different types of business plans and their components and the situation where each may be used

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The different types of business plans.

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When most of us think of business plans, we think of the starting-a-business kind: about 40 pages of detailed descriptions of every corner of a business — past, present and future — often with a funding request. But that’s just one type of business plan. This critical business tool comes in a wide variety of styles, with different formats and content needs, designed to address various goals and stages of business development. To find the right plan for your business goal -- startup, expansion, new product, self-assessment — you first need to understand the potential benefits and applications of each type.

Here, I’d like to share a clear breakdown of common types of business plans and their unique traits and benefits. While not every expert defines each plan the same way, the general approaches tend to hold true across the board. If you’re asked to provide a certain type of business plan, it’s always best to clarify the precise requirements and expectations of your audience.

To understand the range of business-plan models, it’s helpful to start with some business-plan terms:

Internal Versus External

A business plan can be internal or external. The trait refers to the plan’s audience: An internal plan is just for people inside your business, and typically a specific subset of people inside your business, such as the marketing or HR department. Internal plans require less information on company background and may call for a narrower financial view. They’re sometimes more casual in tone than external plans.

An external plan is for people outside your business, too; a business plan that includes a funding request is likely going to be external. An external plan includes full background information on the entire business and full financials and may contain greater detail overall.

Lean Versus Standard

You can also categorize business plans by scope — how deep they go into the subject matter. A lean business plan provides the highlights (maybe 10 pages total), while a standard business plan provides the whole picture (maybe 40 pages total). The trait is often linked to the audience: Most external plans fall into the standard realm, while internal plans can be lean or standard, depending on a company’s needs.

Lean plans can help you track your progress. They forego background and detailed descriptions, instead focusing on deadlines, budgeting, cash flow, strategy and tactics for implementing strategy and achieving goals. Standard plans provide a comprehensive view of a company and can help you score funding, flesh out strategy details and prepare for the unknown.

Types Of Business Plans

Business plans vary in format and content depending on their purposes. In my experience, some of the more common types of plans include:

Startup Plan

• Audience: External

• Depth: Standard

• Purpose: Development of a blueprint for building a successful business, secure funding

The startup plan’s purpose is to lay out the steps and details of getting a new venture up and running and provide a framework for the successful future of your business; often, its purpose is also to secure funding from outside sources. Startup plans include detailed, comprehensive information related to topics like business background, product or service, market and industry analyses, management bios and responsibilities, full financial details and analysis.

Feasibility Plan

• Audience: Generally internal

• Depth: Generally lean

• Purpose: Explore the viability of offering a new product or service

Sometimes called a “feasibility study,” the feasibility plan is less a business plan than a decision-making plan. You would create a feasibility plan if you’re thinking about growing, offering a new product or tapping into a new market; it helps you find out the likelihood of success so you know whether to move forward. A feasibility plan leaves out high-level concerns like strategy, focusing instead on assessment approach; the plan includes content specific to the proposed growth, including target demographics, market analyses and capital needs, along with objective standards for assessing feasibility.

Feasibility studies are typically internal, but not always. If a feasibility study is part of a funding request for the new product or service, you’ll have to include more of the standard elements, like company background and full financial data, in addition to the product-/service-specific topics.

Growth Plan

• Audience: Internal or external

• Depth: Lean or standard

• Purpose: Create a framework for proposed growth/expansion

The growth plan is like a startup plan for a new segment of your business. Whether internal or external, lean or standard, this tool goes into comprehensive detail on the specific growth at hand, including descriptions of the new venture, financial projections, capital needs, budget analyses and milestones. An external growth plan will need the usual descriptions of business, background, product, market and management along with a broader financial view.

One-Page Plan

• Depth: Lean

• Purpose: Give a brief overview of your company and prospects

If the lean plan provides the highlights from the standard plan, then the one-page plan provides the highlights from the lean plan. Also called a “business pitch,” the one-page plan is a snapshot of your business. It’s what you hand to potential vendors, partners and investors who aren’t ready to read the book version of your company, product, strategy and outlook. Content includes brief, powerful descriptions of your company, product/service, market, timeline and sales projections.

Customizing Your Approach

The business plans I’ve listed here can cover most small-business situations; however, the variations are endless, especially with new business-plan viewing and presentation modes like PowerPoint and mobile download. Picking the right business plan for your needs comes down to knowing what you want to achieve for your business and how you want to achieve it. If you choose the right type of plan and put the time into refining it, your business plan can take you well along the path to meeting your goal.

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5 Types Of Business Plans (+ Customizable Templates)

Find the best form of business plan for your venture and learn to align your business plan model with a winning strategy. Grab a template to get started.

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Short answer

What are the main types of business plans?

5 main types of business plans:

Startup business plan

One-pager business plan

Operational business plan

Feasibility business plan

Growth business plan

Aligning your strategy with the wrong type of business plan leads to failure

Crafting a sharp business plan is non-negotiable if you want your project to lift off the ground.

Yet, many miss the mark by not adapting their strategy to the appropriate type of business plan. It's like trying to open a door with the wrong key, frustrating and futile. This oversight can lead to miscommunication, disinterest from crucial stakeholders, and missed growth opportunities.

Here's where I step in, offering you a master key to unlock the true potential of effective business planning.

You'll learn about the strategic value of tailoring your plan to fit specific needs, whether you're kickstarting a venture, seeking investment, or plotting growth. Let's go.

What makes a successful business plan?

Creating a business plan that stands out involves more than just outlining your business's operations. It's about highlighting how your business differentiates itself and thrives within its industry.

Drawing inspiration from expert advice on business planning, here's an overview of the key elements that make a business plan successful. 6 key elements of a winning business plan:

Precision and structure: It's sharp, structured, and zeroes in on the business's main goals and strategies without unnecessary fluff.

Grounded objectives and forecasts: It sets attainable objectives and includes grounded financial forecasts, informed by thorough market analysis and industry insights.

Flexibility: It remains adaptable, ready to evolve alongside the business and shifting market dynamics.

Audience-specific design: It's crafted with the target audience in mind, whether that's attracting investors, securing loans, or engaging customers, ensuring it resonates and meets their expectations.

Clear communication: It communicates the business idea, market potential, and growth trajectory clearly and persuasively.

Defined action plan: It provides a clear set of steps to be undertaken to reach the business's goals, making it practical and actionable.

Internal vs. external business plan

The difference between internal and external business plans is based on their intended audience.

INTERNAL BUSINESS PLAN

EXTERNAL BUSINESS PLAN

Internal business plan

Internal documents tailored for departments such as marketing or HR emphasize succinct insights about the company and a more focused financial outlook. These documents usually adopt a less formal tone and are often managed using document management software to ensure efficient organization and accessibility.

Purpose: Align your team and streamline operations.

Key approach: Focus on strategy, flexibility, and clear metrics.

Tip: Regularly review and update the plan, and encourage team feedback.

External business plan

External documents reach out to those outside your immediate circle, such as investors or partners. They provide a thorough overview of your company, including detailed financials, and maintain a formal tone, typically aimed at securing funding or establishing partnerships.

Purpose: Impress and persuade investors or partners.

Key approach: Ensure clarity, and professionalism, and tailor content to your audience.

Tip: Understand your audience's priorities, and seek expert feedback before finalizing.

5 types of business plans to align your strategy with

Picking the right business plan is a big deal for founders, managers, and leaders. But let's be honest, diving into the sea of options can feel overwhelming.

Whether you're chasing funding, dreaming of expanding or looking to streamline your operations, I've got you covered.

I'm talking about seizing opportunities to not just meet your goals but to exceed them. Let's dive in and align your ambitions with the perfect plan.

1) Startup business plan

Audience: External stakeholders, including investors and financial institutions.

Depth: Comprehensive and detailed.

Purpose: To outline the steps for launching a new venture and securing funding.

The startup plan is your blueprint for launching a new venture.

It's packed with everything from a punchy executive summary that grabs you with the business concept to deep dives into market trends and who you're up against.

It lays out financial forecasts with precision, giving potential backers a crystal-clear picture of where you're headed in terms of profits and what you need to get there.

This plan isn't just about pulling in funds; it's your strategic playbook for carving out a successful path forward. For newbies on the entrepreneurial scene, it's nothing short of essential.

Here’s an example of a start-up business plan:

2) One-pager business plan

Audience: External parties, such as potential investors, partners, and vendors.

Depth: High-level and succinct.

Purpose: To quickly communicate the business's value proposition and growth potential.

The one-page plan condenses the core of a business strategy into a succinct and impactful document, crafted to immediately capture the attention of potential investors, partners, and vendors.

It showcases the unique value proposition, targets the market with effective strategies, and highlights financial insights and growth potential.

This streamlined plan turns out to be a game-changer for entrepreneurs looking to share their vision and strategy in a clear, easy-to-understand way.

It quickly gets the point across and sparks interest from potential stakeholders, encouraging them to dive deeper.

Here’s an example of a one-pager business plan:

3) Operational business plan

Audience: Internal management teams and department heads.

Depth: Detailed, focusing on day-to-day operations and short-term goals.

Purpose: To streamline internal processes and enhance operational efficiency.

The operational business plan is like the company's playbook, focusing on fine-tuning every single part of your operations.

It lays out the operational goals that sync up with your big-picture strategies, breaking down the exact tasks and processes you need to nail those targets.

You've got everything mapped out, from streamlining workflows to boosting efficiency, and even who's doing what to ensure you're all pulling in the same direction.

It also covers allocating resources, from budgets to materials, ensuring every department has what it needs.

Diving into the nitty-gritty of your day-to-day, this plan is key for spotting where you can do better, ramping up productivity, and hitting your short-term goals more smoothly.

Here’s an example of an operational business plan:

4) Growth business plan

Audience: Both internal stakeholders for strategic alignment and external parties for investment or partnership opportunities.

Depth: This can vary from lean to standard, depending on the audience.

Purpose: To provide a strategic framework for business expansion.

The growth plan feels like launching into a new adventure, much like a startup plan, but for your next big leap.

It's about charting a course for new markets, beefing up your product lines, or scaling operations to new heights.

This plan packs deep dives into the business, financial forecasts that map out your journey, and a rundown of the resources you'll need to expand.

It's a guiding light for businesses aiming for sustainable growth, laying out a clear path and milestones to hit along the way.

Whether it's guiding your team internally or dazzling potential investors, the growth plan pulls everyone together, focusing efforts on shared growth targets.

It's about making sure every stakeholder is in sync, marching towards the same ambitious goals.

