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Business Plan: What It Is, What's Included, and How to Write One

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

What Is a Business Plan?

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

Key Takeaways

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

Investopedia / Ryan Oakley

Understanding Business Plans

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

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

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

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

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

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

How to Write a Business Plan

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

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

Common Elements of a Business Plan

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

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

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

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

2 Types of Business Plans

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

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

Why Do Business Plans Fail?

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

How Often Should a Business Plan Be Updated?

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

What Does a Lean Startup Business Plan Include?

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

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

The Bottom Line

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

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

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

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

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

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

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

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

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

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

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Step-by-Step Guide to Writing a Simple Business Plan

By Joe Weller | October 11, 2021

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A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice. 

Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .

What Is a Business Plan?

A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:

• Product goals and deadlines for each month
• Monthly financials for the first two years
• Profit and loss statements for the first three to five years
• Balance sheet projections for the first three to five years

Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.

While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.

For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .

Business Plan Steps

The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:

• Executive summary
• Description of business
• Market analysis
• Competitive analysis
• Description of organizational management
• Description of product or services
• Marketing plan
• Sales strategy
• Funding details (or request for funding)
• Financial projections

If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.

Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.

Do I Need a Simple or Detailed Plan?

Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.

How to Choose the Right Plan for Your Business

In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.

Use the chart below as a guide for what type of business plan to create:

Is the Order of Your Business Plan Important?

There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.

The Difference Between Traditional and Lean Business Plans

A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.

In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.

How to Write a Business Plan Step by Step

Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.

Step 1: Executive Summary

The executive summary will always be the first section of your business plan. The goal is to answer the following questions:

• What is the vision and mission of the company?
• What are the company’s short- and long-term goals?

See our  roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.

Step 2: Description of Business

The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:

• What business are we in?
• What does our business do?

Step 3: Market Analysis

In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:

• Who is our customer? 
• What does that customer value?

Step 4: Competitive Analysis

In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:

• Who is the competition? 
• What do they do best? 
• What is our unique value proposition?

Step 5: Description of Organizational Management

In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.

Step 6: Description of Products or Services

In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.

Questions to answer in this section are as follows:

• What is the product or service?
• How do we produce it, and what resources are necessary for production?

Step 7: Marketing Plan

In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:

• Who is the target market (if different from existing customer base)?
• What channels will you use to reach your target market?
• What resources does your marketing strategy require, and do you have access to them?
• If possible, do you have a rough estimate of timeline and budget?
• How will you measure success?

Step 8: Sales Plan

Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts. 

Start by answering the following questions:

• What is the sales strategy?
• What are the tools and tactics you will use to achieve your goals?
• What are the potential obstacles, and how will you overcome them?
• What is the timeline for sales and turning a profit?
• What are the metrics of success?

Step 9: Funding Details (or Request for Funding)

This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:

• How much capital do you currently have? How much capital do you need?
• How will you grow the team (onboarding, team structure, training and development)?
• What are your physical needs and constraints (space, equipment, etc.)?

Step 10: Financial Projections

Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years. 

While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:

• How and when will the company first generate a profit?
• How will the company maintain profit thereafter?

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.

For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy. 

If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.

How to Write a Simple Business Plan

A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.

Below are the steps for creating a generic simple business plan, which are reflected in the template below .

• Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company. 
• Add a Company Overview Document the larger company mission and vision. 
• Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
• Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
• Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
• Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
• Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
• Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
• Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting. 
• Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.

Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates . 

How to Write a Business Plan for a Lean Startup

A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.

While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:

• Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
• List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
• Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
• Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
• Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.). 
• Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
• Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
• Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.

See our wide variety of  startup business plan templates for more options.

How to Write a Business Plan for a Loan

A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.

In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.

• Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
• Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
• Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
• Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
• Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”

Outside of these more practical tips, the language you use is also important and may make or break your business plan.

Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.

“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”

Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”

Resources for Writing a Business Plan

While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.

Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.

How a Business Plan Helps to Grow Your Business

A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships. 

Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.

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Plan Your Business

A well-written business plan is your path to a successful business. Learn to write, use, and improve your business plan with exclusive guides, templates, and examples.

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Learn to write a detailed business plan that will impress investors and lenders—and provide a foundation to start, run, and grow a successful business.

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Business Plan Template

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Simple Business Plan Outline

Follow this detailed outline for a business plan to understand what the structure, details, and depth of a complete plan looks like.

550+ Sample Business Plans

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New to business planning? Start here

What should i include in my business plan.

You must have an executive summary, product/service description, market and competitive analysis, marketing and sales plan, operations overview, milestones, company overview, financial plan, and appendix.

Why should I write a business plan?

Businesses that write a business plan typically grow 30% faster because it helps them minimize risk, establish important milestones, track progress, and make more confident decisions.

What are the qualities of a good business plan?

A good business plan uses clear language, shows realistic goals, fits the needs of your business, and highlights any assumptions you’re making.

How long should my business plan be?

There is no target length for a business plan. It should be as long as you need it to be. A good rule of thumb is to go as short as possible, without missing any crucial information. You can always expand your business plan later.

How do I write a simple business plan?

Use a one-page business plan format to create a simple business plan. It includes all of the critical sections of a traditional business plan but can be completed in as little as 30 minutes.

What should I do before writing a business plan?

If you do anything before writing—figure out why you’re writing a business plan. You’ll save time and create a far more useful plan.

What is the first step in writing a business plan?

The first thing you’ll do when writing a business plan is describe the problem you’re solving and what your solution is.

What is the biggest mistake I can make when writing a business plan?

The worst thing you can do is not plan at all. You’ll miss potential issues and opportunities and struggle to make strategic decisions.

Business planning guides

Learn what a business plan is, why you need one, when to write it, and the fundamental elements that make it a unique tool for business success.

Types of business plans

Explore different business plan formats and determine which type best suits your needs.

How to write a business plan

A step-by-step guide to quickly create a working business plan.

Tips to write your business plan

A curated selection of business plan writing tips and best practices from our experienced in-house planning experts.

Explore industry-specific guides to learn what to focus on when writing your business plan.

Create your plan the paint by numbers way.

Business planning FAQ

What is business planning?

Business planning is the act of sitting down to establish goals, strategies, and actions you intend to take to successfully start, manage, and grow a business.

What are the 7 steps of a business plan?

The seven steps to write a business plan include:

• Craft a brief executive summary
• Describe your products and services
• Conduct market research and compile data into a 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 additional documents to your appendix

What should a business plan include?

A traditional business plan should include:

• An executive summary
• Description of your products and services
• Market analysis
• Competitive analysis
• Marketing and sales plan
• Overview of business operations
• Milestones and metrics
• Description of your organization and management team
• Financial plan and forecasts

Do you really need a business plan?

You are more likely to start and grow into a successful business if you write 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.

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

May 24, 2021

Have you ever wondered how to write a business plan step by step? Mike Andes, told us: 

This guide will help you write a business plan to impress investors.

Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses.  He knows a thing or two about writing  business plans!

We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!

What Is a Business Plan?

A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including: 

• Finding customers
• Plans for developing a team
•  Competition
• Legal structures
• Key milestones you are pursuing

If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .

Get a Business Idea

Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills. 

Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:

• What am I good at?
• What would I enjoy doing?
• What can I get paid for?”

If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it. 

As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”

If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video

Conduct Market Analysis

Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.

Product and Service Demand

A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using presearch.org because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.

With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services. 

If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.

You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.

 I ran a quick test of how many people between 18-65  you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.

Identify Demographics of Target Market

Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:

• Other Interests
• Marital Status
• Do they have kids?

Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,  

“It helps you quickly evaluate what the best areas are for your business to be located.”

How to Write a Business Plan

Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan. 

Each of the following should be a section of your business plan:

• Business Plan Cover Page
• Table of Contents
• Executive Summary
• Company Description
• Description of Products and Services

SWOT Analysis

• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 

Pricing Strategy

• Distribution Channel Assessment
• Operational Plan
• Management and Organizational Strategy
• Financial Statements and/or Financial Projections

We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go. 

How to Write a Business Plan Step 1. Create a Cover Page

The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.

A good business plan should have the following elements on a cover page:

• Professionally designed logo
• Company name
• Mission or Vision Statement
• Contact Info

Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.

How to Write a Business Plan Step 2. Create a Table of Contents

Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.

A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.

Check out Canva’s article about creating a  table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.

How to Write a Business Plan Step 3. Write an Executive Summary

An executive summary is where your business plan should catch the readers interest.  It doesn’t need to be long, but should be quick and easy to read.

Mike told us,

How long should an executive summary bein an informal business plan?

For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches .  This can also be used for the content of emails to get readers’ attention.

It consists of three basic parts:

• An introduction to you and your business.
• What your business is about.
• A call to action

Example of an informal executive summary 

One of the best elevator pitches I’ve used is:

So far that pitch has achieved a 100% success rate in getting partnerships for the business.

What should I include in an executive summary for investors?

Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:

• Introduction of yourself and company.
• An origin story (Recognition of a problem and how you came to solution)
• An introduction to your products or services.
• Your unique value proposition. Make sure to include intellectual property.
• Where you are in the business life cycle
• Request and why you need it.

Successful business plan examples

The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.

What mistakes do people make when writing an executive summary?

Business owners commonly go into too much detail about the following items in an executive summary:

• Marketing and sales processes
• Financial statements
• Organizational structure
• Market analysis

These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.

How to Write a Business Plan Step 4. Company Description

Every business plan should include a company description. A great business plan will include the following elements while describing the company:

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

Let’s take a look at what each section includes in a good business plan.

Mission Statement

A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements. 

Company Philosophy and Vision

The company philosophy is what drives your company. You’ll normally hear them called core values.  These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.

What makes your company different?

Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity. 

Examples of core values

One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:

•  Prioritize communication.
•  Never stop learning.
•  Be transparent.
•  Start small and grow incrementally.

These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .

What is a vision statement?

A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.

Example vision statements

The Alzheimer’s Association is a great example of a vision statement:

A world without Alzheimer’s Disease and other dementia.

It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.

Business Goals

You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.

Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.

How far in advance should a business plan?

Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team  understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.

Example of great business goals

My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.

If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).

You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources. 

Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.

A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:

• What is the industry outlook long-term and short-term?
• How will your business take advantage of projected industry changes and trends?
• What might happen to your competitors and how will your business successfully compete?

Industry resources

Some helpful resources to help you establish more about your industry are:

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

There are five basic types of legal structures that most people will utilize:

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.

You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.

Sole Proprietorship

A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.

To start a sole proprietorship, fill out a special tax form called a  Schedule C . Sole proprietors can also join the American Independent Business Alliance .

Limited Liability Company (LLC)

An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.

Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.

Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .

There are several opportunities to purchase successful franchises. TopFranchise.com has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.

How to Write a Business Plan Step 5. Products and Services

This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:

• Unique features that differentiate your business products from competitors
• Intellectual property
• Your supply chain
• Cost and pricing structure 

Questions to answer about your products and services

Mike gave us a list  of the most important questions to answer about your product and services:

• How will you be selling the product? (in person, ecommerce, wholesale, direct to consumer)?
• How do you let them know they need a product?
• How do you communicate the message?
• How will you do transactions?
• How much will you be selling it for?
• How many do you think you’ll sell and why?

Make sure to use the worksheet on our business plan template .

How to Write a Business Plan Step 6. Sales and Marketing Plan

The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer.  It should contain the following sections:

SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.

Business owners need to do a thorough job documenting how their service or product stacks up against the competition.

If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .

SWOT Examples

Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.

Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:

• Adding offerings that fit with your current small business
• Increase sales to current customers
• Reducing costs through bulk ordering
• Finding ways to reduce inventory
•  And other areas you can improve

Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.

The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing. 

Include Competitor Data in Your Business Plan

When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.

For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .

What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.

Marketing Strategy

The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.

If you haven’t already included it, Mike recommends:

“They’ll want to know about Demographics, ages, and wealth of your target market.”

Make sure to include the Total addressable market .  The term refers to the value if you captured 100% of the market.

Advertising Strategy

You’ll explain what formats of advertising you’ll be using. Some possibilities are:

• Online: Facebook and Google are the big names to work with here.
• Print : Print can be used to reach broad groups or targeted markets. Check out this for tips .
• Radio : iHeartMedia is one of the best ways to advertise on the radio
• Cable television : High priced, hard to measure ROI, but here’s an explanation of the process
• Billboards: Attracting customers with billboards can be beneficial in high traffic areas.

You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.

Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”

Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .

This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.

Some common pricing strategies are:

• Value-based pricing – Commonly used with home buying and selling or other products that are status symbols.
• Skimming pricing – Commonly seen in video game consoles, price starts off high to recoup expenses quickly, then reduces over time.
• Competition-based pricing – Pricing based on competitors’ pricing is commonly seen at gas stations.
• Freemium services –  Commonly used for software, where there is a free plan, then purchase options for more functionality.

HubSpot has a great calculator and blog on pricing strategies.

Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.

Distribution Plan

This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.

Supply Chain Examples

For instance, lawn care companies  would need to cover aspects such as:

• Suppliers for lawn care equipment and tools
• Any chemicals or treatments needed
• Repair parts for sprinkler systems
• Vehicles to transport equipment and employees
• Insurance to protect the company vehicles and people.

