• Create a Pinterest business account
• Create a YouTube channel

Don’t let this list overwhelm you. Remember, it’s better to use fewer channels well than to stretch yourself thin trying to maintain a presence on every network.

Optimize your profiles (and content) for search

Never heard of social SEO ? It’s time to learn.

44% of Gen Z consumers use social platforms to research their purchase decisions, which means it’s extra critical that your channels are optimized for social search.

That means making sure your profile names are clear and descriptive, you’re including relevant hashtags and keywords in your bio and on every post, and you’re using features like alt text and captions to include your target keywords as naturally as possible.

Step 6. Find inspiration

While it’s important that your brand be unique, you can still draw inspiration from other businesses that are great on social.

“ I consider it my job to stay active on social: to know what’s trending, which campaigns are winning, what’s new with the platforms, who’s going above and beyond,” says Amanda. “This might be the most fun step for you, or the hardest one, but it’s just as crucial as the rest of them.”

Social media success stories

You can usually find these on the business section of the social network’s website. ( Here’s Facebook’s , for example.)

Case studies can offer valuable insights that you can apply to your own social media plan.

Award-winning accounts and campaigns

You could also check out the winners of The Facebook Awards or The Shorty Awards for examples of brands that are at the top of their social media game.

For learning and a laugh, check out Fridge-Worthy, Hootsuite’s bi-weekly awards show highlighting brands doing smart and clever things on social media.

Your favorite brands on social media

Who do you enjoy following on social media? What do they do that compels people to engage and share their content?

National Geographic, for example, is one of the best on Instagram, combining stunning visuals with compelling captions.

View this post on Instagram A post shared by National Geographic (@natgeo)

Then there’s Shopify. The ecommerce brand uses Facebook to sell themselves by showcasing customer stories and case studies.

And Lush Cosmetics is a great example of superior customer service on X. They use their 280 characters to answer questions and solve problems in an extremely charming and on-brand way.

Source: lushcosmetics on X

Notice that each of these accounts has a consistent voice, tone, and style. That’s key to letting people know what to expect from your feed. That is, why should they follow you? What’s in it for them?

Consistency also helps keep your content on-brand even if you have multiple people on your social media team.

For more on this, read our guide on establishing a compelling brand voice on social media .

Ask your followers

Consumers can also offer social media inspiration.

What are your target customers talking about online? What can you learn about their wants and needs?

If you have existing social channels, you could also ask your followers what they want from you. Just make sure that you follow through and deliver what they ask for.

Step 7. Create a social media content calendar

Sharing great content is essential, of course, but it’s equally important to have a plan in place for when you’ll share content to get the maximum impact.

Your social media content calendar also needs to account for the time you spend interacting with the audience (although you need to allow for some spontaneous engagement as well).

Set your posting schedule

Your social media content calendar lists the dates and times at which you will publish types of content on each channel. It’s the perfect place to plan all of your social media activities—from images, link sharing, and re-shares of user-generated content to blog posts and videos. It includes both your day-to-day posting and content for social media campaigns.

Your calendar also ensures your posts are spaced out appropriately and published at the best times to post .

Pro tip: You can plan your whole content calendar and get recommended best times to post on every network based on your past engagement rate, impressions, or link click data in Hootsuite.

Hootsuite’s Best Time to Publish feature

Determine the right content mix

Make sure your content strategy and calendar reflect the mission statement you’ve assigned to each social profile, so that everything you post is working to support your business goals.

(We know, it’s tempting to jump on every meme, but there should always be a strategy behind your social media marketing efforts!)

You might decide that:

• 50% of content will drive traffic back to your website
• 25% of content will be curated from other sources
• 20% of content will support lead-generation goals (newsletter sign-ups, ebook downloads, etc.)
• 5% of content will be about your company culture

Placing these different post types in your content calendar will ensure you maintain the right mix.

If you’re starting from scratch and you’re not sure what types of content to post, try the 80-20 rule :

• 80% of your posts should inform, educate, or entertain your audience
• 20% can directly promote your brand.

You could also try the social media content marketing rule of thirds :

• One-third of your content promotes your business, converts readers, and generates profit.
• One-third of your content shares ideas and stories from thought leaders in your industry or like-minded businesses.
• One-third of your content is personal interactions with your audience

Whatever you decide on, be sure to document it in your strategy doc.

Don’t post too much or too little

If you’re starting a social media marketing strategy from scratch, you may not have figured out how often to post to each network for maximum engagement yet.

Post too frequently and you risk annoying your audience. But, if you post too little, you risk looking like you’re not worth following.

Start with these posting frequency recommendations:

• Instagram (feed): 3-7 times per week
• TikTok: 3-5 times per week
• Facebook: 1-2 times per day
• X (Twitter): 1-5 times per day
• LinkedIn: 1-5 times per day

Pro tip : Once you have your social media content calendar planned out, use a scheduling tool to prepare messages in advance rather than updating constantly throughout the day.

We might be biased, but we think Hootsuite is the best social media management tool. You can schedule social media posts to every network and the intuitive calendar view gives you a full picture of all your social activity each week.