Here’s an example of a growth business plan:

5) Feasibility business plan

Audience: Primarily internal, though it can be external if linked to funding requests.

Depth: Focused and streamlined.

Purpose: To assess the viability of a new product or service.

A feasibility plan, or feasibility study, acts as a litmus test for proposed business expansions or new product launches.

It delves into the practicality of the idea, examining market demand, technical requirements, and financial implications.

By focusing on specific growth opportunities and analyzing them against objective standards, this plan helps decision-makers within the organization determine whether to proceed with the venture.

It's a critical step in the planning process, ensuring resources are allocated to projects with the highest potential for success.

For ventures requiring external funding, a more detailed version of this plan may be necessary to convince investors of the project's feasibility.

If you want to learn more, check out our guides on business plan:

7 Key Components of a Precise Business Plan (2024)

How to Write a Business Plan (Examples & Templates)

How to Make a Killer Business Plan Presentation (+Templates)

Create a Business Plan One-Pager (+ Proven Templates)

Don’t let poor design sabotage your business plan

Designing a business plan presentation in today's digital age goes beyond mere text on a page, it's about crafting an engaging experience that captures and retains attention.

With the shift towards digital, the presentation of your plan is as crucial as its content.

5 crucial business plan design principles:

1) Transition from static to interactive

The era of static, text-heavy presentations is behind us. Modern business plans thrive on interactivity, incorporating elements like clickable links, dynamic charts, and embedded videos.

This approach not only enriches the reader's experience but also fosters a deeper engagement with the material, making your business plan far more compelling.

Here's what a static PPT looks like compared to an interactive deck:

Static PowerPoint

Interactive Storydoc

2) Implement scroll-based design

Ditch the cumbersome PDF format for a scroll-based design that mirrors the seamless experience of browsing a modern website.

This design choice is intuitive and aligns with our habitual online content consumption, making your business plan both accessible and enjoyable to navigate.

Here's an example of scroll-based design:

3) Prioritize mobile-friendliness

In a world where mobile devices dominate, ensuring your business plan looks great on any screen is non-negotiable.

Adopting responsive design guarantees that your plan is legible and appealing across all devices, from smartphones to desktops, ensuring your message resonates clearly with every reader.

4) Move to online documents

Forget about clunky Word docs or static PDFs. The future is online documents that allow for real-time updates, easy sharing, and collaboration.

They're not only convenient for you but also for your busy investors, offering access from anywhere, at any time.

For more information, check out our comparison of the best business plan document types .

5) Master visual storytelling

Leverage the power of visuals infographics, charts, and graphs to narrate your business's story.

Visuals can simplify complex information, making your key points more digestible and engaging than text alone could ever achieve.

Here's a great example of visual storytelling:

All forms of business plan templates to get you started

Just as a captivating presentation can transform the way your message is received, a well-crafted business plan is your gateway to turning your business vision into reality.

Why settle for a dry, uninspiring document when you can create a business plan that's a dynamic blueprint for success?

Consider your business plan as a journey for your readers — investors, partners, or internal team members — keeping them engaged from the executive summary to the final appendix.

These business plan templates serve as the perfect foundation for this journey.

I am a Marketing Specialist at Storydoc, I research, analyze and write on our core topics of business presentations, sales, and fundraising. I love talking to clients about their successes and failures so I can get a rounded understanding of their world.

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BUSINESS STRATEGIES

7 types of business plans every entrepreneur should know

• Amanda Bellucco Chatham
• Aug 3, 2023

What’s the difference between a small business that achieves breakthrough growth and one that fizzles quickly after launch? Oftentimes, it’s having a solid business plan.

Business plans provide you with a roadmap that will take you from wantrepreneur to entrepreneur. It will guide nearly every decision you make, from the people you hire and the products or services you offer, to the look and feel of the business website you create.

But did you know that there are many different types of business plans? Some types are best for new businesses looking to attract funding. Others help to define the way your company will operate day-to-day. You can even create a plan that prepares your business for the unexpected.

Read on to learn the seven most common types of business plans and determine which one fits your immediate needs.

What is a business plan?

A business plan is a written document that defines your company’s goals and explains how you will achieve them. Putting this information down on paper brings valuable benefits. It gives you insight into your competitors, helps you develop a unique value proposition and lets you set metrics that will guide you to profitability. It’s also a necessity to obtain funding through banks or investors.

Keep in mind that a business plan isn’t a one-and-done exercise. It’s a living document that you should update regularly as your company evolves. But which type of plan is right for your business?

7 common types of business plans

Startup business plan

Feasibility business plan

One-page business plan

What-if business plan

Growth business plan

Operations business plan

Strategic business plan

01. Startup business plan

The startup business plan is a comprehensive document that will set the foundation for your company’s success. It covers all aspects of a business, including a situation analysis, detailed financial information and a strategic marketing plan.

Startup plans serve two purposes: internally, they provide a step-by-step guide that you and your team can use to start a business and generate results on day one. Externally, they prove the validity of your business concept to banks and investors, whose capital you’ll likely need to make your entrepreneurial dreams a reality.

Elements of a startup business plan should include the following steps:

Executive summary : Write a brief synopsis of your company’s concept, potential audience, product or services, and the amount of funding required.

Company overview: Go into detail about your company’s location and its business goals. Be sure to include your company’s mission statement , which explains the “why” behind your business idea.

Products or services: Explain exactly what your business will offer to its customers. Include detailed descriptions and pricing.

Situation analysis: Use market research to explain the competitive landscape, key demographics and the current status of your industry.

Marketing plan: Discuss the strategies you’ll use to build awareness for your business and attract new customers or clients.

Management bios: Introduce the people who will lead your company. Include bios that detail their industry-specific background.

Financial projections: Be transparent about startup costs, cash flow projections and profit expectations.

Don’t be afraid to go into too much detail—a startup business plan can often run multiple pages long. Investors will expect and appreciate your thoroughness. However, if you have a hot new product idea and need to move fast, you can consider a lean business plan. It’s a popular type of business plan in the tech industry that focuses on creating a minimum viable product first, then scaling the business from there.

02. Feasibility business plan

Let’s say you started a boat rental company five years ago. You’ve steadily grown your business. Now, you want to explore expanding your inventory by renting out jet skis, kayaks and other water sports equipment. Will it be profitable? A feasibility business plan will let you know.

Often called a decision-making plan, a feasibility business plan will help you understand the viability of offering a new product or launching into a new market. These business plans are typically internal and focus on answering two questions: Does the market exist, and will you make a profit from it? You might use a feasibility plan externally, too, if you need funding to support your new product or service.

Because you don’t need to include high-level, strategic information about your company, your feasibility business plan will be much shorter and more focused than a startup business plan. Feasibility plans typically include:

A description of the new product or service you wish to launch

A market analysis using third-party data

The target market , or your ideal customer profile

Any additional technology or personnel needs required

Required capital or funding sources

Predicted return on investment

Standards to objectively measure feasibility

A conclusion that includes recommendations on whether or not to move forward

03. One-page business plan

Imagine you’re a software developer looking to launch a tech startup around an app that you created from scratch. You’ve already written a detailed business plan, but you’re not sure if your strategy is 100% right. How can you get feedback from potential partners, customers or friends without making them slog through all 32 pages of the complete plan?

That’s where a one-page business plan comes in handy. It compresses your full business plan into a brief summary. Think of it as a cross between a business plan and an elevator pitch—an ideal format if you’re still fine-tuning your business plan. It’s also a great way to test whether investors will embrace your company, its mission or its goals.

Ideally, a one-page business plan should give someone a snapshot of your company in just a few minutes. But while brevity is important, your plan should still hit all the high points from your startup business plan. To accomplish this, structure a one-page plan similar to an outline. Consider including:

A short situation analysis that shows the need for your product or service

Your unique value proposition

Your mission statement and vision statement

Your target market

Your management team

The funding you’ll need

Financial projections

Expected results

Because a one-page plan is primarily used to gather feedback, make sure the format you choose is easy to update. That way, you can keep it fresh for new audiences.

04. What-if business plan

Pretend that you’re an accountant who started their own financial consulting business. You’re rapidly signing clients and growing your business when, 18 months into your new venture, you’re given the opportunity to buy another established firm in a nearby town. Is it a risk worth taking?

The what-if business plan will help you find an answer. It’s perfect for entrepreneurs who are looking to take big risks, such as acquiring or merging with another company, testing a new pricing model or adding an influx of new staff.

A what-if plan is additionally a great way to test out a worst-case scenario. For example, if you’re in the restaurant business, you can create a plan that explores the potential business repercussions of a public health emergency (like the COVID-19 pandemic), and then develop strategies to mitigate its effects.

You can share your what-if plan internally to prepare your leadership team and staff. You can also share it externally with bankers and partners so that they know your business is built to withstand any hard times. Include in your plan:

A detailed description of the business risk or other scenario

The impact it will have on your business

Specific actions you’ll take in a worst-case scenario

Risk management strategies you’ll employ

05. Growth business plan

Let’s say you’re operating a hair salon (see how to create a hair salon business plan ). You see an opportunity to expand your business and make it a full-fledged beauty bar by adding skin care, massage and other sought-after services. By creating a growth business plan, you’ll have a blueprint that will take you from your current state to your future state.

Sometimes called an expansion plan, a growth business plan is something like a crystal ball. It will help you see one to two years into the future. Creating a growth plan lets you see how far—and how fast—you can scale your business. It lets you know what you’ll need to get there, whether it’s funding, materials, people or property.

The audience for your growth plan will depend on your expected sources of capital. If you’re funding your expansion from within, then the audience is internal. If you need to attract the attention of outside investors, then the audience is external.

Much like a startup plan, your growth business plan should be rather comprehensive, especially if the people reviewing it aren’t familiar with your company. Include items specific to your potential new venture, including:

A brief assessment of your business’s current state

Information about your management team

A thorough analysis of the growth opportunity you’re seeking

The target audience for your new venture

The current competitive landscape

Resources you’ll need to achieve growth

Detailed financial forecasts

A funding request

Specific action steps your company will take

A timeline for completing those action steps

Another helpful thing to include in a growth business plan is a SWOT analysis . SWOT stands for strengths, weaknesses, opportunities and threats. A SWOT analysis will help you evaluate your performance, and that of your competitors. Including this type of in-depth review will show your investors that you’re making an objective, data-driven decision to expand your business, helping to build confidence and trust.