Examples of Supply Chains

These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:

• Raw materials
• Shipping of raw materials
• Converting of raw materials to thread
• Shipping thread to produce garments
• Garment producer
• Shipping to company
• Company storage
• Shipping to retail stores

There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.

The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.

According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.

How to Write a Business Plan Step 7. Company Organization and Operational Plan

This part of the business plan is focused on how the business model will function while serving customers.  The business plan should provide an overview of  how the team will manage the following aspects:

Quality Control

• Legal environment

Let’s look at each for some insight.

Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.

If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.

Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.

Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.

There are a variety of organizations that help define quality control including:

• International Organization for Standardization – Quality standards for energy, technology, food, production environments, and cybersecurity
• AICPA – Standard defined for accounting.
• The Joint Commission – Healthcare
• ASHRAE – HVAC best practices

You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.

For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.

• The size of your location
• The type of building (retail, industrial, commercial, etc.)
• Zoning restrictions – Urban Wire has a good map on how zoning works in each state
• Accessibility – Does it meet ADA requirements?
• Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
• Utilities – b.e.f. has a good energy calculator .

Legal Environment

The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:

• Any licenses and/or permits that are needed and whether you’ve obtained them
• Any trademarks, copyrights, or patents that you have or are in the process of applying for
• The insurance coverage your business requires and how much it costs
• Any environmental, health, or workplace regulations affecting your business
• Any special regulations affecting your industry
• Bonding requirements, if applicable

Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.

Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:

• What is the current leadership structure and what will it look like in the future?
• What types of employees will you have? Are there any licensing or educational requirements?
• How many employees will you need?
• Will you ever hire freelancers or independent contractors?
• What is each position’s job description?
• What is the pay structure (hourly, salaried, base plus commission, etc.)?
• How do you plan to find qualified employees and contractors?

One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:

Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.

How to Write a Business Plan Step 8. Financial Statements 

No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.

Provide All Financial Income from an Existing Business

An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.

You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.

If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:

• Higher Revenue if expanding business
• Lower Cost of Goods Sold if purchasing inventory with bulk discounts
• Adding interest if utilizing financing (not equity deal)
• Changes in expenses
• Addition of financing information to the cash flow statement
• Changes in Earnings per Share on the balance sheet

Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.

Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.

Financial Projections For A Startup Business Plan

Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.

Let’s use custom t-shirts as an example.

Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.

With that data,  you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.

Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.

Here’s a table for easier viewing of that information.

The point here is to make sure your business proposal examples make sense.

You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.

Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.

How to Write a Business Plan Step 9. Business Plan Example of Funding Requests

What is a business plan without a plan on how to obtain funding?

The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.

In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.

Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.

Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.

Ways to get funding for a small business

There are a variety of ways to cover this. the most common are:

• Bootstrapping – Using your savings without external funding.
• Taking out debt – loans, credit cards
• Equity, Seed Funding – Ownership of a percentage of the company in exchange for current funds
• Crowdsourcing – Promising a good for funding to create the product

Keep reading for more tips on how to write a business plan.

How funding will be used

When asking for business financing make sure to include:

• How much to get started?
• What is the minimum viable product and how soon can you make money?
• How will the money be spent?

Mike emphasized two aspects that should be included in every plan, 

How to Write a Business Plan Resources

Here are some links to a business plan sample and business plan outline. 

• Sample plan

It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:

• Wise Plans –  Shares a lot of information on starting businesses and is a business plan writing company.
• Optimus Business Plans –  Another business plan writing company.
• Venture Capital – A venture capital thread that can help give you ideas.

How to Write a Business Plan: What’s Next?

We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:

• The definition of a business plan
• Coming up with a business idea
• Performing market research
• The critical components of a business plan
• An example business plan

In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.

Don’t forget to check out the rest of our business hub .

Have you written a business plan before? How did it impact your ability to achieve your goals?

80% of businesses fail... Learn how not to.

Learn from business failures and successes in 5 min or less. The stories, frameworks, and tactics that will make you a 10x better founder.

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How to Start a Farm (and Make $120K/Month) in 2024

Did you know that there are approximately two million U.S. farms, earning a combined $549.8B annually?

That means the average farm makes around $275K per year.

Whether you want to get your hands dirty growing crops or raising livestock, you can make a great living doing it. You can even start a hobby farm to grow food and make some extra money while you do it.

We’ve talked to dairy farmers, fruit farmers, and people raising goats, pigs, chickens, and other animals. These farmers make between $200K and $10M per year. With their guidance, we’re going to share how to start a farm and make a great living.

[su_note note_color="#dbeafc"] Each farmer we spoke to uses different strategies, but all of them love their craft, believe in hard work, and want to share their strategies with you. Click on any of the links below to jump to the section you want to know more about.

Farming Business Case Study: Miami Fruit

How much does it cost to start a farm, how much do farmers make, is owning a farm difficult, what is the most profitable farm to start, identify your niche, learn about farming, conduct market research, write a business plan, register your farm business, get financing, buy farmland, buy farming equipment, start operations, go to farmers markets and other sales channels.

• Go Start Your Successful Farm Business [/su_note]

Rane Roatta started Miami Fruit when he was living with his single mom. His operation started as a family farm whose fruit he sold off the back of his bike. Now he’s selling millions of dollars worth of farm products every year.

He uses social media and an eCommerce site to help educate people about small farms and fruit recipes.

Want to know more? Check out our interview with Rane below to learn how to start farming.

Farming is also a business, so you need to understand exactly how much it will cost. And it’s a complicated question with no set answer.

However, you can expect to spend anywhere from $600-$10K to start a small-scale farming operation. Large-scale operations can cost well over $2M to start!

To clarify your costs, create a comprehensive list of everything you need. Don’t be afraid to ask for help and advice from your farmer connections.

The costs of starting a farm might surprise you, but consider these essentials:

• Equipment and machinery
• Business management systems

We’ll discuss each of these later, but first, let’s discuss farmers’ earnings.

That means the average farm makes around $275K per year, according to USDA data.

A farm’s cash flow may not be evenly distributed throughout the year. During the planting season, for instance, there will normally be an outflow of cash or borrowing money. During the growing season, spending may decrease but revenue will remain low.

Come harvest, revenues generally skyrocket while expenses are nominal. During this time, you may also need to pay back farm subsidies that help support agriculture farming throughout the year.

Next, let’s discuss some of the challenges you might experience when you start a farm.

Yes. Farmers and ranchers often experience uncertainty and conflict that put pressure on them during planting and harvesting. Some of the main stressors of farm operations include:

• Maintenance: Farming requires maintaining animals, crops, equipment, and your property. Maintenance can consume time and money quickly.
• Weather: You can’t predict when droughts, heatwaves, floods, freezing weather, tornadoes, or hurricanes strike and wreak havoc on a farm.
• Natural risks: Insects and soil-borne diseases can also make it difficult to run a successful farm business.
• Financial risks: Startup costs are high, market prices fluctuate, and earnings are inconsistent.
• Climate-compatibility: Some crops are just incompatible with local markets. For instance, you can’t grow tropical fruits in the middle of a desert.
• Mental aspects: Stress and mental fatigue can often make a farm operation difficult, especially for beginning farmers.
• Family turmoil: You know the old saying that business and family don’t mix? They almost always do in a farming business and that can cause stress.

Self-financing, crop insurance, and a commitment to dealing with problems head-on can reduce many of the stressors involved in starting a farm business.

According to Insider Monkey , the source for the top-rated Yahoo blog , the most profitable farms are:

• Corn/Maize: $82.4B
• Soy Beans: $57.6B
• Wheat: $12B
• Tomatoes: $10.5B
• Almonds : $8.5B

You should look at whether these crops are suitable for your area when you consider starting a farm business. Next, let’s look at how to start a farm.

How to Start a Farm

Here are some steps to take to start a farm:

• Identify your niche.
• Learn about farming.
• Research the market.
• Write a business plan.
• Register your farm business.
• Get financing.
• Buy farmland.
• Buy farming equipment.
• Start operations.
• Establish sales and distribution channels.
• Market to your customer base.

Get ready to learn how to start a small farm.

Before starting a farm business, you must choose what kind of small farm you want to run.

There are many options, and each one presents its own pros and cons. You will need to base your choice on a balance of passion (what can I wake up every morning and be happy doing?) and good business sense.

With experience and education, the decision about the type of farm you want to run will be a bit easier.

Remember that while passion is key, it’s essential to consider more than your favorite crop. Understand that farming is a business, and you must know what the market can handle. For example, hemp farmers in Wisconsin hit a bottleneck in their market and ran out of buyers in 2019.

These are some types of farms to consider:

Dairy Farms

Specifically dedicated to the production of milk (typically from cows or goats), a dairy farmer can have as few as one animal and as many as a few thousand. Milk used for drinking will need special equipment to comply with government guidelines.

The Lukens family started their family farm operation with just two goats. Now they make over $120K per month. Here’s part one of our interview with them.

Check out the second part of our interview with them, too.

Every month there are more than 3,100 searches for the terms “vegetable farms near me” and “vegetable farm near me.” That’s a pretty good indicator that you should be selling to the public if you are growing fruits, vegetables, or grains.

These farms are dedicated to feeding people. For a small farm, this might mean a diversified list of various crops sold locally at farmers markets or co-ops. Make sure to rotate your crops to maintain the nutrients in the soil and provide healthier food.

Larger farms tend to stick with only one type of crop and may rely on large corporate deals for their produce.

Chicken Farms

Poultry farms (chickens and turkeys) are typically used for meat but may also supply eggs. Many smaller farms featuring cage-free, locally produced poultry and eggs are competing with larger-scale producers.

Check out how Geoff Scott and his partner started Marion Acres, Helvetia Farm Market, and Helvetia Poultry Processing.

Flower Farms

Flower farms supply their products to florists who then sell the product to an end-user. This type of small farm may also sell at farmers markets or to local grocery chains.

Organic Farming

Organic farming means that a product meets strict growing, handling, and processing standards. There are two levels of organic products:

• USDA-Certified Products: These products contain at least 95% organic content, go through a 12+ week certification process, and bear the USDA Organic seal.
• "Made With" Organic Materials: These products contain at least 70% organic materials and are mostly a marketing ploy but may still fetch a higher price.

A farm or processing facility must go through a rigorous process to get their products deemed USDA-certified organic products. The steps include:

• Following federal guidelines for soil quality, animal raising, reduction of pests and weeds, and additive use
• Preserving biodiversity, respecting the natural cycles, and caring for animals
• Avoiding GMOs, synthetics, and chemicals, while providing transparency on labels
• Submitting an Organic System Plan
• Allowing an accredited agent to inspect farm operations
• Waiting for a certified agent to review the inspection report

If your products pass the certification process, you can sell them with the coveted “USDA Organic” seal.

Other Interesting Farms

You wouldn’t believe how many types of farms people want to learn about. Some of the most common Google searches are about how to start a:

• Christmas tree farm
• Mushroom farm
• Cattle farm
• Lavender farm
• Crawfish farm
• Shrimp farm
• Hydroponic farm
• Butterfly farm
• Petting farm
• Regenerative farm

While this may indicate demand, it’s important to conduct market research to determine whether the above farms are economically viable.

Whether it’s just a hobby or you want to make farm work a small business, there are plenty of opportunities for finding land and starting a farm business. But there will be a learning curve.

If you grew up in the concrete jungle, then your first step is getting out of town.

The idea of a farmer wandering around on his property with a wheat stalk sticking out of his mouth isn’t reality. Farming is dirty, smelly, and hard work. It’s not for the faint of heart.

To gain a better understanding, visit the different farm types you might be interested in running and view them from a hands-on standpoint. If you don’t know a farmer, try searching online and scheduling a private tour .

Even better, ask if they’ll let you spend a whole day (or more!) with them to see how everything runs. Farming is a complicated business, so it’s vital to do loads of research on the front end so you know what you’re facing.

Education and Experience

A tour may be educational and inspirational, but it won’t cut it to run a successful farming operation. Farm managers need experience! Fortunately, there are many training programs available in the U.S.

• Rogue Farm Corps
• The Land Connection
• University of Vermont Farmer Training Program (6 months)
• New Entry Sustainable Farming Project

Learning how to become a farmer may be a slow process, but you’ll benefit from spending time on the land and working with real farmers.

Take courses at local universities or community colleges to learn about land preparation, seed propagation, soil fertility, pest control, harvesting, and crop storage.

Make Local Connections

Like many businesses, farms function better when they’re in a community that supports each other. Community Supported Agriculture is a new business model for farming to consider before starting your farm.

The system connects farmers to locals who can become subscribers. In return, they receive a weekly delivery of produce or other goods from the farm. Farmers regularly update subscribers on the status of the farm and invite them for on-site tours.

As a newcomer to the farming industry, you can get involved in this model to not only gain investors in your own farm but to learn from and cultivate relationships with other local farmers.

Connect to one of these farming communities through local relationships, farmers markets, or by finding one online .