Try It Free

Step 8. Create compelling content

Remember those mission statements you created for each channel in Step 5? Well, it’s time to go a bit deeper, a.k.a. provide some examples of the type of content you’ll post to fulfill your mission on each network.

If you’re not sure what to post, here’s a long list of social media content ideas to get you started. Or (to make it even easier) you can use an AI tool like OwlyWriter to generate on-brand content in a flash.

The idea here is to:

• Keep your content aligned with the purpose of each network;
• Show other stakeholders (if applicable) what kind of content they can expect to see on each network.

This last point especially will help you avoid any tension when your colleagues want to know why you haven’t posted their case study/whitepaper/blog post to TikTok yet. It’s not in the strategy, Linda!

Ideally, you will generate content types that are both suited to the network and the purpose you’ve set out for that network.

For example, you wouldn’t want to waste time posting brand awareness tweets if you’ve designated X/Twitter for primarily customer support. And you wouldn’t want to post super polished corporate video ads to TikTok, as users expect to see short, unpolished videos on that platform.

It might take some testing over time to figure out which type of content works best on which type of network, so prepare to update this section frequently.

We won’t lie: content creation isn’t as easy as everyone not on the social team seems to think. But if you’re struggling, Amanda suggests going back to basics.

The first question to ask is: is there cohesion between your content types? Is your content providing value? Do you have a good mix of entertaining, or educational content? What does it offer that makes a person stop and spend time? Creating a few different content pillars or categories that encompass different aspects of storytelling for your brand, and what you can offer your audience is a good start.

This brings us to Step 9.

Step 9. Track performance and make adjustments

Your social media marketing strategy is a hugely important document for your business, and you can’t assume you’ll get it exactly right on the first try.

As you start to implement your plan and track your results, you may find that some strategies don’t work as well as you’d anticipated, while others are working even better than expected.

That’s why it’s important to document your progress along the way.

Look at performance metrics

In addition to the analytics within each social network (see Step 2), you can use UTM parameters to track social visitors as they move through your website, so you can see exactly which social posts drive the most traffic to your website.

Benchmark your results

You’ve got your numbers, but how do they stack up to the competition in your industry? Industry benchmarks are a great way to evaluate your performance against other businesses in your category.

If you’ve got Hootsuite Analytics , you can use our built-in social media benchmarking tool to compare the performance of your social accounts against the average of brands in your industry with just a couple of clicks.

You can set up custom timeframes, switch between networks — Instagram, Facebook, X (Twitter), LinkedIn, and TikTok — and look up benchmarks for metrics like followers, audience growth rate, engagement rate, clicks, shares, and much more.

You’ll also find resources to improve your performance  right in the summary section:

Re-evaluate, test, and do it all again

Once this data starts coming in, use it to re-evaluate your strategy regularly. You can also use this information to test different posts, social marketing campaigns, and strategies against one another. Constant testing allows you to understand what works and what doesn’t, so you can refine your social media marketing strategy in real time.

You’ll want to check the performance of all your channels at least once a week and get to know the basics of social media reporting so you can track your growth over time.

Pro tip: If you use Hootsuite, you can review the performance of all your posts on every network in one place. Once you get the hang of checking your analytics, you may even want to customize different reports to show specific metrics over a variety of different time periods.

Surveys can also be a great way to find out how well your social media strategy is working. Ask your followers, email list, and website visitors whether you’re meeting their needs and expectations, and what they’d like to see more of. Then make sure to deliver on what they tell you.

Finalizing your social media strategy

Spoiler alert: nothing is final.

Social media moves fast. New networks emerge, others go through demographic shifts.

Your business will go through periods of change as well.

All of this means that your social media marketing strategy should be a living document that you review and adjust as needed. Refer to it often to stay on track, but don’t be afraid to make changes so that it better reflects new goals, tools, or plans.

When you update your social strategy, make sure to watch our 5-step video on how to updating your social media strategy for 2024:

Social media strategy template

Ready to start documenting? Grab your free social media strategy template below!

What’s next? When you’re ready to put your plan into action, we’re here to help…

Save time managing your social media marketing strategy with Hootsuite. From a single dashboard you can easily:

• Plan, create, and schedule posts to every network
• Track relevant keywords, topics, and accounts
• Stay on top of engagement with a universal inbox
• Get easy-to-understand performance reports and improve your strategy as needed

Try Hootsuite for Free

With files from Shannon Tien .

Do it better with Hootsuite , the all-in-one social media tool. Stay on top of things, grow, and beat the competition.

Become a better social marketer.

Get expert social media advice delivered straight to your inbox.

Christina Newberry is an award-winning writer and editor whose greatest passions include food, travel, urban gardening, and the Oxford comma—not necessarily in that order.

Amanda Wood is a senior social marketing professional who combines analytical and creative thinking to build brands.

As head of social at Hootsuite, Amanda oversees the global social strategy encompassing organic and paid social on Instagram, Facebook, Twitter, TikTok, and LinkedIn, a social engagement and listening strategy, and an employee advocacy program.

As the leader of a high-performing social team, she has extensive experience collaborating with creatives to bring campaigns to life on social and drive business results.

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What is a Business Plan? Definition, Tips, and Templates

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

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Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

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Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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