06. Operations business plan

You’ve always had a knack for accessories and have chosen to start your own online jewelry store. Even better, you already have your eCommerce business plan written. Now, it’s time to create a plan for how your company will implement its business model on a day-to-day basis.

An operations business plan will help you do just that. This internal-focused document will explain how your leadership team and your employees will propel your company forward. It should include specific responsibilities for each department, such as human resources, finance and marketing.

When you sit down to write an operations plan, you should use your company’s overall goals as your guide. Then, consider how each area of your business will contribute to those goals. Be sure to include:

A high-level overview of your business and its goals

A clear layout of key employees, departments and reporting lines

Processes you’ll use (i.e., how you’ll source products and fulfill orders)

Facilities and equipment you’ll need to conduct business effectively

Departmental budgets required

Risk management strategies that will ensure business continuity

Compliance and legal considerations

Clear metrics for each department to achieve

Timelines to help you reach those metrics

A measurement process to keep your teams on track

07. Strategic business plan

Say you open a coffee shop, but you know that one store is just the start. Eventually, you want to open multiple locations throughout your region. A strategic business plan will serve as your guide, helping define your company’s direction and decision-making over the next three to five years.

You should use a strategic business plan to align all of your internal stakeholders and employees around your company’s mission, vision and future goals. Your strategic plan should be high-level enough to create a clear vision of future success, yet also detailed enough to ensure you reach your eventual destination.

Be sure to include:

An executive summary

A company overview

Your mission and vision statements

Market research

A SWOT analysis

Specific, measurable goals you wish to achieve

Strategies to meet those goals

Financial projections based on those goals

Timelines for goal attainment

Related Posts

What is a target market and how to define yours

21 powerful mission statement examples that stand out

Free business plan template for small businesses

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The Different Types of Business Plans

Free Business Plan Template

• June 29, 2023

Different situations call for different business plans.

Whether you want to acquire funds, analyze market risks, introduce a new product, or simply need a roadmap for business operations— a specifically tailored business plan is essential for different business purposes.

Identifying the type of business plan you require is quintessential so that you create a document fit for your business needs.

In this blog post, we will introduce you to the 7 different types of business plans and help you understand which suits your business needs the best.

Ready to get started? Let’s dive right in.

Types of business plans

Businesses in different business situations call for different business plans.

To understand different types of business plans, we will categorize them based on audience, scope, and purpose to instill better clarity in your minds.

Let us understand these in detail to help you choose your ideal business plan.

Based on audience

Business plans are broadly categorized into two types based on the type of audience they cater to.

1. Internal business plans

As the name suggests, an internal business plan is solely for the people inside the company. These can be specific to certain departments such as marketing, HR, production, etc.

Internal business plans focus primarily on the company’s goals, operations, finances, and personnel and define the strategies to achieve their goals.

2. External business plans

On the contrary, external business plans are intended for people outside the company, such as investors, banks, partners, etc.

These plans usually contain detailed information about the company’s background, finances, market share, and business strategies.

Based on scope

Similarly, business plans are classified into two types based on their size and the depth of information they encompass.

1. Standard business plan

A standard plan or traditional business plan is a professional document offering a comprehensive understanding of your business idea. It serves as a step-by-step guide to launching your business and offers a roadmap to operate it efficiently.

A standard plan follows a structured format and usually includes components such as

• Executive summary
• Company description
• Market analysis
• Products and services
• Marketing and sales plan
• Operations plan
• Financial plan
• Funding demand

Most entrepreneurs follow this structure to write a business plan and add depth to the sections that hold significant value to them.

Best for: Startups and businesses that require a detailed roadmap or operate in highly volatile markets. These plans are also used for getting funding approvals.

2. Lean business plans

A lean plan, also known as a startup business plan, is a condensed version of the standard business plan including highlights and summaries of all its sections.

Such plans empower entrepreneurs to kickstart their business endeavors with a minimum viable product and build it gradually by gathering real market feedback.

Lean business plans are crafted with brevity and outline your strategies, revenue model, tactics, and timeline.

• Strategies: How will you reach your goals
• Tactics: What are the KPIs to evaluate your performance
• Revenue model: How will you make money
• Timeline: Who will accomplish the tasks

Drafting such plans is not only easier, it is considered to be more efficient compared to a standard plan.

Best for: Entrepreneurs who want to quickly launch their business in a hot-moving market.

Based on purpose

Every business plan tends to solve a specific purpose. Let’s understand 7 different types of business plans based on different purposes.

1. One-page business plan

One-page business plans offer a snapshot of your entire business idea in one page. Such plans follow the same structure as traditional plans, however, they are much more concise and crisp.

One-page plans are simplified versions of detailed business plans and can be placed together in less than 10 minutes.

They are quite useful when you want to convey essential information in a brief document without missing out on important points.

Best for: One-page business plan is best suited for startups and small businesses that require rapid adjustments and quick implementation.

2. Growth business plan

A growth business plan combines the crispness of one-page business plans and the detailing of financial forecasts to enable prompt decision-making.

Such plans are quite handy when you want to upscale or grow your business without writing a full-fledged detailed business plan.

Businesses can compare their forecasts with the actuals, identify the discrepancies in the current strategy, and adjust it to ensure maximum growth when they have a clear demonstration of financials.

To prepare your growth business plan, outline the target market, business strategies, and a business model as you do in your one-page plans. And additionally, also include detailed financial projections for sales, cash flow, and revenue to help individuals make data-driven decisions.

Best for: A growth plan is best for businesses entering new markets, launching new products, scaling operations, or practicing a growth planning process.

3. Strategic business plan

Strategic business plans highlight your strategic objectives, define your business strategies, and outline a roadmap to take you there. It covers the nitty-gritty about your company’s goals, mission objectives, and long-term vision.

Such plans are extremely efficient in communicating your goals to internal teams and stakeholders, while ensuring everyone is on the same page as you.

Best for: Businesses and startups planning long-term growth and nonprofits aiming to increase their impact.

4. Feasibility business plan

A feasibility business plan is specifically designed to test the viability of a new product or business expansion in a new market. As opposed to a detailed business plan, such plans focus on two primary matters:

• Determining the existence of a market
• Determining the profits of the initiative

This type of business plan usually excludes all the other sections included in usual business plans. Instead, it concentrates mainly on the scope of a new initiative, its profitability, market analysis, competition, and associated financial implications.

It is mostly crafted for internal management and ends with recommendations on whether the decision to enter a new market or introduce a new product or service is viable or not.

Best for: Established businesses and early-stage startups to assess the viability of a specific product, market, or business idea before allocating significant resources.

5. Operational business plan

Operational plans are specific documents outlining processes and procedures of day-to-day business activities. Such plans focus on operational aspects of the business such as logistics, inventory, supply chain, production, and resource allocation.

A well-mapped operational plan serves as a guidebook for internal team and management. It streamlines the workflow, establishes SOPs, and offers a clear understanding of who will perform what tasks and what resources will be required.

There is no strict format outlining the contents of such a plan. The plan just needs to be clear, communicative, and viable enough to implement practically.

Best for: Established businesses to manage operations and resource allocation and startups to establish standard clear processes.

6. Nonprofit business plan

Nonprofit business plans are suited for businesses that operate for a charitable or social cause. Such plans are quite similar to traditional plans, however, they include an additional section where you explain the impact your non-profit organization will make in society.

Like a traditional plan, you will highlight the business concept, outline the market research, set the business goals, determine your business and promotional strategies, and demonstrate your team.

Additionally, you will include a section demonstrating the financial sustainability of the nonprofit venture. This is essential to attract donors, grants, and investors for your nonprofit business.

Best for: Nonprofit startups planning to secure funding and grants from financial institutions.

7. What-If business plan

What-if business plans are contingency plans used to draft strategies for the worst-case scenarios. This plan is usually less formal unless a funding request is included.

Such planning allows you to test and study the impact of different hypothetical situations related to the market, environment, competition, and legal regulations on your business.

Best for: Businesses in highly volatile markets and companies practicing crisis management. Also suited when considering mergers, price hikes, or undertaking any major business decision.

And those are some of the many different types of business plans you can have for your business. Wondering which one your business needs? Let us make your choice easier.

Choosing the right type of business plan

Here are the 2 criteria that will help in determining the right plan for your business.

The first step to choosing a business plan is to understand the purpose and objective of writing a business plan. For instance, your objective could be to acquire funds, guide an internal team, create a strategic roadmap, expand into a new geographic market, or prepare for contingencies.

Align your objective with the purpose of specific business plans and see which one suits you the best.

2. Scope of business

The scope and complexity of your business play a crucial role in determining the type of business plan you require. Take into account factors like products and service offerings, the scale of the business, and the business complexity to make a choice.

Even the stage of your business, depending on whether it is a startup or an established business, will influence this decision.

Start preparing your business plan with Upmetrics

You now have a proper understanding of the different types of business. If you’re not sure which one to pick, let us help you.

Our business planning software helps create stellar business plans and saves you the pain of writing one from scratch.

You can either choose a business plan sample and follow its step-by-step instructions to prepare your functional and actionable business plan.

Don’t have enough time to write the entire thing from scratch? Go ahead with our AI business plan generator ; it will quickly generate the entire plan for you..

Simply enter your business details, answer a few questions, and see your plan coming together in front of your eyes in less than 15 minutes.

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Frequently Asked Questions

What are the 8 most common sections of a business plan.

The 8 common components of a successful business plan include

• Management team

Which type of business plan is right for me?

The answer entirely depends upon what you want to achieve with your business plan. Apart from that the scope, nature, and complexity of your business will determine the type of business plan you need.

Do I need a business plan to start a business?

A business plan is highly recommended before you kickstart your business endeavor. It builds a solid foundation for your business idea and offers a roadmap to achieve your strategic and business objectives. A well-drafted business proposal increases the chances of your business venture succeeding.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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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 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.

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How to Write a Business Plan: Your Step-by-Step Guide

So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.

Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.

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What is a business plan, and when do you need one?

According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.

“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”

Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.

Different types of business plans

The four main types of business plans are:

Startup Business Plans

Internal business plans, strategic business plans, one-page business plans.

Let's break down each one:

If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.

Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.

Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.

Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.

As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .

Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.

Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).

A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.

How to create a business plan in 7 steps

Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:

1. Conduct your research

Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?

2. Define your purpose for the business plan

The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.

3. Write your company description

Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

4. Explain and show how the company will make money

A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.

For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.

5. Outline your marketing strategy

How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.

6. Explain how you’ll spend your funding

What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.