You’ll need to understand land preparation, seed propagation, soil fertility, pest control, harvesting, and crop storage.

Just growing things isn’t enough to make a farm successful.

Like any business, you must conduct a thorough market analysis and match your crop to your customer base. According to Tim Lukens, finding your customer base is one of the most critical aspects of running a viable farming business. You need to know who will buy your products.

[su_quote] I’ve seen people and heard of people investing a lot of money into infrastructure thinking, ‘Well gosh, everybody is going to want it!’ Well, guess what? That’s not the case. There’s a lot of competition out there. [/su_quote]

Researching the market where you want to sell your products will give you an idea of what type of marketing budget you’ll need once your farm is up and running. If you are selling food, then keeping the market local can be beneficial, but don’t rule out the online marketplace.

The United States Department of Agriculture (USDA) is the top source for agricultural market research and has extensive resources available for free.

Case Study: Grace Harbor’s Growing Customer Base

For Grace Harbor’s business, the customer base developed over time. Since she started with goats, the natural progression for Grace Harbor was to make soap and then lotions. Her business began at farmers markets and moved to a mall kiosk to sell its goods.

[su_quote] By the end of the farmers’ market season, people were asking, ‘Where can we find you when the season is over?’ So, we rented a kiosk. And we launched a business. [/su_quote]

Demand continued to increase, and now over 100 stores nationwide carry her skincare products.

The Lukens also began selling their soaps and other skincare products online, which is where their largest market is today.

The Washington State Department of Agriculture offers resources to help local farms market their products, providing marketing guidance, regulation education, and training specifically for small, local farms. Oregon has a similar program for those with a small farming business.

A quick online search will reveal assistance programs if you are starting a farm in another state.

To understand if your farm is viable as a business, you need a business plan.

Your business plan is a “roadmap to success.” It provides information about who you are, what you want, and how you intend to get there. It’s a set of guidelines and is subject to change, but it’s a good place to start your journey towards becoming a farmer.

Fortunately, the USDA offers assistance in creating a business plan along with other resources to farmers who are just starting.

Other Resources

• New England Small Farm Institute’s sample business plan resources for farmers
• North Carolina State’s organic farm planning resources
• Kansas State Ag Manager’s sample business plan
• Small farm business plan sample

Registering your farm helps with income tax and securing funding, and it looks more professional to investors.

To legally start your farming operation, you need to establish a business structure for legal and tax purposes. Like any business, farmers operate under one of five structures: limited liability company, sole proprietorship, corporation, partnership, or cooperative.

Permits and Licenses

Besides a business structure, your farm will require various permits and licenses based on your location and style of farm.

The USDA has an online resource that maps out the federal licenses for each farm type. However, you must visit your state’s Department of Agriculture site to check on state and local licenses and permits.

Farmers Business Insurance

There are a variety of insurance policies that you should consider including:

• Crop insurance: There are all kinds of crop and livestock insurance available through the USDA Risk Management Agency
• Farmstead insurance: This is often called farm and ranch insurance. It works like homeowners insurance but covers more than a typical homeowners policy. You’ll also be able to get add-ons like livestock or crop insurance.

Once you complete a business plan and understand the feasibility of your agriculture business, it’s time to organize your finances. Although taking out loans to start a farm can be challenging, you may find it unavoidable.

Securing financing like loans, grants, or investment partners can help with startup costs, working capital, expansion, and growth.

Conventional Loans, the USDA, and Other Options

Traditional bank loans and small business loans may be available for your farm business. However, without some collateral or previous business history, they may be difficult to secure.

The best resource for a small farm loan (and for all things related to agriculture in the U.S.) is the USDA. The U.S. government aids farming operations of any size through their beginning farmer and rancher loans .

There are thousands of local USDA service centers throughout the country available to help with farming business needs.

Many people who don’t have startup capital may find help from family or friends, grant opportunities (make sure your business plan is solid!), or even the use of a 0% credit card.

While you might need a bit of money upfront to get started, many farmers suggest that those starting a farm business avoid getting into debt.

The Lukens family learned this the hard way when a bout of E. coli found its way into their product line. Health officials traced the bacteria back to Grace Harbor when someone became ill. The farm took a financial nosedive overnight. They tried to rely on credit cards to bail themselves out but ended up declaring bankruptcy.

After this disappointing situation, the Lukens regrouped by using only cash reserves to pay for operations. They learned a very hard lesson about avoiding debt at all costs.

[su_quote] The bankruptcy did some good things for us, too, because it forced us to operate on our own cash. We didn’t have any credit to do anything else. We had to do everything by cash. If we needed a new truck, or we needed a new anything, we had to do it with the money we had. [/su_quote]

Advice from Chris Hogan , formerly of Ramsey Solutions, states that debt can magnify problems, and entrepreneurs need to keep a close eye on cash flow.

Obviously, you need a parcel of land to grow your food or keep your animals. If you already have property, you could start a small farm in your own backyard. If you need to buy or rent land, factor that into your startup costs.

You’ll need to buy farming equipment. Your farmer tools depend on the type of farm you run.

Large crops may require tractors and storage buildings, among other equipment. Dairy farms may require special milking and pasteurizing equipment. Animals require fences, outbuildings, and a variety of handling equipment.

If you’re making products on-site, like Grace Harbor’s skincare line, you need a manufacturing space for production equipment and labeling.

It may be possible to borrow or share equipment at the beginning, which is a great way to keep your costs low. This is where those connections with other farmers continue to come into play.

Farm workers might also need to purchase:

• Water pumps
• Soil preparation
• Cooling and storage
• Animals and veterinary services (if running a farm with animals)

If farming sounds like it will be too costly, check out some of the most profitable businesses .

Once you have all the equipment, crops, and livestock, it’s time to run your business. That means you’ll need to:

• Care for crops or livestock: This might mean hiring farm workers. Learn more about hiring.
• Manage financials: Use QuickBooks , Easy Farm, or Farmbooks.

Based on our interviews about how to start a small farm business, there are several sales and distribution channels you should consider.

• On-premises: You can sell your products directly to consumers at your location. This requires marketing your farm but no shipping.
• eCommerce: Sell your products online and ship them to customers.
• Farmers markets: The USDA has a national farmers market directory where you can find your local market, contact the director, and negotiate your way into the market.
• Distributors: Sell your cattle or food to distributors that will transport it to grocery stores and other locations.

The distribution channels you choose will impact your profitability, but most successful farm businesses will use multiple channels.

Go Start Your Successful Farm Business

We’ve discussed the farm industry, farm ideas, how to start a farm, business structures, how to buy a farm, and where to sell farm produce and meat. It’s up to you to take the information, turn it into a farm business plan, then enact it.

One thing farmers need to understand to be successful is who their buyers are. Tim Lukens says:

[su_quote] If you don’t know who your buyer will be, you can’t sell your product. Even if you can grow or make a good product, you have to find someone to buy it. [/su_quote]

Lukens says that a farmer needs to understand what the market potential is and understand what the operating costs are. This will help protect those who want to start a farm business from getting in over their heads.

Are you ready to get started on your own farm? Let’s hear what you’re going to be raising or growing on your very own land!

How to Start a Service Business (2024)

How would you like to make $100K in just four months?

Starting a service business holds the prospect of independence, job satisfaction, and profitability. But where do you begin? How do you navigate the vast possibilities and turn your vision into a thriving reality?

We’ll talk to Brandon Vaughn, who started Wise Coatings in 2021 and makes more than $500K monthly today. His passion for marketing and branding transformed his unique service business idea into a thriving 25-location empire.

Then we’ll explore the blueprint for launching and managing a successful service business. Whether you're passionate about financial consulting, fitness training, or culinary delights, there's a niche waiting to be filled with your expertise.

Join us as we help you create a compelling business plan and ensure you harness the power of modern marketing techniques. Together, we'll unlock the secrets of managing, scaling, and eventually selling your service business, ensuring a legacy of success.

[su_note note_color="#dbeafc"] Click on any of the links below to jump to the section that interests you, or just continue reading.

What is a Service Business?

Case study: wise coatings, service business ideas, research the market, organize your finances, create a service website, register your business, develop a pricing plan, promote your business, provide excellent customer service, level up your skills, how to set up a business, how to market a service business, how to manage a service business, how to scale a service business, how to sell a service business.

• Start Your Own Business  [/su_note]

A service business provides services to customers either in person or online. While products may be included in the service, the primary function of a service business is to provide customers with a service that solves a problem, saves them time, or improves their lives.

Service businesses include companies in the following industries:

• Transportation
• Hospitality
• Construction and maintenance

Many service businesses offer free consultations, and customers hire them because they lack the skills, time, or knowledge to complete the tasks.

Brandon Vaughn grew up around business owners and had already started a window washing business, but he wanted to document his entire process of starting a business from scratch.

Brandon started Wise Coatings in 2021 with $15K. In the first month, he spent $5K on branding, $2K learning how to pour epoxy floors, and another $5K marketing the service online.

His strategy may have been too aggressive. Wise Coatings struggled to cover expenses in the second month. It nearly went bankrupt when Brandon took on a job that blew up in his face—but he overcame it.

[su_quote] We made $100k in the first four months. [/su_quote]

Since then, Wise Coatings’ services have been in high demand. There are now over 25 franchises in seven states.

Check out our interview with Brandon about how to start a business:

There are all kinds of service businesses. Businesses that provide services typically fall into two categories:

• Local businesses: Think home improvement companies and restaurants.
• Remote businesses: Think digital marketing agencies and consulting businesses. They are considered some of the best small businesses to start.

Let’s discuss some of the best service-based businesses to start.

Social Media Marketing

You might consider starting a digital marketing company. According to market.us , digital marketing is expected to grow fourfold to $1.31 trillion by 2033.

Find out how to start a social media marketing company from a business owner who already has:

Financial Service

Offering financial investment advice, payday loans, or tax preparation can bring in a great living. You’ll normally have to work at other financial institutions first to become a financial advisor.

Check out our blog about starting a bank .

Fitness Business

You could start a business in the health and fitness industry. According to Statista, the health and fitness industry is expected to grow 9.61% each year for a market value of $6.73B by 2027. You could become a personal trainer or start a gym .

Maintenance And Repair Service

Maintenance and repair services are provided by all kinds of businesses, including air conditioning repair companies, car service and repair shops, and landscaping companies.

Learn how to start a lawn service business from Mike Andes, who founded a landscaping company that is one of the fastest-growing franchise systems in the country.

Child care is another service business that can earn a great living. Consider becoming a babysitter, starting a nanny service, or creating an at-home daycare. Find out how this daycare owner makes $11.2M per year.

Business Consultant

If you’re a professional with lots of experience, consider starting a consulting company.

Find out how the OnStrategy CEO started a $500K-a-month service business:

Start a service business washing cars. For passive income, you can automate it or hire people to run it.

Learn how to start a car wash below:

Cleaning Service

You might want to start a cleaning business—you probably already have everything you need at home.

Check out our interview with Cristobal Mondragon about how to start a cleaning service business:

How to Start a Service Business

You’ll need to perform the following tasks when you start a service business.

• Organize your finances.
• Create a service website.
• Register your business.
• Develop a pricing plan.
• Promote your business.
• Provide excellent customer service.
• Improve your skill set.

Get ready to learn how to start a service business.

Once you decide what type of service business you want to start, you’ll need to start thinking about how you’ll turn it into a profitable business idea. That means you’ll need to do some market research .

Make sure to document everything you find because you’ll need it when you write your business plan.

Every small business owner should create a short business plan when starting a new business, whether in the service industry or not.

Many successful entrepreneurs recognize that their business plan helps them stay on track and true to their goals.

Learn how to write a business plan here .

You’ll need to cover the startup costs to start a service-based business. You might take out a personal loan, use your savings or a credit card, borrow some money from friends and family, or take out a small business loan.

Learn more about small business loans here .

Every successful service business needs a website. Learn about creating a website for your new business.

You’ll need to register your business. We outline the process below— jump to it by clicking here .

As a service provider, you’ll need to create a price sheet or formulas to establish the amount you'll quote and charge potential customers.

Check out our blogs to learn about service business charging methods:

• House Cleaning Pricing
• Pressure Washing Pricing

You’ll need marketing efforts to bring in new customers. The process will look similar to this:

• Identify your target market.
• Perform market research
• Write a marketing plan.
• Set up marketing channels.
• Implement your marketing strategy.
• Ask for reviews.

It should go without saying, but you need to provide exceptional customer service as a service business owner. This involves multiple aspects, including listening to the customer, doing the job right, cleaning up after yourself, and resolving customer complaints.

A service-based business should focus on continuous improvement. This might mean taking professional development courses, improving your processes, and developing training procedures.

Many owners of service-based businesses recommend teaching others about your services. This helps develop your skills, too.

Here are the steps to setting up a business:

• Choose a business name.
• Create a business structure.
• Get your employer identification number.
• Get a business license.
• Open a business bank account.
• Get business insurance.

Let’s look at each aspect of service business setup.