7. Include supporting documents

Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”

A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.

“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”

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The 8 Types of Business Plans Explained

by  Antony W

June 8, 2024

In this guide, we look at the different types of business plans and where they apply.

You can write a standard, lean, one-page, startup, strategic, feasibility, operational, or growth business plan depending on your needs.

Here’s an explanation for each:

1. Standard Business Plan

A standard business plan gives a detailed description of the operations of a business so stakeholders can understand the business well. A standard business plan features an executive summary , competitive analysis, SWOT analysis, and market summary.

The success of a standard business plan anchors on the information it provides. Therefore, focus on providing accurate information, so investors can have an easy time evaluating the risk and potential of the business before releasing funds.

A standard business plan should also include financial plan, problem analysis, and management objectives.

2. Lean Business Plan

A lean business plan is a condensed and straightforward document that highlights and summarizes the most important aspects of a business. Many entrepreneurs use this plan for efficient communication because it highlights only the most significant elements and milestones.

The necessary details to include in a lean business plan are operation strategies, financial projections, and the strategies necessary for business success in a rather competitive marketing landscape.

3. One-page Business Plan

A one-page business plan is more or less for direct to the point communication. It’s the best plan to use if you want to pitch investors and stakeholders who don’t have much time to read extensive documents.

The main benefit of a one-page business plan is that it presents only the most important information guaranteed to pique an audience’s attention. While the plan doesn’t have peripheral explanations, the information presented is enough to give a clear overview of the business.

A well-written one-page business plan summarizes the target market, operational requirements, objectives, forecasts, and products or services.

4. Startup Business Plan

A startup business plan states the requirements a business must meet to start operating in a specific market. It incorporates elements of lean and standard business plans, and its detailed sections are common when establishing new techniques likely to support the business’s overall operations.

A startup business plan has to address licensing, business permits, necessary equipment, and human resource management questions. And while the plan will vary based on the nature of business activities, comprehensive details are mandatory.

5. Strategic Business Plan

A strategic business plan describes the roadmap that a business leader intends to use to steer the enterprise in the right direction after overcoming different challenges and exploring opportunities.

You can only write a comprehensive strategic business plan after conducting an in-depth SWOT analysis and identifying the implementation processes necessary to put the business in the right direction.

The plan allows you to influence stakeholders to focus on specific aspects that eventually contribute to the overall success of the business.

6. Feasibility Business Plan

A feasibility plan allows a business to determine the existence of new markets and the potential benefits of investing in such markets.

To write a comprehensive feasibility plan, you have to understand the current business environment, evaluate opportunities, and consolidate funds to support the new ventures.

Keep in mind that your feasibility business plan may lead to recommendations that point out weaknesses and indicate ideas for growth after investments.

7. Operational Business Plan

An operational business plan is lean and focused on the implementation processes after goals are set and resources allocated to specific functions.

The specific sections of the plan will describe milestones, responsibilities, stakeholders, and goals.

Because an operational business plan focuses on internal processes, outsiders cannot contribute significantly to the business. However, they can participate in evaluation and tracking progress.

8. Growth Business Plan

Business growth is all about expansion. Therefore, you have to come up with a plan that identifies and integrate activities that facilitate expansion and drive the business to achieve specific milestone.

Your focus on growth requires accurate descriptions of long-term goals and the steps necessary to ignite the change you desire to see in your business.

The growth business plan integrates internal and external considerations to forecast, analyze, and secure resources for expansion. Incorporating What-if scenarios into the growth plan enables preparation for risky investments, ensuring readiness to address potential adverse outcomes.

What is a Business Plan?

We define a business plan as a document that describes a business’s goals and how it intends to achieve those goals. Business plans are for established enterprises and startups. A business plan is important because it documents an entity’s finance, marketing, and operational standpoint.

A comprehensive business plan acts as a powerful tool to attract investors, predict business demands in the future, and outline a long-term game plan for the business.  

How Do I Write a Business Plan?

You can write a business plan by following the process we’ve outlined to get the task completed.

• Conduct in-depth business and market research to learn more about your audience.
• Have clear goals before you start writing.
• Go straight to the point.
• Keep your tone, voice, and style consistent and professional as you write.

What is the Best Business Plan Writing Service?

Help for Assessment is the best business plan writing service online. Our company has highly trained writers with years of academic and business experience. Therefore, paying for our service will definitely get you the best results.

Our business plan writing service takes you from a completely blank page to a comprehensive document in just 7 days. It doesn’t matter if you have a strict deadline to beat or a flexible deadline to meet. You can count on our team.

How Much Do You Charge to Write a Business Plan?

We charge $12.99 to $40 per page to write a business plan. The overall cost for a business plan depends on the number of pages ordered, number of charts requested, level of expertise required, number of slides, and urgency. 

Help for Assessment offers up to 10% discount to new customers. Therefore, you can save money and benefit from our cost-effective writing if you’re on tight budget.

About the author 

Antony W is a professional writer and coach at Help for Assessment. He spends countless hours every day researching and writing great content filled with expert advice on how to write engaging essays, research papers, and assignments.

What Type of Business Plan Do You Need?

8 min. read

Updated October 27, 2023

We get this question a lot, mainly because there are so many different things labelled as business plans: strategic plans, annual plans, operational plans, feasibility plans, and, of course, what most people think of, business plans for startups seeking investment. And also, what real business owners want—lean business plans for better management.

In this article, we’re going to help you figure out which plan is the one for you.

• Start with this: Form follows function

Put all business plans into this basic principle: form follows function . What do you want your business plan to do for you? That business objective should determine what kind of a plan you need.

All businesses start with a lean plan

These are things that every business owner needs to do in order to run the business effectively. They apply to all businesses, large or small, startup or not:

• Develop and execute strategy
• Set priorities
• Allocate efforts and resources according to priorities
• Establish tasks, responsibilities, and performance expectations
• Track results and compare them to expectations
• Manage cash flow
• Budget sales and spending

So, every business is better off with a lean plan.

It’s a short, effective collection of bullet points, lists, and forecasts, covering all of the functions above:

• It starts with bullet points for strategy. This isn’t text for outsiders. It’s not explanations; it’s reminders, for the entrepreneur and her team, of the major strategy points. Strategy is focus, so it’s a reminder of the target market, the product (or service), and the business identity. Sometimes it also includes a definition of success. It’s important, but just the bullet point reminders.
• Then come tactics. Strategy is useless without tactics. These are also bullet points. They are the important decisions made regarding key points of a marketing plan, product plan, financial plan, recruitment plan … not explanations or details for outsiders, but just the main points for you and your team. Think about pricing, channels, social media, launch dates, products, services, features, and so forth.
• Third part is concrete specifics. That includes a list of assumptions, important milestones, tasks, deadlines, responsibilities, and measurable performance expectations.
• The fourth and final part is budgets. That’s sales forecast, spending budget, and cash flow.

Make this the lean plan and add a regular process of review and revision to keep it fresh. You can download a free template for a lean business plan here . Can you imagine any business that isn’t better off for having at least this kind of planning in place, even if they don’t need an elaborate business plan? I can’t.

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• Lean plan for startups:

All startups can benefit from the lean plan above plus one extra ingredient: starting costs, and starting plans.

Starting costs

Starting costs are a matter of two lists: one for starting expenses, the other for starting assets.

The first list includes expenses like legal costs, logo, initial website, fixing up a location, and similar expenses that a startup business incurs once; and in some cases the expense of running expenses, such as rent and payroll, that have to start before launch for practical reasons.

The second includes assets required at start. These are items like starting inventory, equipment, and starting cash.

Startup plan

Keep it simple like the tactics in the normal lean plan, but add some bullets and concrete specifics for tasks and timing to get a startup going. These are items like choosing the location, setting up initial branding and website,  accounts for social media, and launch events.

• A plan for the SBA, banks, investors, buyers, and partners

If you need to present a business plan to your bank or prospective investors, start with your latest revised lean business plan as the first draft. The lean plan is just for management. Dress that up to include the additional content that outsiders will want and need.

Add summaries and explanations

Add a very strong executive summary because some of your outsider target readers will read only that. Keep it short and make it fit the need. Often there’s a selling-the-idea or selling-the-potential purpose to a written plan, and in that case you make the summary include the highlights you want those readers to see to pique their interest.

Your lean plan doesn’t include details about your strategy, your company, your market, or your product. It has just summary tactics for marketing plan, product plan, financial plan, and management plan. Think of your readers—outsiders looking in—and help them understand the business. Achieve the specific goal of this dressed-up business plan.

Add formal financial projections

While the lean plan might be fine with just sales forecast, expense budget, and cash management, a business plan for a business plan event normally has to include formal financial projections that respect finance and accounting standards and include Profit and Loss, Cash Flow, and Balance Sheet. Banks will want to see projections of key ratios as well, and investors will like a Use of Funds table and sometimes a Break-even Analysis.

Stay mindful of the business purpose

We call it the business plan event—that’s the specific business need for a dressed-up plan. Form follows function here too.

A plan for investors will emphasize different elements than a plan for a bank loan. The investors want to see product-market fit; potential growth; something proprietary and protectable like technology, patents, trade secrets, or so-called secret sauce; and potential investor exit in a few years. The bank wants to see stability, credit history, collateral, and guarantees. A business broker or business buyer wants to see what can be most useful under new ownership.

Plan, pitch, and summary memo go together

Some business plan events require some special variations of your plan output. These days investors expect to see a short summary memo first. That’s a two to five page summary of your plan, a lot like your executive summary, but it stands alone. Then, if they like what they see from the summary, investors will want a pitch presentation. That’s a 20-40 minute slide presentation that backs up a verbal presentation, you with investors.

Neither summary memo nor pitch deck stand alone. They have to be summaries of your underlying plan. A pitch presentation is only really successful if it summarizes a real plan with a lot of concrete details on financials, milestones, traction, and next steps. Don’t get caught without a plan you can dig into when investors start asking more questions.

• Business plans have lots of different names

Shakespeare wrote, “a rose by any other name would smell as sweet.” I say a plan by any other name is still a plan. Here are some common varieties and business plan vocabulary.

Most lean plans are also internal plans

An operations plan—also called an annual plan—is a type of internal plan. An operations plan includes specific implementation milestones, project deadlines, and responsibilities of team members and managers. This is the plan used for staying on track to meet your goals as a business. Planning for your goals as a business allows your company to assign priorities, focus on results, and track your progress. Your operations plan covers the inner workings of your business. It outlines the specifics of who should be doing what, and when they should be doing it.