Choose a Business Name

Setting up a small business starts by choosing a business name. You’ll want to:

• Brainstorm names.
• Search the U.S. Patent and Trademark Office’s trademark database .
• Check website domain name availability on a site like GoDaddy .
• Check the availability of social media tags.

Check out our extensive business names category for inspiration when naming your service business.

Create a Business Structure

You’ll want to create a limited liability company LLC or corporation for your new business. This requires going to the Secretary of State website in the state you want to register.

Learn about the different types of business structures .

Get Your Employer Identification Number

You’ll need to get your Employer Identification Number (EIN) from the Internal Revenue Service when you start an LLC or corporation. Other entities may need an EIN also.

An EIN is especially important when you hire employees because it is how you tie the employee and company tax filings together. Get your EIN for free at IRS.gov .

Get a Business License

A new service business may need business licenses, permits, or other requirements to operate. For instance, many professional services and contracting businesses require professional licensing, bonds, insurance, and more.

Get local assistance from the Small Business Administration to find the best resources for your location and industry.

Open a Business Bank Account

Make sure to get a business bank account. Accepting payments, managing cash flow, and paying business expenses are all part of business management.

You might want to consider applying for a bank account at some of the top SBA lenders . Building a relationship early will give you a head start when you decide to apply for a small business loan. The table below shows the top 10 504 lenders.

Get Business Insurance

A service business needs insurance policies to protect against unforeseen events. Some of the most common types of small business insurance include:

• General liability insurance: Covers against accidental bodily and physical injury that the company is liable for.
• Professional liability insurance: This covers errors in work and the resulting impacts.
• Workers compensation insurance: Protects the business when an employee is hurt on the job.

We recommend checking Simply Business to get quotes from multiple insurance companies.

Marketing is essential to operating a successful service business. There are numerous marketing strategies you’ll want to use as a small business owner, including:

• Perform market research.
• Create a marketing plan.
• Use email marketing.
• Use social media marketing.
• Develop content marketing.
• Use search engine optimization.
• Include traditional marketing.
• Use paid ads.

Perform Market Research

We can’t stress it enough: You need to focus on the services people need. You have to research what they need and let them know you offer the services.

Create a Marketing Plan

Once you’ve created a business services list and identified your target market, you’ll want to create a marketing plan. Check out our blog about creating a marketing budget to market your service business using startup funds.

A new business’s success often comes down to its marketing strategies. A service business marketing plan should focus on detailing how to reach and educate customers and the strategies to keep them coming back.

Use Email Marketing

Email marketing consists of gathering email addresses, creating funnels to take people through the customer journey, then automating the emails using software like HubSpot or Mailchimp .

Think about the different types of emails you’ll need to send. Some common emails for service businesses include:

• Booking email: Send this ater someone has booked your service.
• “Services completed” email: Thank the customer for the chance to serve them and ask for a quick review.
• Promotional email: Let customers know when you’re running a sale.
• Informational emails: Educate customers on things that help them maintain the home, products, and services.

Use Social Media Marketing

Share everything on social media when starting a company. It doesn’t have to be high-quality video or images. People just like to see what’s going on, and they become familiar with a business when they see more from it.

Develop Content Marketing

Content marketing is simply creating useful content that will help your potential customers. It doesn’t have to be complex.

Check out Mike Andes’s website for a great example of how to use content marketing. It provides short videos that answer questions about starting a services business—all while getting Augusta Lawn Care Services’ name out there.

Use Search Engine Optimization (SEO)

Use SEO to target your website content to common internet searches and rank higher on Google. This strategy is a long-term play.

When they target high-volume searches, service businesses can get large amounts of traffic from this strategy. For instance, UpFlip has 30 pages that generate over 1,000 visitors per month.

Include Traditional Marketing

Every service business should use some traditional marketing to reach its target audience. Many service-based business ideas use a strategy called “three rounds” or “five rounds,” which involves sending a postcard to the three or five neighbors closest to your new customer.

Use Paid Ads

Paid ads are an essential part of any business's marketing strategy. Digital advertising options, like Google Local Services Ads , can increase your website's traffic and reach new customers.

Ask for Reviews

Customer testimonials are a crucial piece of service business marketing. Make sure to automate requesting reviews.

There’s even software that allows you to provide pre-written reviews. A strategy like this can allow you to place target keywords in your reviews, telling Google what your service business is all about.

Research the Competition

You’ll want to perform market research to understand how other business owners manage their service businesses.

Fortunately, business owners have become much more disclosive about what they do. Many business owners share intimate details about how they run their business on social media to develop their expertise and educate potential customers.

Just search on YouTube, and you’ll be able to get all kinds of great tips. Search for UpFlip, as well.

Identify the Service Business's Needs

To run a business successfully, you need detailed knowledge about current and potential customers, your cash flow and business expenses, and your time management.

Then you’ll need to set up the business with software and tools to manage these things. Many service businesses use the following software:

• Jobber: Jobber makes it easy to interact with customers and track jobs and employees.
• Quickbooks: Track your revenue, business expenses, payroll, and profits with QuickBooks .

As the business grows, you might want to upgrade to HubSpot to manage most of your communications. It offers cool features like contextual marketing that displays different information based on what the company knows about the customer. The most useful features are in the paid plans.

Hire High-Quality Employees

Hiring employees can be a daunting task. You’ll need to get a payroll processor, monitor time, comply with employment laws, train the employees, and pay them.

Some of the things you can do to make hiring easier include:

• Consider using HR outsourcing solutions .
• Learn about recruiting .
• Use pay-for-performance strategies.

Brandon told us:

[su_quote] You can approach [recruiting by] just telling what the [employees] do each day or you can treat it like marketing and explain why they’ll love the job. [/su_quote]

Listen to the Customer

Customer satisfaction is the key to building recurring customers and acquiring new customers. When you consider starting a service business business, you’ll want to:

• Think about how you would like customer interactions to go when you hire a professional.
• Listen to the customer to understand their wants and needs.
• Communicate openly and honestly about what you can and cannot do and why you suggest the solutions you do.
• Meet your commitments.
• Request feedback.
• Adjust your business processes based on the feedback.

Sometimes changes like adding a call center or providing quotes on your website can be the difference between booking clients and not.

Seek New Opportunities

Home service professionals and other businesses should be looking for ways to increase their revenue consistently. Sometimes this means networking, some times it means adding an offering.

You might have to invest in employees or new software, but opportunities arise where you can increase your client base without deviating from your business plan. Seize them.

Scaling is focused on creating a system that performs well as the workload and revenues increase. That normally means:

• Documenting everything
• Automating routine tasks
• Improving processes
• Hiring and expanding responsibly

Let’s discuss some ways to help grow your business when you’re ready to scale.

Increase Your Marketing

Increasing your marketing can be a great way to ramp up your business when you have excess capacity. Using Google Local Service Ads is a great way to get more business because you only pay for people who contact you.

It’s a bit of a waiting game. Brandon Vaughn warns:

[su_quote] You’ll want to start marketing two weeks to a month before you want more business. [/su_quote]

Expand Your Services

Another way to increase your business is to expand your services. For instance, pressure washing is a seasonal business, so Brown’s Pressure Washing does gutter cleaning and hangs Christmas lights during the off season.

Just make sure that the expansion doesn’t require a huge investment in other tools, equipment, and licenses.

Hire More Employees

A service-based company will eventually reach a point where it has to hire people to expand the business. Once your business starts rejecting customers because you don’t have time to do the work, you’ll want to start hiring so you can start accepting more clients.

Improve Processes

Opening a small business takes time and has a massive learning curve. Small business owners commonly do what is necessary when starting up a business and improve the processes as they go.

There are certain stages many business founders go through including:

• Owner/operator: Many people never choose to go past this step. The small business owner does everything during this stage.
• Manager and trainer: Small business startups that hire employees will normally operate in this manner until they get big enough to have divisions and managers. The owner is actively running a business but not performing most of the customer-facing roles.
• CEO: At this phase, the business startup has a whole team of managers running it and the founder is the CEO. The CEO manages the managers and guides the direction of the small business. 
• Owner: At the highest level of business success, the owner can step away from operations completely and pursue other ventures, sell the business, or retire. At this point you are completely hands-off except for board meetings and calls with executives.

Open More Locations

Opening a second location for your service business is another way to help scale the business.

The steps to starting a business in a new location are virtually identical to starting a small business from scratch. The main difference is that you will already have better processes in place and you may be able to combine some roles.

As you get more locations, you may want to start using a service business franchise business model and open a call center that serves all the locations.

Sure, it might seem weird to discuss selling a service business when you’re researching how to start a company, but even the best small businesses eventually close, sell, or get passed down to an employee or loved one.

Why not plan for it while you consider starting your own business?

You’ll need to:

• Document everything.
• Decide when to sell.
• Increase your sales and profit margins.
• Prepare your financial records.
• Hire a broker.
• Find prequalified buyers.
• Prepare legal documents.
• Turn over the business.

Document Everything

Documenting how you run the business is crucial to a successful transfer of ownership. You’ll want customer relationship management software, which keeps track of all interactions. In addition, you’ll want to document all the processes you use to run the business so that someone else can duplicate the interactions.

Most of this should have already been done as the business grew, but take the time to look it over again.

Decide When to Sell

When you decide to sell, the business will dramatically impact the amount you’ll get for it. You’ll want to consider aspects like:

• Ease of getting credit: When credit markets are tight, there are fewer buyers who can get credit. You’ll likely have to offer more seller financing.
• Market conditions: Inflation, industry growth, interest rates, and other macroeconomic factors can impact your ability to sell.
• Debt outstanding: When you sell a business, the buyer will commonly take on outstanding debt. If you can eliminate it within a year or two, it may be better to get rid of the outstanding debt so you can get a bigger payout.

The less urgent a sale is, the better chance of getting a good deal.

Increase Your Sales and Profit Margins

Your revenue and profit margins are typically used to calculate valuations . Take the time to cut wasteful spending and increase revenues to get the most profitable valuation for your service business.

Prepare Your Financial Records

You’ll want to have all your financial records organized and easy to review. This helps people get the best estimates for your business. In addition, a company with five years of rapidly increasing revenue and profits is likely to be valued higher than one that has 2% annual growth.

Hire a Broker

A business broker can help home service professionals and other business owners evaluate the service business, list their business, find prospective buyers, and negotiate a deal with the seller.

Learn more about working with a broker .

Find Prequalified Buyers

Finding prequalified buyers is crucial to selling a business. When someone is prequalified, they already have a promise of a bank loan. It makes selling the business easier. It will also consume less time because you won’t have to spend time negotiating with people to have the deal fall through. 

This is one of the ways a business broker can help. They already know people looking for opportunities to buy businesses.

Make sure you only accept an offer that you find acceptable.

Prepare Legal Documents

Once you have an acceptable offer, you’ll need to have a lawyer draft the paperwork and assist the buyer during the due diligence phase. Once everything is complete, you’ll both need to sign the agreement and begin the transfer of ownership.

Turn Over the Business

The transfer of ownership in a service business won’t happen overnight. It takes time to get all the insurance, business licenses, and suppliers transferred. Plus, you might need to train the new owner.

Start Your Own Business

Starting a service business can provide independence and profitability.

We covered market research, business planning, financial preparation, and registering the business. We discussed marketing and management strategies, and we even walked you through the business’s eventual sale.

You have just about all you need, but it’s up to you to start the new business and pursue your goals. What service business idea will you pursue?

How to Start a $250K/Year Handyman Business

What is a handyman?

What type of work can a handyman do legally, skills required to become a handyman.

• Know how to find a stud
• Anchoring bookcases, TVs, and other objects on a stud
• Filling holes in drywall with spackle
• Fixing loose tiles
• Caulking tubs, sinks, and bathtubs
• Fixing leaking faucets
• Unclogging drains (with or without a snake)
• Seal cracks in pavement
• Change showerheads and toilet seats
• Clean gutters
• Change doorknobs, tighten hinges and replace door locks
• Change filters
• Building and replacing window screens
• Basic electrical like changing light switches and electrical outlets

Tools required to become a handyman

• Claw Hammer
• Tape Measure
• Utility Knife
• Impact Driver
• Drill Driver - Included in the suggestion for Impact Driver
• Drill Bits - This includes drills bits and screwdriver attachments
• Circular Saw
• Recipro Saw
• Flashlight - I'd suggest both a  handheld and headlamp
• Charging Kit - Included in other power tools
• Screwdrivers
• Wire Stripper
• A vehicle that can transport everything. Look at work vans and trucks if you don't already have one.

How much does it cost to start a handyman business?

How much do handymen charge?

• Self-employed handyman hourly rate: $50-$125/hour
• Most jobs are between $65-$1200 with an average of $390
• Common jobs may have a flat fee
• Materials are typically in addition to the hourly rate

How much does a handyman business make?

Identify the target market for your handyman business.