Of course, cash flow figures prominently here as well. For example, your milestones will need to have sufficient funding for their implementation, and you’ll need to track your progress so you know how much you’re spending.

A growth or expansion plan focuses on a specific area of a business, or a subset of the business. For example, a plan for the creation of a new product is a growth plan. These plans could be internal plans or not, depending on whether they are being linked to loan applications or new investment. An expansion plan requiring new outside investment would include full company descriptions and background on the management team, just the same as a standard plan for investors would. Loan applications would require this much detail as well.

However, an internal plan used to set up the steps for growth or expansion that is funded internally could skip these descriptions. It might not be necessary to include detailed financial projections for the company overall, but it should at least include detailed forecasts of sales and expenses for the new venture or product.

What’s a strategic plan?

A strategic plan is another kind of internal plan. A strategic plan incorporates the financial information and milestones of an operations plan, but focuses more on setting company-wide priorities. As you build the strategy for your company and decide how to implement it, you will want to examine your strengths and weaknesses as a business. What does your company do well? As your company grows, you want to play to your strengths. Strategy is often a matter of selecting the right opportunities. Resources should be funneled strategically to the areas where they will provide the biggest overall benefits.

Once you have an idea of your strategy, you must have a plan for implementing it. This is where the milestones portion of the plan becomes key. To effectively execute your strategies, it’s critical to assign responsibilities and have a schedule for following through. The implementation tactics you use will actively move you in the right direction toward achieving your goals.

Resources for moving forward

Reading about the different types of business plans is a good jumping-off point in the process of creating a business plan. If you’re looking for more information about business plans and how to write them, you’ll find our business planning tutorials  and sample business plan library to be helpful resources.

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

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Start » startup, 5 types of business plans for startups.

If you’re a startup, here are five different types of business plans to help achieve your professional goals.

Writing a business plan is an important process for every startup. In its simplest form, a business plan is a formal document that contains your goals for the company and the timeline in which you'd like to achieve them. While many stick to writing the "standard" business plan, there are various types of business plans you can choose from, depending on your goals. Choosing the right plan for your business can ease the writing process and help you better achieve your objectives. Here are five types of business plans to help you decide which is right for you.

[Read: 5 Common Sense Reasons to Write a Business Plan and 7 Mistakes to Avoid ]

Standard plan

A standard business plan (often referred to as a “working plan”) sets an overview of your company, states your goals and outlines how and when you will achieve them. For any business, they’re an important tool in helping you secure financing, such as a loan or an investment. Lenders and investors will want to know how you plan to use their money and make a profit. A business plan will accurately state how you intend to do this, list the achievable goals and put them in a realistic time frame.

Other aspects to include in your plan depend on your audience. You may include more information about cash flow and expenses for investors, or more of the day-to-day operations and goals for your employees.

What-if plan

In business, not everything will go according to plan. A what-if business plan outlines different roadblocks your company might battle so you can be prepared for anything. Because businesses are often at the whims of external factors such as the stock market or supply chain, this plan outlines the various predictable scenarios your company could face. In writing this plan, you might consider including the worst-case scenario to reassure investors that even if something goes wrong, you will have a way to financially recover. This plan can be part of the standard business plan or exist entirely on its own.

In business, not everything will go according to plan. A what-if business plan outlines different roadblocks your company might battle so you can be prepared for anything.

One-page plan

Your business plan should be filled with detailed information about various aspects of your business. However, sometimes you'll come across someone outside of a formal pitch and want to give them a condensed version of your plan for quick reference. A one-page business plan outlines your plan in five simple, easy-to-read sections: the demand, your solution, your business model, your management team and your plan of action. The content on your one-page plan should be a summarized version of your more robust business plan.

[Read: Starting Over? How to Write a Business Plan for a Post-Pandemic World ]

Startup plan

If you're an entrepreneur who's in the early stages of planning their business, your plan may look a little different. A startup business plan is for potential investors to get an idea of your new company and what you hope to achieve as your company grows. This plan should include an executive summary, your background, what your service or product will provide, your market evaluations, startup costs and your financial projections.

Because this is a plan for a business that does not yet exist or is in its infantry, it is essential to outline who you are and your background, as well as your proven track record. Investors want to know if they can trust you with their money to start a brand-new business. They'll be more open to financing your idea if they know you have similar experience or have worked in or created a startup previously.

Expansion plan

An expansion plan is written when a business is looking to scale themselves and requires additional resources for that development. These resources can include additional employees, new materials or a financial investment. Within this plan, include details of your company's background and how you've grown to where you are today. Then, outline how these additional resources will contribute to the expansion of your company and what that expansion will mean for your overall growth.

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6 Types of Business Plans

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What Are the Six Elements of a Business Plan?

What are the benefits of a business plan, examples of business feasibility reports.

• How to Write a Business Synopsis
• How to Create a New Business Plan

Business plans guide owners, management and investors as businesses start up and grow through stages of success. A business owner or prospective business owner writes a business plan to clarify each aspect of his business, describing the objectives that will anticipate and prepare for growth. Savvy business owners write a business plan to guide management and to promote investment capital.

Types of business plans include, but are not limited to, start-up, internal, strategic, feasibility, operations and growth plans.

Start-Up Business Plans

New businesses should detail the steps to start the new enterprise with a start-up business plan. This document typically includes sections describing the company, the product or service your business will supply, market evaluations and your projected management team. Potential investors will also require a financial analysis with spreadsheets describing financial areas including, but not limited to, income, profit and cash flow projections.

Internal Business Plans

Internal business plans target a specific audience within the business, for example, the marketing team who need to evaluate a proposed project. This document will describe the company’s current state, including operational costs and profitability, then calculate if and how the business will repay any capital needed for the project. Internal plans provide information about project marketing, hiring and tech costs. They also typically include a market analysis illustrating target demographics, market size and the market’s positive effect on the company income.

Strategic Business Plans

A strategic business plan provides a high-level view of a company’s goals and how it will achieve them, laying out a foundational plan for the entire company. While the structure of a strategic plan differs from company to company, most include five elements: business vision, mission statement, definition of critical success factors, strategies for achieving objectives and an implementation schedule. A strategic business plan brings all levels of the business into the big picture, inspiring employees to work together to create a successful culmination to the company’s goals.

Feasibility Business Plans

A feasibility business plan answers two primary questions about a proposed business venture: who , if anyone, will purchase the service or product a company wants to sell, and if the venture can turn a profit. Feasibility business plans include, but are not limited to, sections describing the need for the product or service, target demographics and required capital. A feasibility plan ends with recommendations for going forward.

Operations Business Plans

Operations plans are internal plans that consist of elements related to company operations . An operations plan, specifies implementation markers and deadlines for the coming year. The operations plan outlines employees’ responsibilities.

Growth Business Plans

Growth plans or expansion plans are in-depth descriptions of proposed growth and are written for internal or external purposes. If company growth requires investment, a growth plan may include complete descriptions of the company, its management and officers. The plan must provide all company details to satisfy potential investors. If a growth plan needs no capital, the authors may forego obvious company descriptions, but will include financial sales and expense projections.

• Entrepreneur: The 4 Types of Business Plans
• YourBusinessPal.com: Business Plan Example
• BPlans.com: Free Sample Business Plans

Alyson Paige has a master's degree in canon law and began writing professionally in 1998. Her articles specialize in culture, business and home and garden, among many other topics.

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8 Components of a Business Plan

Back to Business Plans

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on February 19, 2023 Updated on February 27, 2024

A key part of the business startup process is putting together a business plan , particularly if you’d like to raise capital. It’s not going to be easy, but it’s absolutely essential, and an invaluable learning tool. 

Creating a business plan early helps you think through every aspect of your business, from operations and financing to growth and vision. In the end, the knowledge you’ll gain could be the difference between success and failure. 

But what exactly does a business plan consist of? There are eight essential components, all of which are detailed in this handy guide.

1. Executive Summary 

The executive summary opens your business plan , but it’s the section you’ll write last. It summarizes the key points and highlights the most important aspects of your plan. Often investors and lenders will only read the executive summary; if it doesn’t capture their interest they’ll stop reading, so it’s important to make it as compelling as possible.

The components touched upon should include:

• The business opportunity – what problem are you solving in the market?
• Your idea, meaning the product or service you’re planning to offer, and why it solves the problem in the market better than other solutions.
• The history of the business so far – what have you done to this point? When you’re just getting started, this may be nothing more than coming up with the idea, choosing a business name , and forming a business entity.
• A summary of the industry, market size, your target customers, and the competition.
• A strong statement about how your company is going to stand out in the market – what will be your competitive advantage?
• A list of specific goals that you plan to achieve in the short term, such as developing your product, launching a marketing campaign, or hiring a key person. 
• A summary of your financial plan including cost and sales projections and a break-even analysis.
• A summary of your management team, their roles, and the relevant experience that they have to serve in those roles.
• Your “ask”, if applicable, meaning what you’re requesting from the investor or lender. You’ll include the amount you’d like and how it will be spent, such as “We are seeking $50,000 in seed funding to develop our beta product”. 

Remember that if you’re seeking capital, the executive summary could make or break your venture. Take your time and make sure it illustrates how your business is unique in the market and why you’ll succeed.

The executive summary should be no more than two pages long, so it’s important to capture the reader’s interest from the start. 

• 2. Company Description/Overview

In this section, you’ll detail your full company history, such as how you came up with the idea for your business and any milestones or achievements. 

You’ll also include your mission and vision statements. A mission statement explains what you’d like your business to achieve, its driving force, while a vision statement lays out your long-term plan in terms of growth. 

A mission statement might be “Our company aims to make life easier for business owners with intuitive payroll software”, while a vision statement could be “Our objective is to become the go-to comprehensive HR software provider for companies around the globe.”

In this section, you’ll want to list your objectives – specific short-term goals. Examples might include “complete initial product development by ‘date’” or “hire two qualified sales people” or “launch the first version of the product”. 

It’s best to divide this section into subsections – company history, mission and vision, and objectives.

3. Products/Services Offered 

Here you’ll go into detail about what you’re offering, how it solves a problem in the market, and how it’s unique. Don’t be afraid to share information that is proprietary – investors and lenders are not out to steal your ideas. 

Also specify how your product is developed or sourced. Are you manufacturing it or does it require technical development? Are you purchasing a product from a manufacturer or wholesaler? 