• Property management companies because they create business growth quickly due to the number of properties they manage.
• Real estate agents because the buyers will frequently ask for small repairs that were noted on the pre-sale home inspection.
• Homeowners in wealthy areas who are able to afford service calls that are $500+

What to include in your handyman business plan

• The business’ services
• The business’ goals. Do you just want to make as much money as you can make on your own, or do you want to hire employees?
• Who the ideal clients are. If there is more than one, you should break down each segment separately.
• What you need to achieve before you can begin business operations.
• Budget and funding-startup costs and how you will get the funding. If you need to take out loans, how will you accomplish that?
• Naming the business - This is how companies will know your business.
• Forming a business - All the legal requirements that you will have to meet to start a small business and maintain your handyman licensing.
• Hiring employees (if you plan to) - What roles you will need to fill and how you will fill them.
• Marketing Plan - Guides what marketing strategy you will use, including marketing materials, social media platforms, and a brand style guide
• Operations Plan - Guides how the business will and will not operate, including customer relations, processes, vendor management, and employee management. If you are seeking funding or need the business plan to guide employee decisions, you'll want a more in-depth plan. Here’s some free and low-cost education on business plans:
• UpFlip’s blog on How to Write a Business Plan
• SCORE’s free business plans and startup assistance resources
• The Complete Business Plan Course (Includes 50 Templates)

Create a budget and obtain funding for your Handyman Business

Startup costs for your business.

• Cost of tools (if you don't already have them): _______
• Cost of work vehicle (if buying): _______
• Cost of DBA in your location: _______
• Small Business Insurance/Handyman Insurance (talk to your insurance company to see if they offer this): _______ How often is the renewal period?
• Local Licensing: _______ Is there a renewal period?
• State Licensing:_______ How often is the renewal period?
• Cost of Commercial drivers insurance: _______ How often is the renewal period? Are you using your personal vehicle? If so, what is the difference between personal insurance and commercial insurance?
• Cost of website and other software: _______ How often is the renewal period?
• At least 1 month of marketing expenses:_______. If Caleb uses paid marketing, it's $600/mo (read marketing section for more details.)

Operational Costs

• Any renewals mentioned above (add 3% each renewal period to protect against inflation):_______
• Vehicle costs:_______ assume $.58/mile
• Loan Payments (if applicable):_______
• Employees: _______ Assume $40k per employee or 30% of revenue attributable to that employee (or more if you are paying higher than average wages.)
• Sales tax: _______ Base it on your location and revenue estimates
• Income Tax: _______ Assume 20% of revenue
• Materials: _______ Assume 10% of revenue according to BPlans .
• Miscellaneous expenses: _______
• Data Caleb gave us about his revenue and other expenses.
• Assumptions from the BPlan link above.
• Breaking it down for 1 and 2 trucks.

Funding your business

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

Select a Business Name for your Handyman Company

• Does it describe what you do?
• Is it easy to remember?
• Does it prevent weird acronyms?
• Is it available as a domain name? Check that the domain name and social media accounts are available with namechk .
• Include your location/area you serve, as Caleb suggested.

Get a domain name

• Google Domains

Become a Legal Handyman Business

Business license/contractors license, business insurance, business formation, apply for an ein.

• Sales Tax Permits
• Tax Filing and Withholding

Federal employment and labor law posters

Unemployment insurance.

• Submittal of resume and references
• Disclosure of financial records
• Disclosure of criminal background (if any)
• A commercial bond of up to $500k
• Passing an exam on business law AND trade practices
• $300 application fee
• $600 license
• Up to $1,000 annual payments to the consumer recovery fund
• Do I need a contractor license in (Insert your state)?
• Do I need a contractor license in (insert your city)?
• Do I need a contractor license in (insert your county)?

• LLC or Corporation Filing
• Employee Identification Number
• Operating Agreement
• Banking Resolution Document
• Free Website with Inventory Management
• Free Business Checking Account
• Free Tax Analysis
• Business Specific Insurance Suggestions
• Suggested Payroll, Benefits, and HR Platforms

Limited Liability Corporation (LLC)

Sole proprietorship, partnerships and corporations.

Sales Tax Permit

Tax filing and withholding.

• Employment Eligibility Verification (Form I-9)
• State’s New Hire - This is required so that people who owe child support remain in compliance
• Worker’s Compensation Insurance- Insurance for when employees get hurt on the job. Check out this guide to state laws
• Disability insurance - California, Hawaii, New Jersey, New York, and Rhode Island, and Puerto Rico have requirements. Learn more about disability insurance
• Occupational Safety and Health Administration (OSHA) - Federal and state laws govern what are safe working conditions. Fines can be up to $136,532/violation or up to $13,653/day. Make sure you understand your area’s laws at OSHA.gov .

Hiring Employees

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

Job Posting 

• Zip Recruiter
• What handyman work are you most comfortable with? Least comfortable with?
• If you have to use a tool you have not used before, what would you do to make sure you handle it safely?
• How do you respond to a customer when you don’t know the answer to your question?
• I intentionally left (something in the shop that needs to be repaired) needing repairs for this interview, can you walk me through how to repair it?
• What are your compensation expectations?
• Do you have any ongoing commitments that impact your availability? If so, what dates and times will it impact?
• Do you have any points or DUIs on your driver's license?

Compensation

Hybrid Models

Outsourcing, marketing a successful handyman business, useful software for handyman businesses, operating your own handyman business.

nice work https://binarychemist.com/

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

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How to write a business plan in seven simple steps

When written effectively, a business plan can help raise capital, inform decisions, and draw new talent.

Companies of all sizes have one thing in common: They all began as small businesses.  Starting small  is the corner for those just getting off the ground. Learn about how to make that first hire, deal with all things administrative, and set yourself up for success.

Writing a business plan is often the first step in transforming your business from an idea into something tangible . As you write, your thoughts begin to solidify into strategy, and a path forward starts to emerge. But a business plan is not only the realm of startups; established companies can also benefit from revisiting and rewriting theirs. In any case, the formal documentation can provide the clarity needed to motivate staff , woo investors, or inform future decisions.  

No matter your industry or the size of your team, the task of writing a business plan—a document filled with so much detail and documentation—can feel daunting. Don’t let that stop you, however; there are easy steps to getting started. 

What is a business plan and why does it matter? 

A business plan is a formal document outlining the goals, direction, finances, team, and future planning of your business. It can be geared toward investors, in a bid to raise capital, or used as an internal document to align teams and provide direction. It typically includes extensive market research, competitor analysis, financial documentation, and an overview of your business and marketing strategy. When written effectively, a business plan can help prescribe action and keep business owners on track to meeting business goals. 

Who needs a business plan?

A business plan can be particularly helpful during a company’s initial growth and serve as a guiding force amid the uncertainty, distractions, and at-times rapid developments involved in starting a business . For enterprise companies, a business plan should be a living, breathing document that guides decision-making and facilitates intentional growth.

“You should have a game plan for every major commitment you’ll have, from early-stage founder agreements to onboarding legal professionals,” says Colin Keogh, CEO of the Rapid Foundation—a company that brings technology and training to communities in need—and a WeWork Labs mentor in the UK . “You can’t go out on funding rounds or take part in accelerators without any planning.”

How to make a business plan and seven components every plan needs

While there is no set format for writing a business plan, there are several elements that are typically included. Here’s what’s important to consider when writing your business plan. 

1. Executive summary 

No longer than half a page, the executive summary should briefly introduce your business and describe the purpose of the business plan. Are you writing the plan to attract capital? If so, specify how much money you hope to raise, and how you’re going to repay the loan. If you’re writing the plan to align your team and provide direction, explain at a high level what you hope to achieve with this alignment, as well as the size and state of your existing team.

The executive summary should explain what your business does, and provide an introductory overview of your financial health and major achievements to date.  

2. Company description 

To properly introduce your company, it’s important to also describe the wider industry. What is the financial worth of your market? Are there market trends that will affect the success of your company? What is the state of the industry and its future potential? Use data to support your claims and be sure to include the full gamut of information—both positive and negative—to provide investors and your employees a complete and accurate portrayal of your company’s milieu. 

Go on to describe your company and what it provides your customers. Are you a sole proprietor , LLC, partnership, or corporation? Are you an established company or a budding startup? What does your leadership team look like and how many employees do you have? This section should provide both historical and future context around your business, including its founding story, mission statement , and vision for the future. 

It’s essential to showcase your point of difference in your company description, as well as any advantages you may have in terms of expert talent or leading technology. This is typically one of the first pieces of the plan to be written.

3. Market analysis and opportunity

Research is key in completing a business plan and, ideally, more time should be spent on research and analysis than writing the plan itself. Understanding the size, growth, history, future potential, and current risks inherent to the wider market is essential for the success of your business, and these considerations should be described here. 

In addition to this, it’s important to include research into the target demographic of your product or service. This might be in the form of fictional customer personas, or a broader overview of the income, location, age, gender, and buying habits of your existing and potential customers. 

Though the research should be objective, the analysis in this section is a good place to reiterate your point of difference and the ways you plan to capture the market and surpass your competition.

4. Competitive analysis 

Beyond explaining the elements that differentiate you from your competition, it’s important to provide an in-depth analysis of your competitors themselves.

This research should delve into the operations, financials, history, leadership, and distribution channels of your direct and indirect competitors. It should explore the value propositions of these competitors, and explain the ways you can compete with, or exploit, their strengths and weaknesses. 

5. Execution plan: operations, development, management 

This segment provides details around how you’re going to do the work necessary to fulfill this plan. It should include information about your organizational structure and the everyday operations of your team, contractors, and physical and digital assets.

Consider including your company’s organizational chart, as well as more in-depth information on the leadership team: Who are they? What are their backgrounds? What do they bring to the table? Potentially include the résumés of key people on your team. 

For startups, your execution plan should include how long it will take to begin operations, and then how much longer to reach profitability. For established companies, it’s a good idea to outline how long it will take to execute your plan, and the ways in which you will change existing operations.

If applicable, it’s also beneficial to include your strategy for hiring new team members and scaling into different markets. 

6. Marketing plan 

It’s essential to have a comprehensive marketing plan in place as you scale operations or kick off a new strategy—and this should be shared with your stakeholders and employees. This segment of your business plan should show how you’re going to promote your business, attract customers, and retain existing clients.

Include brand messaging, marketing assets, and the timeline and budget for engaging consumers across different channels. Potentially include a marketing SWOT analysis into your strengths, weaknesses, opportunities, and threats. Evaluate the way your competitors market themselves, and how your target audience responds—or doesn’t respond—to these messages.

7. Financial history and projections  

It’s essential to disclose all finances involved in running your company within your business plan. This is so your shareholders properly understand how you’re projected to perform going forward, and the progress you’ve made so far. 

You should include your income statement, which outlines annual net profits or losses; a cash flow statement, which shows how much money you need to launch or scale operations; and a balance sheet that shows financial liabilities and assets. 

“An income statement is the measure of your financial results for a certain period and the most accurate report of business activities during that time, [whereas a balance sheet] presents your assets, liabilities, and equity,” Amit Perry, a corporate finance expert, explained at a WeWork Labs educational session in Israel.

It’s crucial to understand the terms correctly so you know how to present your finances when you’re speaking to investors. Amit Perry, CEO and founder of Perryllion Ltd.

In addition, if you’re asking for funding, you will need to outline exactly how much money you need as well as where this money will go and how you plan to pay it back. 

12 quick tips for writing a business plan 

Now that you know what components are traditionally included in a business plan, it’s time to consider how you’ll actually construct the document.

Here are 12 key factors to keep in mind when writing a business plan. These overarching principles will help you write a business plan that serves its purpose (whatever that may be) and becomes an easy reference in the years ahead. 

1. Don’t be long-winded

Use clear, concise language and avoid jargon. When business plans are too long-winded, they’re less likely to be used as intended and more likely to be forgotten or glazed over by stakeholders. 

2. Show why you care

Let your passion for your business shine through; show employees and investors why you care (and why they should too). 

3. Provide supporting documents

Don’t be afraid to have an extensive list of appendices, including the CVs of team members, built-out customer personas, product demonstrations, and examples of internal or external messaging. 

4. Reference data

All information regarding the market, your competitors, and your customers should reference authoritative and relevant data points.  

5. Research, research, research

The research that goes into your business plan should take you longer than the writing itself. Consider tracking your research as supporting documentation. 

6. Clearly demonstrate your points of difference

At every opportunity, it’s important to drive home the way your product or service differentiates you from your competition and helps solve a problem for your target audience. Don’t shy away from reiterating these differentiating factors throughout the plan. 

7. Be objective in your research

As important as it is to showcase your company and the benefits you provide your customers, it’s also important to be objective in the data and research you reference. Showcase the good and the bad when it comes to market research and your financials; you want your shareholders to know you’ve thought through every possible contingency. 

8. Know the purpose of your plan

It’s important you understand the purpose of your plan before you begin researching and writing. Be clear about whether you’re writing this plan to attract investment, align teams, or provide direction. 

9. Identify your audience

The same way your business plan must have a clearly defined purpose, you must have a clearly defined audience. To whom are you writing? New investors? Current employees? Potential collaborators? Existing shareholders? 

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10. Avoid jargon

Avoid using industry-specific jargon, unless completely unavoidable, and try making your business plan as easy to understand as possible—for all potential stakeholders. 