You’ll also want to specify how you’ll sell your product or service. Will it be a subscription service or a one time purchase?  What is your target pricing? On what channels do you plan to sell your product or service, such as online or by direct sales in a store? 

Basically, you’re describing what you’re going to sell and how you’ll make money.

• 4. Market Analysis 

The market analysis is where you’re going to spend most of your time because it involves a lot of research. You should divide it into four sections.

Industry analysis 

You’ll want to find out exactly what’s happening in your industry, such as its growth rate, market size, and any specific trends that are occurring. Where is the industry predicted to be in 10 years? Cite your sources where you can by providing links. 

Then describe your company’s place in the market. Is your product going to fit a certain niche? Is there a sub-industry your company will fit within? How will you keep up with industry changes? 

Competitor analysis 

Now you’ll dig into your competition. Detail your main competitors and how they differentiate themselves in the market. For example, one competitor may advertise convenience while another may tout superior quality. Also highlight your competitors’ weaknesses.

Next, describe how you’ll stand out. Detail your competitive advantages and how you’ll sustain them. This section is extremely important and will be a focus for investors and lenders. 

Target market analysis 

Here you’ll describe your target market and whether it’s different from your competitors’.  For example, maybe you have a younger demographic in mind? 

You’ll need to know more about your target market than demographics, though. You’ll want to explain the needs and wants of your ideal customers, how your offering solves their problem, and why they will choose your company. 

You should also lay out where you’ll find them, where to place your marketing and where to sell your products. Learning this kind of detail requires going to the source – your potential customers. You can do online surveys or even in-person focus groups. 

Your goal will be to uncover as much about these people as possible. When you start selling, you’ll want to keep learning about your customers. You may end up selling to a different target market than you originally thought, which could lead to a marketing shift. 

SWOT analysis 

SWOT stands for strengths, weaknesses, opportunities, and threats, and it’s one of the more common and helpful business planning tools.   

First describe all the specific strengths of your company, such as the quality of your product or some unique feature, such as the experience of your management team. Talk about the elements that will make your company successful.

Next, acknowledge and explore possible weaknesses. You can’t say “none”, because no company is perfect, especially at the start. Maybe you lack funds or face a massive competitor. Whatever it is, detail how you will surmount this hurdle. 

Next, talk about the opportunities your company has in the market. Perhaps you’re going to target an underserved segment, or have a technology plan that will help you surge past the competition. 

Finally, examine potential threats. It could be a competitor that might try to replicate your product or rapidly advancing technology in your industry. Again, discuss your plans to handle such threats if they come to pass. 

5. Marketing and Sales Strategies

Now it’s time to explain how you’re going to find potential customers and convert them into paying customers.  

Marketing and advertising plan

When you did your target market analysis, you should have learned a lot about your potential customers, including where to find them. This should help you determine where to advertise. 

Maybe you found that your target customers favor TikTok over Instagram and decided to spend more marketing dollars on TikTok. Detail all the marketing channels you plan to use and why.

Your target market analysis should also have given you information about what kind of message will resonate with your target customers. You should understand their needs and wants and how your product solves their problem, then convey that in your marketing. 

Start by creating a value proposition, which should be no more than two sentences long and answer the following questions:

• What are you offering
• Whose problem does it solve
• What problem does it solve
• What benefits does it provide
• How is it better than competitor products

An example might be “Payroll software that will handle all the payroll needs of small business owners, making life easier for less.”

Whatever your value proposition, it should be at the heart of all of your marketing.

Sales strategy and tactics 

Your sales strategy is a vision to persuade customers to buy, including where you’ll sell and how. For example, you may plan to sell only on your own website, or you may sell from both a physical location and online. On the other hand, you may have a sales team that will make direct sales calls to potential customers, which is more common in business-to-business sales.

Sales tactics are more about how you’re going to get them to buy after they reach your sales channel. Even when selling online, you need something on your site that’s going to get them to go from a site visitor to a paying customer. 

By the same token, if you’re going to have a sales team making direct sales, what message are they going to deliver that will entice a sale? It’s best for sales tactics to focus on the customer’s pain point and what value you’re bringing to the table, rather than being aggressively promotional about the greatness of your product and your business. 

Pricing strategy

Pricing is not an exact science and should depend on several factors. First, consider how you want your product or service to be perceived in the market. If your differentiator is to be the lowest price, position your company as the “discount” option. Think Walmart, and price your products lower than the competition. 

If, on the other hand, you want to be the Mercedes of the market, then you’ll position your product as the luxury option. Of course you’ll have to back this up with superior quality, but being the luxury option allows you to command higher prices.

You can, of course, fall somewhere in the middle, but the point is that pricing is a matter of perception. How you position your product in the market compared to the competition is a big factor in determining your price.

Of course, you’ll have to consider your costs, as well as competitor prices. Obviously, your prices must cover your costs and allow you to make a good profit margin. 

Whatever pricing strategy you choose, you’ll justify it in this section of your plan.

• 6. Operations and Management 

This section is the real nuts and bolts of your business – how it operates on a day-to-day basis and who is operating it. Again, this section should be divided into subsections.

Operational plan

Your plan of operations should be specific , detailed and mainly logistical. Who will be doing what on a daily, weekly, and monthly basis? How will the business be managed and how will quality be assured? Be sure to detail your suppliers and how and when you’ll order raw materials. 

This should also include the roles that will be filled and the various processes that will be part of everyday business operations . Just consider all the critical functions that must be handled for your business to be able to operate on an ongoing basis. 

Technology plan

If your product involves technical development, you’ll describe your tech development plan with specific goals and milestones. The plan will also include how many people will be working on this development, and what needs to be done for goals to be met.

If your company is not a technology company, you’ll describe what technologies you plan to use to run your business or make your business more efficient. It could be process automation software, payroll software, or just laptops and tablets for your staff. 

Management and organizational structure 

Now you’ll describe who’s running the show. It may be just you when you’re starting out, so you’ll detail what your role will be and summarize your background. You’ll also go into detail about any managers that you plan to hire and when that will occur.

Essentially, you’re explaining your management structure and detailing why your strategy will enable smooth and efficient operations. 

Ideally, at some point, you’ll have an organizational structure that is a hierarchy of your staff. Describe what you envision your organizational structure to be. 

Personnel plan 

Detail who you’ve hired or plan to hire and for which roles. For example, you might have a developer, two sales people, and one customer service representative.

Describe each role and what qualifications are needed to perform those roles. 

• 7. Financial Plan 

Now, you’ll enter the dreaded world of finance. Many entrepreneurs struggle with this part, so you might want to engage a financial professional to help you. A financial plan has five key elements.

Startup Costs

Detail in a spreadsheet every cost you’ll incur before you open your doors. This should determine how much capital you’ll need to launch your business. 

Financial projections 

Creating financial projections, like many facets of business, is not an exact science. If your company has no history, financial projections can only be an educated guess. 

First, come up with realistic sales projections. How much do you expect to sell each month? Lay out at least three years of sales projections, detailing monthly sales growth for the first year, then annually thereafter. 

Calculate your monthly costs, keeping in mind that some costs will grow along with sales. 

Once you have your numbers projected and calculated, use them to create these three key financial statements: 

• Profit and Loss Statement , also known as an income statement. This shows projected revenue and lists all costs, which are then deducted to show net profit or loss. 
• Cash Flow Statement. This shows how much cash you have on hand at any given time. It will have a starting balance, projections of cash coming in, and cash going out, which will be used to calculate cash on hand at the end of the reporting period.
• Balance Sheet. This shows the net worth of the business, which is the assets of the business minus debts. Assets include equipment, cash, accounts receivables, inventory, and more. Debts include outstanding loan balances and accounts payable.

You’ll need monthly projected versions of each statement for the first year, then annual projections for the following two years.

Break-even analysis

The break-even point for your business is when costs and revenue are equal. Most startups operate at a loss for a period of time before they break even and start to make a profit. Your break-even analysis will project when your break-even point will occur, and will be informed by your profit and loss statement. 

Funding requirements and sources 

Lay out the funding you’ll need, when, and where you’ll get it. You’ll also explain what those funds will be used for at various points. If you’re in a high growth industry that can attract investors, you’ll likely need various rounds of funding to launch and grow. 

Key performance indicators (KPIs)

KPIs measure your company’s performance and can determine success. Many entrepreneurs only focus on the bottom line, but measuring specific KPIs helps find areas of improvement. Every business has certain crucial metrics. 

If you sell only online, one of your key metrics might be your visitor conversion rate. You might do an analysis to learn why just one out of ten site visitors makes a purchase. 

Perhaps the purchase process is too complicated or your product descriptions are vague. The point is, learning why your conversion rate is low gives you a chance to improve it and boost sales. 

8. Appendices

In the appendices, you can attach documents such as manager resumes or any other documents that support your business plan.

As you can see, a business plan has many components, so it’s not an afternoon project. It will likely take you several weeks and a great deal of work to complete. Unless you’re a finance guru, you may also want some help from a financial professional. 

Keep in mind that for a small business owner, there may be no better learning experience than writing a detailed and compelling business plan. It shouldn’t be viewed as a hassle, but as an opportunity! 

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14 Types of Business Plans and Their Functions

Are you about starting a business but you don’t know what kind of business plan to write? If YES, here are 14 types of business plans and their functions.

A business plan is a formal written document that contains business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. Business plans guide owners, management and investors during the start off stage of the business, and it equally guides the business as it grows from one stage to the other.

Savvy business owners write a business plan to guide management and to promote investment capital. Businesses without a solid plan typically burn out fast or fail to turn a profit in the long run. Without a well-planned business strategy, it is not possible for a business to scale through problems smoothly, and it would equally be an uphill task to achieve success.

A foolproof business plan highlights varying aspects of a potential business and integrates few essential features like business objectives, possible growth rate and many other characteristics that your business will include and assimilate. How to promote investment capital will be illustrated broadly in a business plan.

There are various kinds of business plans and in this article we will outline the various business plans and tell you the function of each.

• Start-Up Business Plans

One of the very popular business plans in the world of business is the startup business plan. The startup business plans contain an exhaustive approach for starting and growing a business. It is different from all other business plans because of its nature and the details that are taken into consideration right from the inception of the business till the growth stage along with the vision of at least five years.

With this business plan, new businesses need to detail the steps they need to take while starting a business. This document typically includes sections describing the company, the product or service the business will supply, market evaluations and the intended projected management team.