11. Don’t be afraid to change it

Your business plan should evolve with your company’s growth, which means your business plan document should evolve as well. Revisit and rework your business plan as needed, and remember the most important factor: having a plan in place, even if it changes.

A business plan shouldn’t just be a line on your to-do list; it should be referenced and used as intended going forward. Keep your business plan close, and use it to inform decisions and guide your team in the years ahead. 

Creating a business plan is an important step in growing your company 

Whether you’re just starting out or running an existing operation, writing an effective business plan can be a key predictor of future success. It can be a foundational document from which you grow and thrive . It can serve as a constant reminder to employees and clients about what you stand for, and the direction in which you’re moving. Or, it can prove to investors that your business, team, and vision are worth their investment. 

No matter the size or stage of your business, WeWork can help you fulfill the objectives outlined in your business plan—and WeWork’s coworking spaces can be a hotbed for finding talent and investors, too. The benefits of coworking spaces include intentionally designed lounges, conference rooms, and private offices that foster connection and bolster creativity, while a global network of professionals allows you to expand your reach and meet new collaborators. 

Using these steps to write a business plan will put you in good stead to not only create a document that fulfills a purpose but one that also helps to more clearly understand your market, competition, point of difference, and plan for the future. 

For more tips on growing teams and building a business, check out all our articles on  Ideas by WeWork.

Caitlin Bishop is a writer for WeWork’s  Ideas by WeWork , based in New York City. Previously, she was a journalist and editor at  Mamamia  in Sydney, Australia, and a contributing reporter at  Gotham Gazette .

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How to write a business plan in 12 steps (2024 edition)

Updated 18 April 2024 • 12 min read

This guide breaks down how to write a business plan, step-by-step, detailing what your document needs to include and what you need to think about to make your business plan as persuasive as possible.

What is a business plan?

A business plan is an essential document that can provide immense value for new and existing companies of all sizes. It is an overview that includes an outline of your business, its key objectives and plan for achieving important goals.

This information can be used to communicate strategic actions to internal teams and also attract interest from potential partners and investors . However, writing a business plan can be a lengthy and involved process. For many, using a business plan template can be a good way to get started.

For best results, you’ll need to do a lot of thinking and planning before you start writing your business plan. This way you have all the information and resources you need at your fingertips and won’t be under time pressure to come up with something at the last minute. After all, a well-thought-out business plan can help you avoid generic information and set your company up for success.

Download your free business plan template .

Why write a business plan?

Writing your business plan helps to get your strategy nailed down and onto the page. A plan that stays in your head is probably going to be full of unrealistic assumptions and biases, whereas a strategically thought-out and organised approach forces you to notice your blind spots and find a way forward.

If you’re looking for financing, a bank or investor needs to be persuaded by your business proposal and the opportunity to work with you. Therefore, a well-written business plan can help provide potential financial partners with the confidence that your business can become profitable. Your business plan gives them a comprehensive view of all aspects of your business and details your strategy for achieving your goals.

What are the main sections of a business plan?

Whatever your line of work, your business plan will generally need to provide the following:

An executive summary

A business overview

The market opportunity

Your products/services

How to write a business plan

Make sure you cover each of the following steps when preparing your document:

1. Write an executive summary

This section of your business plan should be 1–2 pages in length and enables potential financiers or partners to get an overview of what your business does and – most importantly — what the opportunity is for them. If they’re interested in the opportunity, they’ll conduct their own due diligence - and this will start with going through your business plan and financials.

It’s a good idea to write your executive summary last, when you’ve clarified your thinking around every section of the document. As an overview section, you don’t want to add any new content that isn’t in your business plan. Aim to keep this summary succinct and engaging by using simple, plain language, as this is much more persuasive than complicated or academic wording.

Use sub-headings and bullet points to help your most important information stand out, especially as busy executives may simply scan your executive summary and use this to decide whether they want to find out more.

What to include in an executive summary?

Make sure you include details on:

What your business does

What the opportunity is

What your unique selling points / differentiators are

How much funding you’re looking for

What the funding will be used for

How you'll succeed

Remember, you’re providing the big picture overview of your business - the detail is in the rest of the document and in the appendices.

2. Write your business overview

This section of your business plan needs to be more than just a list of what your business does. Its purpose is to excite those you’re hoping will work with you or help to fund your business.

Information to address includes:

What's the purpose of your business?

What problem does your business’ product or service solve?

What niche could it fill?

What’s different about your offering?

How are you better than anyone else at what you do?

Consider what your customer value proposition is by deciding what you want to achieve and what your number 1 benefit is for your customer.

3. Identify your USP

Think about what your unique selling points (USP) or differentiators are, and what proof-points you can provide to back them up.

For example, you can use terms like “market-leading” but if you don’t provide any evidence to back up your claims, your reader will take them with a big pinch of salt!

You should certainly reference any awards or endorsements that position you as the best person to provide your product or service, as well as any client testimonials. Make sure you include any education or experience that makes you an expert in your field as well.

4. Describe the market opportunity

Show you understand your industry, market and where you fit in it. While no-one can predict the future, offer up where you think the opportunity is for your business and make sales projections based on that. 

For example, imagine your business is selling personalised cookies - there's little competition in your area and you see your market opportunity to create designs for all calendar and holiday events. You expect to increase sales by 30% in one year and 50% in three years, driven primarily by word-of-mouth referrals.

Make sure you also consider macro trends that may create opportunities for you, such as social, environmental, or technological changes that may affect buying behaviour.

5. Include a SWOT analysis

Whatever your business strengths or opportunities, they’ll always be known and unknown weaknesses and threats; there’s no such thing as certainty in business or in life!

However, you can demonstrate that you’ve examined your business through different lenses and have a thorough understanding of it by doing a SWOT (strengths, weaknesses, opportunities, threats) analysis.

Don’t worry about drawing attention to your business’ shortcomings - every opportunity has them and it’ll give investors and partners confidence in you that you won't bury your head in the sand. Naturally, it's important that you specify what you’re going to do to address these weaknesses and counter these threats.

Here are some areas you can think about to get started: reputation, technology, location, experience, staff, overheads, competition, suppliers and price.

6. Present a competitor analysis

Let’s face it, no matter what industry you’re in, or what you’re selling, there’s going to be other businesses offering the same thing. But instead of worrying about the competition, use this as a positive opportunity to up your game and work out the unique advantages you have that will keep you competitive.

Identify your top 3 competitors and analyse what they're doing well and where they’re coming up short. Try to be as objective as possible and identify how to differentiate yourself from them.

You should also look into who the industry leaders are and what the benchmarks are for your industry so that you can set yourself targets for continuous improvement.

7. Create a customer persona

A customer persona is a fictional person who represents your company's ideal customer. Naturally, the persona can be based on a real person - the more you get to know your ideal customer, the more targeted and successful your marketing efforts will be.

To create a customer persona, you need to conduct research into your ideal customer’s age, sex, income, employment, daily activities, interests and hobbies. If you’re feeling unsure about your customer persona, you may need to give your ideal customer further thought and download the customer persona template to get started.

8. Write your marketing strategy

When you’ve created your customer persona, you need to work out how you’re going to reach them. Do they hang out on social media apps, like Facebook, Instagram, Pinterest, Twitter or LinkedIn? Or are they more used to local, traditional marketing like free local papers or high foot traffic areas?

Once you’ve figured where your audience is likely to hang out, you can outline your strategies for promoting and advertising your products or services in the next 12 months.

Make a list of the marketing channels you’ll use to achieve your advertising strategy and be sure to include your budget. How much can you set aside for advertising? And where are you most likely to see a return on your efforts? Paid ads on Facebook? Half or full paid spreads in an industry magazine? Or even a direct mail out? 

For more structured help around this, check out free course: Business 101 | Get social with your business on Facebook . 

9. Design your customer retention strategy

Business success relies heavily on the relationship you’re able to build with your customers. What techniques will you use to keep them coming back? Consider the following:

What can your business do to increase the number of repeat customers? 

Does your business have a referral or loyalty program? 

Do you have a post-purchase follow up in place?

Will you use surveys to track customer satisfaction?

What ways can you continue delivering outstanding service?

Is there a way to continue educating and adding value to your customers?

10. Present your financials

Most people who are looking at investing their time and/or money in your business will want to see your financial statements - your performance to date and your projections over the short and medium term. They'll also want to know how much you’ve received in funding to date and what these other sources of funding are - including your own investment.

Current finances

You need to show how your business has performed financially over the last year, highlighting metrics such as positive cashflow , net profit and assets.

Financial forecasts

You should also provide a balance forecast projecting total assets, total liabilities and net assets over 1, 2 and 3 years, and a profit and loss forecast for the same periods detailing gross profit /net sales, total expenses and net profit/loss. Finally, you should also provide a cash flow forecast month by month over the next year.

It’s also a good idea to speak to an expert like an accountant or bookkeeper about your finances and get advice on how best to present them in this all-important section of your business plan.

11. Detail how much funding is needed

Naturally, you also need to be very clear about how much money you’re looking for and what you plan to do with it. If you’re looking for a loan , you need to detail what it’s for, over what period it’ll be repaid, and what collateral you have to secure it.

12. Propose an exit strategy

Any financial stakeholder in your business will want a return on investment. If you’re pursuing this type of funding, you should include some detail on your proposed exit strategy . For example, do you want to sell the company at some point or go public?

Similarly, you should outline your succession plan so the business can continue to operate if you decide to step away from it. Likewise, you need a plan for what happens if the business loses money and can’t sustain itself. Documenting this means that everyone is on the same page and potential investors have this information upfront.

Frequently asked questions about writing a business plan:

When to write a business plan.

Typically, entrepreneurs write their business plans within the first year of operations. A business plan is a tool that helps business owners refine their strategy, attract partners and financiers, and grow their business.

If a business plan is written too soon, it may lack the substance that comes with time in the market. However, it’s important to note that a business plan isn't a static document - it can and should change as the business evolves.

How long should your business plan be?

There are no hard and fast rules around how long your business plan should be - it just needs to include all the relevant information. Aim for clear, concise sections and build a business plan that is as easy to read and navigate as possible.

Using a business plan template can help you make sure you have everything covered off, while also having a document that looks as professional as possible. Make sure you run a spelling and grammar check too - any sloppy errors can undermine your credibility.

What’s a business plan on a page?

It’s important to write your business plan as it helps to embed your strategy - as well as communicate what you’re about to potential partners or investors. When you have a comprehensive business plan you can easily adapt it to suit different audiences. For example, a full business plan is essential for raising capital but a business plan on a page may be enough for potential partners or employees.

What do venture capitalists look for in a business plan?

Venture capitalists invest money into businesses with the goal of achieving a return on their investment within the short to medium term. As a result, they’re looking for an attractive market opportunity, a clear point of differentiation, a strong management team, a proven track record, solid financials and, importantly, an exit opportunity.

Where to go for help or more information?

There are many great resources out there to help you fine-tune your business strategy and write your business plan. The Australian Government has a comprehensive website dedicated to supporting businesses at all stages of their journey.

You can also get help from Business Enterprise Centres , business advisors, accountants and fellow business owners. MYOB also has a list of business advisors who can give you feedback on your business plan, so your venture has the very best chance of success. 

Related Guides

How to get a business loan arrow right, how to find investors: a guide for startups arrow right, business models: definitions, types and key components arrow right.

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What to Include in Your Business Plan Here's what your business plan should contain, how long it should be and what it should look like.

By Entrepreneur Staff Dec 9, 2014

In their book Write Your Business Plan , the staff of Entrepreneur Media offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors briefly describe just what your business plan should contain, how long it should be and how to know if it's time to write it.

A business plan is a written description of the future of your business. It's a document that tells the story of what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of a plan.

But there are some generally accepted conventions about what a full-blown business plan should include and how it should be presented. A plan should cover all the important matters that will contribute to making your business a success. These include the following:

1. Your basic business concept. This is where you discuss the industry, your business structure, your particular product or service, and how you plan to make your business a success.

2. Your strategy and the specific actions you plan to take to implement it. What goals do you have for your business? When and how will you reach your goals?

3. Your products and services and their competitive advantages. Here's your chance to dazzle the readers with good, solid information about your products or services and why customers will want to purchase your products and services and not those of your competitors.

4. The markets you'll pursue. Now you have to lay out your marketing plan. Who will your customers be? What is your demographic audience? How will you attract and retain enough customers to make a profit? What methods will you use to capture your audience? What sets your business apart from the competition?

5. The background of your management team and key employees. Having information about key personnel is an important but often misrepresented portion of a business plan. It's not a long and detailed biography of each person involved but an accurate account of what they've done and what they bring to the table for this specific business opportunity.

6. Your financing needs. These will be based on your projected financial statements. These statements provide a model of how your ideas about the company, its markets and its strategies will play out.

As you write your business plan, stick to facts instead of feelings, projections instead of hopes, and realistic expectations of profit instead of unrealistic dreams of wealth. Facts—checkable, demonstrable facts—will invest your plan with the most important component of all: credibility.

How long should your plan be?