Potential investors will also require a financial analysis with spreadsheets describing financial areas including, but not limited to, income, profit and cash flow projections. Startup business plans can equally be used by established companies to launch a new product line or to enter an entirely new business segment in the market . Conglomerates use this plan if they are launching a new business.

• It xrays the Business:  The startup business plan explains what a business is all about by describing the products or services in detail and what the ultimate goals of the business are. For example, your plan may stipulate what your revenue goals are for each of your first three years of operation. Your plan should also indicate why you believe there is a need for your business and who your main competitors will be.
• Helps in securing funding: It’s no secret that businesses can’t function without any operating capital to kick-start their production cycle. Entrepreneurs are often required to take loans from financial institutions to purchase property, get the equipment or hire manpower. Startup business plans would help them access funding speedily.
• Outlines Possible Weaknesses:   Startup business plans helps businesses to find out the weaknesses of the business in question. Highs and lows are a part of life and without them; we wouldn’t feel the need for improvement. A startup business plan helps you preempt the lows and maximize the highs.
• It provides an execution plan: Describing how your business will function and perform in the market is important when dealing with sponsors and investors. A startup business plan will explain your products and services, your targeted customers, the required funds and what’s necessary for your startup to thrive
• Internal Business Plans

As the name suggests the internal business plan is for internal stakeholders of the business. This type of business plan helps to evaluate projects which are specific and they keep the team up to speed about the current status of the company.

The company has more chances of success if everyone in the team is entirely on board, that is why the internal business plan is needed to keep everyone in the company on the same lane. It contains strategies and ways to improve the current business working and suggests a new pattern for growth.

• It answers questions pertaining to the internal workings of the company: Is the company growing or declining? Does the working pattern need change, improvement or modification? These are the type of questions which internal business plans answer. The primary purpose of the internal business plan is not to show the balance sheet of the financial position of the company to the external stakeholders but it is to run the business as smoothly as possible.
• It targets specific teams to streamline their functions: Internal business plans target a specific audience within the business, for example, the marketing team who need to evaluate a proposed project. This document will describe the company’s current state, including operational costs and profitability, then calculate if and how the business will repay any capital needed for the project. Internal plans provide information about project marketing, hiring and tech costs.
• Strategic Business Plans

A strategic business plan provides a high-level view of a company’s goals and how it will achieve them, laying out a foundational plan for the entire company. While the structure of a strategic plan differs from company to company, most include five elements: business vision, mission statement, definition of critical success factors, strategies for achieving objectives and an implementation schedule.

A strategic business plan brings all levels of the business into the big picture, inspiring employees to work together to create a successful culmination to the company’s goals. These types of plans typically skip the more detailed financial data and milestones because they are not important to the team at this point.

Strategic business plans also help to create internal efficiency so you can get the best results. The strategic business plan also comprises business vision, mission statement, strategies for achieving objectives, success factors and implementation schedules.

• They help in the execution of business strategies: Strategic business plans help to outline how the company will get to where it wants to go. They outline the strategy your team must carry out to achieve your goals, including your strengths, weaknesses and how you’re going to utilize your opportunities.
• To keep the company focused: The primary purpose of the strategic business plan is to carve the way to go ahead and answer the questions like What are you going to get and How do you intend to go about it. These answers are nothing but the strategy that the team must execute in order to achieve their targets.
• Feasibility Business Plans

A feasibility business plan answers two primary questions about a proposed business venture: who, if anyone, will purchase the service or product a company wants to sell, and if the venture can turn a profit. Feasibility business plans include, but are not limited to, sections describing the need for the product or service, target demographics and required capital. A feasibility plan ends with recommendations for going forward.

• Identify the target market of a business:  The feasibility business plan determines who will purchase the service or product of the company.
• To answer the ‘why’ question of a company: The feasibility business plan describes the need for a product or service including the target demographics and the financials required to start the business.
• Operations Business Plans

Operations plans are internal plans that consist of elements related to company operations. An operations plan, specifies implementation markers and deadlines for the coming year. The operations plan outlines employees’ responsibilities. Operational business plans are typically very small because they are cut down to a year’s worth of information.

• It projects the business on a yearly basis: The operations business plan isn’t made to tell investors how you intend on turning a profit in the span of five years. It’s simply where you expect to be in 365 days. An annual plan can also be an internal plan (i.e., the strategy your employees intend to enact over the next year).
• It is used to scout for investors: The operations business plan can also be used to attract investors at the very beginning. Annual business plans are perfect for companies that expect to make big changes in the not-so-distant future. Investors love to see this.
• Growth Business Plans

Growth plans or expansion plans are in-depth descriptions of proposed business growth and are written for internal or external purposes. If company’s growth requires investment, a growth plan may include complete descriptions of the company, its management and officers. The plan must provide all company details to satisfy potential investors.

If a growth plan needs no capital, the authors may forego obvious company descriptions, but will include financial sales and expense projections. If you’re looking for a hyper-focused business plan, this is it. Growth or expansion plans focus on a specific area within your business, like opening a new location or launching a certain product.

Growth business plans are internal and external facing. Internal growth plans are a lean version of a strategic business plan. You’ll use them if your company’s growth or expansion is being funded internally, such as if you’re launching a new product line from the last product line’s revenue. You already know what you’re funding, so you don’t need to deeply explain the product.

For an external or investor-facing growth plan, you’re going to need some different information. This type of plan assumes that the bank, investor or individual you’re pitching doesn’t know much about your business at all. You’ll need to look at it like you’re a startup and include additional details about your growth or expansion.

• Helps a company attract investors:  Growth plans are aimed at investors and banks so as to attract external investment. This plan usually include everything in a standard business plan. You need the financial data and projections, the market research and the funding request.
• It helps to analyse the business on a yearly basis: Growth plans are also termed as Annual Business plan and as the name suggests, the plan is for annual purposes. These types of business plans are more important to startups. This is because you only need a years’ worth of information to write it.
• It helps during the time of big changes in company: Growth plans are very helpful to companies that are trying to make monumental changes in a short time.
• The Lean Plan

Businesses use the Lean business plan to manage strategy, tactics, dates, milestones, activities, and cash flow. The Lean Plan is faster, easier, and more efficient than a formal business plan because it doesn’t include summaries, descriptions, and background details that you and your partners or employees already know. A Lean Plan includes specific deadlines and milestones, and the budgets allotted for meeting them.

• It is used to track milestones:  The lean business plan is most useful if you’re trying to grow your business and want to use it as a tool to track your financials and milestones against what you projected so you can respond to opportunity and react to challenges quickly.
• The standard business plan

You’ll need to put together a stand business plan if you have a business plan event, which is what it is called when a business needs to present a business plan to a bank, prospective investor, vendor, ally, partner, or employee.

The most standard business plan starts with an executive summary and includes sections or chapters covering the company, the product or service it sells, the target market, strategy and implementation milestones and goals, management team, and financial forecasting, and analysis. The exact order of topics is not important, but most people expect to see all of these topics covered as part of the standard plan.

Think of your Lean Plan as a good first draft of a standard plan. Those complete projections include the three essential financial projections (also called pro-forma statements): profit and loss, balance sheet, and cash flow. Every standard business plan needs sales plus these three essentials.

• To analyze cash flow:  The cash flow is an essential part of a standard business plan. Businesses need cash to stay open. Even if a business can survive temporarily without profits, it still needs the cash to pay its bills. And since profits alone don’t guarantee cash in the bank, projected cash flow is essential.

Many standard plans also include a table for personnel spending. Some standard plans will need additional projections to meet the needs of the specific business plan event.

For example, plans for seeking outside investment should include a discussion of an eventual exit for investors, and of course the planned use of the invested funds. Plans supporting a bank loan application might include projected ratios the bank wants to see, such as debt to equity, quick, or current ratios.

• One-page business plan

A one-page business plan is typically a one-page summary of the business, and it includes highlights only. This business plan is used to offer a very quick overview of a business.

• To provide a quick business summary: The one-page business plan summarizes the target market , business offering, main milestones, and essential sales forecast of a business in a single page. Such a summary can be useful as a summary for banks, potential investors, vendors, allies, and employees. A one-page business plan can also be called a business pitch.
• The Miniplan

The miniplan is a sort of abridged version of the normal business plan. This business plan is preferred by many recipients because they can read it, or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights while telling the same story.

• It provides a quick overview of the business for investors:  The miniplan provides a quick summary of the business or company for someone who may not have the time to go through the longer version.
• The Presentation Plan

The advent of PowerPoint presentations changed the way many, if not most, plans are presented. And while the plan is shorter than its predecessors, it’s not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of their business. But presenting your plan as a deck can be very powerful.

Readers of a plan can’t always capture your passion for the business nor can they ask questions when you finish. But in 20 minutes, you can cover all the key points and tell your story from concept and mission statement through financial forecasts.

• It helps to present the company in a detailed format to an audience: The presentation plan helps to present the company in a concise to a listening audience. In 20 minutes, you can cover all the key points and tell the story of your organisation from concept and mission statement through to financial forecasts.
• The Working Plan

A working plan is a tool to be used to operate your business. It is usually long on detail but may be short on presentation. As with a miniplan, you can probably use a somewhat higher degree of informality when preparing a working plan. It is there to work for your company and provide the required guide.

The plan is usually intended strictly for internal use, and so you can omit some elements that you need not explain to yourself and your team. Likewise, you probably don’t need to include an appendix with resumes of key executives. Nor would a working plan especially benefit from product photos.

• It provides guidelines for the day to day running of the business: The working plan is like an old pair of slacks you wear to the office on Saturdays. It’s there to be used, not admired. It provides pointers on how things are to be done in the company.
• The What-If Plan

When you face unusual circumstances, you need something a bit different from your usual working plan. For example, you might want to prepare a contingency plan when you’re seeking bank financing.

A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training and reduce duplicative efforts?

Such what-if planning doesn’t have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel and other variables so you can make good decisions.

• It helps in analyzing various business scenarios, good or bad: If a company wants to make sudden changes, a what-if business plan is used to analyse the changes properly so the company knows what it is getting itself into.
• They provide insight: This business plan provides insight into the decisions companies makes at every point in their existence. What sets these kinds of plans apart from the working and presentation plans is that they aren’t necessarily describing how you’ll run the business. They’re essentially more like an addendum to your actual business plan.
• It helps the company make good decisions: A “what if” plan helps a company consider major changes that affect the core of the business, so they can make good decisions. It’s the plan you should consider before you consider any expansion or growth plan.