A useful business plan can be any length, from that scrawl on the back of an envelope to more than 100 pages for an especially detailed plan describing a complex enterprise. A typical business plan runs 15 to 25 pages.

Miniplans of five to 10 pages are the popular concise models that may stand on their own for smaller businesses. Larger businesses seeking major funding will often have miniplans as well, but the full business plan will be waiting in the wings. It's to your advantage to run long when creating your plan, then narrow it down for presentation purposes.

The size of the plan will also depend on the nature of your business and your reason for writing it. If you have a simple concept, you may be able to express it in very few words. On the other hand, if you're proposing a new kind of business or even a new industry, it may require quite a bit of explanation to get the message across.

The purpose of your plan also determines its length. If you're looking for millions of dollars in seed capital to start a risky venture, you'll usually (although not always) have to do a lot of explaining and convincing. If you already have relationships with potential investors, they may simply want a miniplan. If you're just going to use your plan for internal purposes to manage an ongoing business, a much more abbreviated version may suffice.

Many business plan presentations are made with PowerPoint decks, using 10 to 12 slides to tell your story. That's a great starting point, but you should have at least a miniplan available, especially if you're seeking millions of dollars.

When should you write it?

Still not sure if it's time to write a business plan? Here are a few clues that it's time to start writing:

• A business plan is a good way to explore the feasibility of a new business without actually having to start it and run it. A good plan can help you see serious flaws in your business concept. You may uncover tough competition when researching the market section, or you may find that your financial projections simply aren't realistic.
• Any venture that faces major changes (and that means almost all businesses) needs a business plan. If the demographics of your market are rapidly changing, strong new competitive products challenge your profitability, you expect your business to grow or shrink dramatically, or the economic climate is improving or slipping rapidly, you'll need a business plan. This will allow you to make changes accordingly.
• If you're contemplating buying or selling a business, your business plan can provide you with a handy tool to establish a value—and to support that value if challenged.
• You'll need a business plan if you're seeking financing. Your business plan is the backbone of your financing proposal. Bankers, venture capitalists and other financiers rarely provide money without seeing a plan. Less sophisticated investors or friends and family may not require a business plan, but they deserve one. Even if you're funding the business with your own savings, you owe it to yourself to plan how you'll expend the resources you're committing.

Entrepreneur Staff

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

In this blog...

What Should a Business Plan Include?

A business plan serves as a roadmap to successfully launch a business. It helps you overcome the challenges you might experience in your industry. Learn how to create and use a business plan for your startup.

One of the most fatal mistakes that aspiring entrepreneurs make in launching a startup is forgetting a business plan . You wouldn’t launch a ship at sea without establishing its routes and the direction you’ll steer it to. Without proper planning, your ship will end up adrift or worst, dramatically sink when the tides hit. And in a volatile commercial industry, the tides are constantly changing.

Avoid common startup mistakes by creating a business plan. A business plan not only strengthens your foundation but also helps you navigate the ever-changing field of business. Chances are your customers’ preferences will change over time and you have to keep up with them. Hence, a business plan also changes accordingly.

But how exactly do you create a business plan ? Is there a template to follow? Should you enlist the help of other experts to write it? Today, we’ll look into what should be included in your business plan and how it should be written. The first step is by understanding what it is and what it is for.

What is a business plan?

A business plan is an official company document that breaks down all the goals of a business and how to achieve them. It basically lays out the groundwork for your idea to come alive. It’s often referred to as the “blueprint of the business”, summarizing your goals.

Although there are many ways to write it, its key point usually discusses the financial, marketing, and operational strategies of the business.   

What is it for?

A business plan serves as a guide for a growing company. It’s a consistent reference for business owners and stakeholders to base critical decisions on. It’s especially useful for early-stage startups to attract investors. When a company doesn’t have a proven track record, it can lay out its full potential instead.

Not only is the business plan useful for the initial launching of a business, but it also helps with pivotal changes. Since the market is perpetually changing, it’s crucial that your plan also evolves with it. Hence, the goals and methods of achieving will be updated. In some cases, a whole new plan is created if the company wants to drastically move in a new direction.   

What’s included in a Business Plan

Although there’s no fixed formula for writing a business plan, there are some identifiable key points. These are generally the items factored in its creation:

1.     Executive Summary

The executive summary outlines the whole plan. You start with a clear introduction of who you are, what you sell, and what your ambitions are as a business. This section includes your mission statement, product description, and the basic overview of your company’s structure. It should also include your financial plans.   

2.     Business Description

The business description provides detailed information about your industry. It must describe its current outlook as well as its profit potential. You will go into detail about your target market and other organizations or businesses you cater to. Also, this section briefly discusses what problem the business is trying to solve.  

3.     Market Analysis

A business must have a firm understanding of its target market and should be able to prove its sustainability. The market analysis provides trends and studies about the target consumers—their size, demographics, buying power, and frequent activities. This section also touches briefly on the competitors.

4.     Product Development

Investors need a clear idea of how you would create and maintain your product. The development plan section contains the details of the product’s design; its production methods, lifecycle, marketing, and development budget. This includes the overall strategy of how it will be sold in the market.

5.     Marketing Strategies

The product is only as good as how much it will sell. Therefore, this section describes how you will present your products and services to the market. This will discuss your marketing campaigns, distribution channels, and types of media you’ll tap into. You will summarize how you intend to reach your customers and pitch your products to them.

6.     Operations and Management

Your investors need an overview of how the business functions. The operations plan highlights the logistics of the company such as team responsibilities, division tasks, and operational expenses. This helps track down who is responsible for certain areas of the business.  

7.     Financial Plans

Money mobilizes the idea. Hence, it’s important to keep an accurate record of where it’s going. This section shows the company’s monetary plans and its future projections. This includes financial statements, balance sheets, and third-party business transactions. For startups, it will mostly contain the target profit and estimates of expenses.    

Tips on Writing a Business Plan

Now that we have an idea of the business plan template , it’s time to learn how to write it effectively. 

Here are some things to keep in mind when you’re writing one for your business.

• Keep it concise. It serve as a guide for the company and the investors. It needs to be easy to understand and direct to the point. You can’t afford to waste a reader’s time by creating a 100-page business plan. Instead, aim for a summarized version of your plan, only highlighting the important points and outlining the rest.
• Avoid jargon. Ensure that everyone, especially investors, can understand your business plan. Do not include complex jargon in your content. Save the technicalities for the experts and simplify the terms in explaining your ideas.
• Keep it up-to-date. As previously mentioned, business plans are not static. Over time, a lot of things in the industry will change and might make your original plans obsolete. Frequently update your business plan according to what’s new in the field and with new methods you’re employing. Remember, a business plan is only useful if it’s still relevant.  

Build your Business

Business plans are important when you’re starting your business from scratch. However, the success of your business still heavily relies on their execution. A lot of startups fail because they can’t push through with what was proposed in the business plans.

More than just articulating your ideas, you need to do a lot more to make them come to life. For one, you’ll need the capital to kick things off and make everything operational. Second, you’ll need to hire the best people to run your operations. Lastly, you have to find investors to sustain your business.

One way to ensure that your business plan is properly executed is by enlisting the help of business experts. Full Scale is an offshore software development company that specializes in helping startups.

We can provide the talent and resources needed to begin your operations. Whether you need project managers, marketing specialists, or technical experts; we’ve got them all. We’ll take care of all the processes of recruitment and management so you can focus on your core competencies.

Ready to begin your entrepreneurial journey? Get your FREE consultation today!

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10 Simple Tips to Write a Successful Business Plan

"The absolute biggest business plan mistake you can make is to not plan at all." So writes Noah Parsons in his helpful blog post 17 Key Business Plan Mistakes to Avoid in 2023 . But how does one pull together all of the necessary components of a cohesive plan? It can feel overwhelming.

Eric Butow, CEO of online marketing ROI improvement firm Butow Communications Group, has teamed up with Entrepreneur Media to update the second edition of our best-selling book Write Your Business Plan to provide you with a simple, step-by-step process for creating a successful business plan. In the following excerpt, he gives ten tips to gather all of the critical information you will need to succeed.

1. Know your competition.

You need to name them and point out what makes you different from (and better than) each of them. But do not disparage your competition.

2. Know your audience.

You may need several versions of your business plan. For example, you may need one for bankers or venture capitalists, one for individual investors, and one for companies that may want to do a joint venture with you rather than fund you.

3. Have proof to back up every claim you make.

If you expect to be the leader in your field in six months, you have to say why you think that is. If you say your product will take the market by storm, you have to support this statement with facts. If you say your management team is fully qualified to make the business a success, be sure staff resumes demonstrate their experience.

Order Write Your Own Business Plan Now and Get 1 Month of Free Access to Business Planning Software Liveplan Premium

• Easy step-by-step business plan generator
• Built-in financial calculators
• 500+ sample plans and templates

4. Be conservative in all financial estimates and projections.

If you feel certain you'll capture 50 percent of the market in the first year, you can say why you think so and hint at what those numbers may be. But make your financial projections more conservative. For example, a 10 percent market share is much more credible.

5. Be realistic with time and resources available.

If you're working with a big company before you buy a business, you may think things will happen faster than they will once you have to buy the supplies, write the checks, and answer the phones yourself. Being overly optimistic with time and resources is a common error entrepreneurs make. Being realistic is important because it lends credibility to your presentation. Always assume things will take 20 percent longer than you anticipated. Therefore, twenty weeks is now twenty-four weeks.

6. Be logical.

Think like a banker and write what they would want to see.

7. Have a strong management team.

Make sure it has good credentials and expertise. Your team members don't have to have worked in the field. However, you need to draw parallels between what they've done and the skills needed to make your venture succeed. Don't have all the skills you need? Consider adding an advisory board of people skilled in your field and include their resumes.

Write Your Own Business Plan is available now at Entrepreneur Bookstore | Barnes & Noble | Amazon

8. Document why your idea will work.

Have others done something similar that was successful? Have you made a prototype? Include all the variables that can have an impact on the result or outcome of your idea. Show why some of the variables don't apply to your situation or explain how you intend to overcome them or make them better.

9. Describe your facilities and location for performing the work.

That includes equipment you use to create your products and/or services. If you'll need to expand, discuss when, where, and why.

10. Discuss payout options for the investors.

Some investors want a hands-on role. Some want to put associates on your board of directors. Some don't want to be involved in day-to-day activities at all. All investors want to know when they can get their money back and at what rate of return. Most want out within three to five years. Provide a brief description of options for investors, or at least mention that you're ready to discuss options with any serious prospect.

To dig deeper, buy Write Your Own Business Plan and get 1 month of free access to business planning software Liveplan Premium.

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• Business and self-employed
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Write a business plan

Download free business plan templates and find help and advice on how to write your business plan.

Business plan templates

Download a free business plan template on The Prince’s Trust website.

You can also download a free cash flow forecast template or a business plan template on the Start Up Loans website to help you manage your finances.

Business plan examples

Read example business plans on the Bplans website.

How to write a business plan

Get detailed information about how to write a business plan on the Start Up Donut website.

Why you need a business plan

A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.

A business plan helps you to:

• clarify your business idea
• spot potential problems
• set out your goals
• measure your progress

You’ll need a business plan if you want to secure investment or a loan from a bank. Read about the finance options available for businesses on the Business Finance Guide website.

It can also help to convince customers, suppliers and potential employees to support you.

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Business tips

Learn How to Craft a Successful Business Plan (Even with No Experience)

10 Minute Read

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Take the First Step in Learning How to Write a Business Plan, Even with No Experience

Antonio Del Cueto, CPA

May 8, 2024

Imagine your business as a spaceship blasting off into uncharted territory. It may sound exciting, but without a precise flight plan, that thrilling journey could end in a fiery crash. Similarly, most businesses don't fail because of bad ideas. They fail because they lack a clear roadmap.

This article will guide you through the process of crafting a business plan that's more than just numbers on a page. Learn the secret formulas that propel businesses from mere concepts to thriving realities.

Reimagining Traditional Business Plan Components

Executive summary with interactive elements.

Transform the executive summary into a dynamic experience using multimedia elements such as videos and interactive timelines. These components help demonstrate the business’s mission and goals, making it more attractive to would-be investors and potential customers.

Flexible Organizational Structures

Suggest designing an adaptable organizational framework that evolves according to strategic business needs and operational demands. This is especially beneficial for entrepreneurs who might need to navigate changes without a background in HR or traditional management.

Navigating Financial Management Without a Background

Simplified accounting tools.

For many new entrepreneurs, managing finances can feel overwhelming. Leveraging simplified digital accounting tools can significantly reduce this stress by automating most of the routine bookkeeping tasks. These tools are particularly beneficial for those without a financial background, making it easier to focus on other aspects of entrepreneurship.

• Automation : Choose tools that automate entries for sales, purchases, and payroll transactions, ensuring accuracy and saving time.
• User-Friendly Dashboard : Opt for software with an intuitive interface that simplifies financial tracking and report generation. This feature is essential for entrepreneurs who need to quickly access financial data without navigating complex menus.
• Integration Capabilities : It’s important to invest in software that integrates with other business tools (e.g., inventory management systems, e-commerce platforms) to streamline all financial processes.
• Scalability : As your business grows, you’ll need accounting software that can adapt to more complex financial demands without requiring a complete overhaul.

Further reading: Mastering Accounting for Tech Companies: The Ultimate Guide to Industry Accounting in the Technology Sector

Understanding business taxes.

A basic understanding of business taxes is essential for any entrepreneur, including those running a nonprofit or other types of organizations. Here are key elements your business plan should focus on:

• Fundamental Tax Responsibilities : Clearly outline what taxes the business is liable for, such as income, payroll, and sales taxes. This information should be specific to your business's location and structure.
• Maximizing Deductions : Include information on how to identify and claim relevant deductions to minimize tax liability. For example, if your business has significant equipment expenses or if you’re renting office space, you should know how these affect your taxes.
• Seeking Professional Advice : While basic tax guides are helpful, consulting with a tax advisor or strategist can provide tailored advice that ensures compliance and optimizes tax benefits. This step is integral for complex situations or where the tax implications could significantly impact business finances.

Further reading: Maximizing Your Small Business Tax Benefits: 2023 Tax Year Strategies & New Reporting Changes

Budgeting made easy.

Budgeting effectively is a core skill every business owner should develop to ensure financial stability and facilitate growth. Here’s how to incorporate straightforward budgeting strategies into your business operations:

• Expense Tracking : Start by categorizing expenses to track where every dollar is going. Categories might include rent, salaries, marketing, and web design. This clarity helps in making informed spending decisions.
• Financial Forecasting : Use historical data to predict future spending needs and income . This is especially important for planning major investments or when scaling operations.
• Regular Financial Reviews : Conducting regular reviews of your budget will help you stay on track and make necessary adjustments in response to financial performance or changing market conditions.
• Budgeting Tools : Recommend specific budgeting tools that are designed for small business needs. These tools should provide visual representations of financial data, making it easier to digest and act upon.

Each of these sections should be detailed in the business plan to demonstrate a thorough understanding and proactive management of financial aspects. This approach not only helps in securing funding (e.g., from banks or venture capital) but also in managing day-to-day financial operations efficiently.

Building Strategic Partnerships and Collaborative Networks

Cross-industry alliances.

Engaging in cross-industry alliances is a strategic move that can drive substantial business growth and innovation. These partnerships leverage complementary strengths and resources, offering a multitude of benefits:

• Innovation through Diverse Expertise : Combining knowledge and resources from different sectors can catalyze innovative solutions that neither partner could develop alone. For instance, a tech startup could collaborate with an established manufacturing firm to optimize production processes using advanced technology, resulting in a competitive edge in the market.
• Access to New Markets : Each industry has its unique customer base. By forming alliances, businesses can bridge their offerings to new audiences. A successful example could involve a collaboration between a software development company and a telecommunications firm to introduce a new tech product to a broader audience, utilizing the telecom firm's extensive customer network.
• Resource Sharing : Strategic partnerships allow for the sharing of critical assets such as technology, marketing channels, and expertise, leading to cost savings and enhanced product offerings. This might involve sharing R&D facilities or co-branding efforts for joint marketing campaigns.
• Enhanced Credibility and Brand Perception : Partnering with reputable firms in other sectors can significantly boost a company's credibility and strengthen its brand image, attracting more customers and potential investors.

Documenting cross-industry alliances in a business plan must specify the objectives, expected outcomes, and the nature of the collaboration. Include specific information on how these alliances align with the business’ strategy and how they contribute to achieving the company’s goals.

Customer Involvement in Product Development

Integrate customer feedback into the product development process for aligning products with market needs and enhancing customer satisfaction. This strategy not only improves product-market fit but also fosters customer loyalty:

• Direct Feedback for Better Products : Involving customers early in the development process ensures that the final product meets actual user needs and solves relevant problems. This can be achieved through methods like crowdsourcing ideas, beta testing new products, and incorporating user-generated content and suggestions into product design.
• Build Customer Loyalty : Customers who participate in the product development lifecycle are more likely to develop a deeper connection with the brand, increasing their likelihood of becoming repeat buyers and brand advocates.
• Agile Feedback Loops : Utilizing customer feedback during product testing phases allows for quick iterations and adjustments, greatly enhancing the product’s relevance and appeal upon launch.
• Unlocking New Ideas : Customers often see different uses for a product or identify missing features that can lead to significant innovations, helping a company stay ahead of competitors.

The business plan must include a dedicated section outlining how customer feedback will be integrated into product development processes. This section should also include pricing strategies informed by customer input to ensure market competitiveness.

For businesses seeking funding or partnership, a well-crafted business plan is essential. Including sections like Cross-Industry Alliances and Customer Involvement showcases a comprehensive approach to strategic planning and market engagement.

For simplicity and clarity, especially when presenting to potential investors, consider summarizing key strategies in a one-page overview within the larger business plan. This not only highlights the strategic vision but also ensures that readers can quickly grasp the core elements of your plan.

Key Takeaways

• Clarity is Key : Craft a clear, concise business plan to create financial projections and ensure a solid foundation.
• Know Your Audience : Tailor your plan to engage stakeholders, addressing related topics like brand awareness.
• Research Matters : Thorough market research strengthens your plan, supporting its solidity.
• Financial Focus : Develop realistic projections for revenue and expenses to fortify your business plan.
• Stay Adaptable : Flexibility is key to evolve strategies, including those for brand awareness, to maintain relevance.

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Product Description

• Written By Gregg Rosenzweig
• Updated: November 8, 2023

What is a product description? A product description is a piece of writing that conveys the features and benefits of a product, ranging from basic facts to stories that make a product compelling to an ideal buyer.

When you’re considering buying something online, what’s one of the first things you do? Scroll to the product description to find out more details, right?

That’s why this intro to your product or service is such a crucial component of marketing — it’s a chance to solidify the sale, increase customer confidence in your business, and reduce customer service emails by providing the answers to common questions upfront.

What is a product description?

A product description is a piece of writing that conveys the features and benefits of a product, ranging from basic facts to stories that make a product compelling to an ideal buyer.

Product descriptions commonly include…

• Physical product details and features
• Technical specifications
• Product uses and benefits
• Types of materials used in construction
• Stories relating the product to the ideal buyer
• How something’s produced (i.e., manufactured or handmade)
• Where something’s made (or the sourcing in the production chain)
• Sustainability details
• Pricing details
• Delivery details

How long should a product description be?

Depending on the cost, complexity, or purchase frequency of a product, the length can vary. For example, purchasing a car requires far more information than buying a pair of jeans.

• Short form (50 words or less)
• Standard (100  words)
• Long form (250+ words)

What can product descriptions do for a business?

Aside from educating and enticing potential customers, the best descriptions can help you differentiate your product and brand from your competitors by putting forward your most salient features and benefits.

As mentioned many times: ads only get you so far. If you want to ultimately convert customers with content , you have to give them the information they need to make a decision.

Benefits of product descriptions

Any business, regardless of industry, can use descriptions to sell their goods, whether they are intended for B2B, B2C, or D2C (direct to consumer) markets. 

Here’s a look at the benefits:

• Increases SEO for your product pages
• Helps consumers compare features and benefits
• Builds trust in your products and brand
• Improves conversion by moving customers further down the purchase funnel

Product description examples – short form

Product description examples – standard form

Product description examples – long form

Our team rated the examples above according to three degrees of quality ( Good, Better, Best ) to help you understand what makes a great product description and to better gauge the resources needed for your content plan.

In general, the degrees of content quality correspond to our three content levels ( General, Qualified, Expert ) based on the criteria below so you understand how much time it’ll take to create similar content and/or who you’d need to hire.

Please consider there are multiple variables that could determine the cost, completion time, or content level for any content piece with a perceived degree of quality. 

Want some help creating persuasive product descriptions? Talk to a content specialist at ClearVoice and find out how we can craft expert product descriptions that boost your SEO, increase trust, and get sales.

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Set your work hours and location in Outlook

Microsoft 365 helps you manage and share your work schedule. New features allow you to specify more details about your work schedule: from where you’re working (remotely or in the office) and whether you work different hours on different days. In addition, you can schedule meetings with others based on their work location, view the work location on people’s profile card, and see your out of office time reflected in your location.

Note:  Setting work hours is only available to individuals using a work or school account in Outlook with a qualifying Microsoft 365 subscription.

In this article:

Set work hours and location

View and update your work location

View the location of others, view suggestions to optimize your day, legacy work hours.

You can view work hours and location for yourself and others in classic Outlook, but you need to set them up with a work or school account using new Outlook or Outlook on the web following the steps below. Not sure of what version you're using? See  What version of Outlook do I have?   

Set your work hours and location

Set up your recurring work location from the Outlook Calendar or from Settings .

Set work hours from the Calendar

In the pop-up window, select the days you plan to go to the office. If your organization has multiple buildings, you might also see a dropdown to select the building you'll work from.

Note:  Building selection is only available if your organization set up a directory of buildings to pick from.

If you work remotely, select the days you're remote, and then select the checkbox I work remotely .

Select Set . Once your plan is set, a location icon appears on your calendar days to indicate where you're working from.

Note:  The setup experience from the Outlook Calendar is currently only available in new Outlook for Windows and Outlook on the web. Setting up work hours and location in Teams, Outlook Mobile, and Outlook for Mac is upcoming.

Set work hours and location from Settings

To set your work schedule in Settings , do the following: 

Select Settings   > Calendar .

Choose Work hours and location , and then define your work schedule by choosing days, times, and locations. 

When you set your workplace location, anyone in your organization can view this information.

To let others in your organization see additional details, such as what building you're in, go to the section Share your location , and select the checkbox Share office location details under the section.

To have others only see your work location set as In-office or Remote ,   uncheck  Share office location details .

When you're finished, click Save .

Note:  This new setup experience is currently available only in new Outlook for Windows and Outlook on the web, but setting up work hours and location will eventually be available in Teams and Outlook for iOS, Android, and Mac.

When your schedule changes, it is easy to update your work location from Outlook or Teams.

Note:  The option to change location per day is currently only available in Outlook on the web and Teams Desktop, but will eventually be available in classic Outlook for Windows, iOS, Android, and Mac. 

Update your work location from Outlook

When viewing your calendar, select the icon representing your scheduled work location and change the location as needed. The work location can be cleared by deselecting the location.

You can also choose to update your work location to a specific building. Buildings you set as part of your recurring work hours and location appear first as suggested places.

To choose a building, open the location picker.

Select Search for a place . You can also set your location to ony say, Office by searching for it.

Note:  Selecting a specific building is only available if your organization set up buildings as a location option. 

Set your Out of Office location

You can set your out of office location by selecting that option from the Work plan window.

Select the Work plan icon on the date you want to show you're out of office.

Type a title and set the date and time you plan to be out of office.

Click Save . An out of office appointment is added to your calendar and your Teams presence status is also updated.

Tip:  You can also create a calendar appointment from any device and set the Free/Busy option to Out of office. Your location is set to Out of office during that period of time.  

Update your work location from Teams

Select the circle icon with your profile picture and change the work location. The new location will be applied to your work hours for the remainder of the day and reflected in both Outlook and Teams.

Knowing where others are working from is important for scheduling and collaboration. You can view others’ locations from your own work location card, when scheduling from Outlook, or when viewing another person's profile card.    

View from your daily work location card

From your daily location card, you’ll be able to see who else you work with is going into the office that day. If you have a specific building set, the list will be filtered to others who have also set their location to the same place for that day. 

View when scheduling a meeting in Outlook

If others have set up their work hours and location, their work location will appear in the Scheduling Assistant, as shown below.

View another person's profile card

If you want to quickly look up where someone is working from, you can view their location in their profile card next to their availability.

Optimizing your work location schedule is important to maximize collaboration and connection on your in-person days. You can identify which days have suggestions by a red dot on the location icon for the day on the calendar surface. 

When you click on the location icon, a suggestion appears at the bottom of your daily location card. You can choose to take an action based on the suggestion or close the card.

Suggestions include:

Update your work plan for an in-person event

Book rooms for your meetings on in-office days

Note:  The suggestions experience is currently opt-in. - Please visit Microsoft Places for more details.

This new experience replaces the legacy work hours experience, but legacy work hours will continue to be supported. Because the legacy experience supports only a single start time and end time for the entire work week, the legacy work hours will approximate the modern work hours and location.  

For example, a user sets up the following schedule using the new work hours and location: Mondays, Tuesdays, Thursdays: 8:00 am - 5:00 pm & Wednesdays, Fridays: 10:00am - 7:00 pm. The times for their legacy work hours will be configured to the best approximation (8:00 am to 7:00 pm) – the minimum start time and maximum end time of the modern work hours.   

Until a user sets up modern working hours, changes to legacy working hours will also update the times in their modern working hours. However, once a user sets up (or updates) their modern working hours, future changes to legacy working hours will not propagate and overwrite the modern working hours.  

The exception to this rule is working hours time zone. Whenever the legacy working hours time zone changes, it will update the time zone for the modern working hours. This ensures that others can view accurate availability if someone on a legacy client travels across time zones.

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