14. Development Business Plan

Development plans or extension plans are top to bottom depictions of proposed business development and they are composed to display inward or outside purposes of a business. A development policy incorporates overall details of the organization, its administration and responsibility the personnel share among themselves.

The policy must show the organization detail and emphasize the elements required to fulfill potential speculators. If in case the development plan requires no capital, the plan composers may pass by those organization portrayals, but will surely incorporate money related deals and cost projections.

• It is used in detailed industry analysis: A development policy incorporates overall details of the organization, its administration and responsibility the personnel share among themselves.

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What Is a Business Model?

Understanding business models, evaluating successful business models, how to create a business model.

• Business Model FAQs

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Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

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The term business model refers to a company's plan for making a profit . It identifies the products or services the business plans to sell, its identified target market , and any anticipated expenses . Business models are important for both new and established businesses. They help companies attract investment, recruit talent, and motivate management and staff.

Businesses should regularly update their business model or they'll fail to anticipate trends and challenges ahead. Business models also help investors to evaluate companies that interest them and employees to understand the future of a company they may aspire to join.

Key Takeaways

• A business model is a company's core strategy for profitably doing business.
• Models generally include information like products or services the business plans to sell, target markets, and any anticipated expenses.
• The two levers of a business model are pricing and costs.
• A business model should be periodically revised to make sure it still reflects the business environment and customer demands.
• Analysts and investors often look at a company's gross profit to evaluate the success of a business model.

Investopedia / Laura Porter

A business model is a high-level plan for profitably operating a business in a specific marketplace. This plan helps the company to identify the best way to go about doing its business while also serving to attract investors and talent.

A primary component of the business model is the value proposition . This is a description of the goods or services that a company offers and why they are desirable to customers or clients; it should ideally be stated in a way that differentiates the product or service from its competitors.

A new enterprise's business model should also cover projected startup costs and financing sources, the target customer base for the business, marketing strategy , a review of the competition, and projections of revenues and expenses. The plan may also define opportunities in which the business can partner with other established companies. For example, the business model for an advertising business may identify benefits from an arrangement for referrals to and from a printing company.

Successful businesses have business models that allow them to fulfill client needs at a competitive price and a sustainable cost. And they are subject to change. Many businesses revise their business models periodically to reflect changing business environments and market demand .

Investors and Business Models

When evaluating a company as a possible investment, the investor should find out exactly how it makes its money. This means looking through the company's business model. Fortunately, it's not hard to find. Most companies outline their business model on their website and in their annual reports .

Admittedly, the business model may not tell you everything about a company's prospects. Investors need to fill in the blanks, look beyond the sales pitch, and recognize that sensitive information or any flouting of rules of ethics to gain an advantage won't be mentioned. The investor who understands the business model, even on a basic level, can make better sense of the financial data.

A common mistake many companies make when they create their business models is to underestimate the costs of funding the business until it becomes profitable. Counting costs up to the introduction of a product is not enough. A company has to keep the business running until its revenues exceed its expenses.

One way analysts and investors evaluate the success of a business model is by looking at the company's gross profit . Gross profit is a company's total revenue minus the cost of goods sold (COGS) . Comparing a company's gross profit to that of its main competitor or its industry sheds light on the efficiency and effectiveness of its business model. Gross profit alone can be misleading, however. Analysts also want to see cash flow or net income —that is, gross profit minus operating expenses, which is an indication of just how much real profit the business is generating.

The two primary levers of a company's business model are pricing and costs. A company can raise prices, and it can find inventory at reduced costs. Both actions increase gross profit.

Many analysts consider gross profit to be more important in evaluating a business plan. A good gross profit suggests a sound business plan. In that case, if expenses are out of control, the management team could be at fault, and the problems are correctable. As this suggests, many analysts believe that companies that run on the best business models can run themselves.

When evaluating a company as a possible investment, find out exactly how it makes its money—not just what it sells but how it sells it. That's the company's business model.

Types of Business Models

There isn't one type of business model. Not all companies are the same and each has different ways of making money. Business models can vary considerably. An aerospace company such as Boeing, for example, may operate similarly to a peer such as Airbus but won't share much in common in terms of how it makes money with, say, a shoe store or bar.

Direct sales, franchising , advertising-based, and brick-and-mortar stores are all examples of traditional business models. There are hybrid models as well, such as businesses that combine internet retail with brick-and-mortar stores or with sporting organizations like the NBA .

Below are some common types of business models; note that the examples given may fall into multiple categories.

One of the more common business models most people interact with regularly is the retailer model. A retailer is the last entity along a supply chain. They often buy finished goods from manufacturers or distributors and interface directly with customers.

Example: Costco Wholesale

Manufacturer

A manufacturer is responsible for sourcing raw materials and producing finished products by leveraging internal labor, machinery, and equipment. A manufacturer may make custom goods or highly replicated, mass-produced products and can sell what it makes to distributors, retailers, or directly to customers.

Example: Ford Motor Company

Fee-for-Service

Instead of selling products, fee-for-service business models are centered around labor and providing services. A fee-for-service business model may charge an hourly rate or a fixed cost for a specific agreement. Fee-for-service companies are often specialized, offering insight that may not be common knowledge or may require specific training.

Example: DLA Piper LLP

Subscription

Subscription-based business models strive to attract clients in the hopes of luring them into long-time, loyal patrons. This is done by offering a product that requires ongoing payment, usually in return for a fixed duration of benefit. Though largely offered by digital companies for access to software, subscription business models are also popular for physical goods such as monthly reoccurring agriculture/produce subscription box deliveries.

Example: Spotify

Freemium business models attract customers by introducing them to basic, limited-scope products. Then, with the client using their service, the company attempts to convert them to a more premium, advance product that requires payment. Although a customer may theoretically stay on freemium forever, a company tries to show the benefit of becoming an upgraded member.

Example: LinkedIn/LinkedIn Premium

Some companies can reside within multiple business model types at the same time for the same product. For example, Spotify (a subscription-based model) also offers a free version and a premium version.

If a company is concerned about the cost of attracting a single customer, it may attempt to bundle products to sell multiple goods to a single client. Bundling capitalizes on existing customers by attempting to sell them different products. This can be incentivized by offering pricing discounts for buying multiple products.

Example: AT&T

Marketplace

Marketplaces receive compensation for hosting a platform for business to be conducted. Although transactions could occur without a marketplace, this business model attempts to make transacting easier, safer, and faster.

Example: eBay

Affiliate business models are based on marketing and the broad reach of a specific entity or person's platform. Companies pay an entity to promote a good, and that entity often receives compensation in exchange for their promotion. That compensation may be a fixed payment, a percentage of sales derived from their promotion, or both.

Example: social media influencers such as Lele Pons, Zach King, or Chiara Ferragni

Razor Blade

Aptly named after the product that invented the model, this business model aims to sell a durable product below cost to then generate high-margin sales of a disposable component needed to use that product. Also referred to as the " razor and blade model ", razor blade companies may give away expensive blade handles with the premise that consumers need to continually buy razor blades in the long run.

Example: HP (printers and ink)

"Tying" is an illegal razor blade model strategy that requires the purchase of an unrelated good prior to being able to buy a different (and often required) good. For example, imagine Gillette released a line of lotion and required all customers to buy three bottles before they were allowed to purchase disposable razor blades.

Reverse Razor Blade

Instead of relying on high-margin companion products, a reverse razor blade business model tries to sell a high-margin product upfront. Then, to use the product, low or free companion products are provided. This model aims to promote that upfront sale, as further use of the product is not highly profitable.

Example: Apple (iPhones + applications)

The franchise business model leverages existing business plans to expand and reproduce a company at a different location. Often food, hardware, or fitness companies, franchisers work with incoming franchisees to finance the business, promote the new location, and oversee operations. In return, the franchisor receives a percentage of earnings from the franchisee.

Example: Domino's Pizza

Pay-As-You-Go

Instead of charging a fixed fee, some companies may implement a pay-as-you-go business model where the amount charged depends on how much of the product or service was used. The company may charge a fixed fee for offering the service in addition to an amount that changes each month based on what was consumed.

Example: Utility companies

A brokerage business model connects buyers and sellers without directly selling a good themselves. Brokerage companies often receive a percentage of the amount paid when a deal is finalized. Most common in real estate, brokers are also prominent in construction/development and freight.

Example: Re/Max

There is no "one size fits all" when making a business model. Different professionals may suggest taking different steps when creating a business and planning your business model. Here are some broad steps someone can take to create a plan:

• Identify your audience : Most business model plans will start with either defining the problem or identifying your audience and target market . A strong business model will reflect who you are trying to target so you can craft your product, messaging, and approach to connecting with that audience.
• Define the problem : In addition to understanding your audience, you must know what problem you are trying to solve. A hardware company sells products for home repairs. A restaurant feeds the community. Without a problem or a need that creates demand for your services or products, your business may struggle to find its footing.
• Understand your offerings : With your audience and problem in mind, consider what you are able to offer. What products are you interested in selling, and how does your expertise match that product? In this stage of the business model, the product is tweaked to adapt to what the market needs and what you're able to provide.
• Document your needs : With your product selected, consider the hurdles your company will face. This includes product-specific challenges as well as operational difficulties. Make sure to document each of these needs to assess whether you are ready to launch in the future.
• Find key partners : Most businesses will leverage other partners in driving company success. For example, a wedding planner may forge relationships with venues, caterers, florists, and tailors to enhance their offering. For manufacturers, consider who will provide your materials and how critical your relationship with that provider will be.
• Set monetization solutions : A business model isn't complete until it identifies how the company will make money and turn a profit. This includes selecting the strategy or strategies laid out in the business model types section above.
• Test your model : When your full plan is in place, perform test surveys or soft launches. Ask how people would feel paying your prices for your services. Offer discounts to new customers in exchange for reviews and feedback. You can always adjust your business model, but you should always consider leveraging direct feedback from the market when doing so.

Instead of reinventing the wheel, consider what competing companies are doing and how you can position yourself in the market. You may be able to easily spot gaps in the business model of others.

Criticism of Business Models

Joan Magretta, the former editor of the Harvard Business Review , suggests there are two critical factors in sizing up business models. When business models don't work, she states, it's because the story doesn't make sense and/or the numbers just don't add up to profits.

Complicated business models can put off investors and hinder a company's growth. People are less eager to invest in a company they don't understand. Moreover, some business models can be less profitable and at risk of being compromised. What works one year, isn't guaranteed to continue doing so in the future.

Take the airline industry. For years, major carriers such as American Airlines, Delta, and Continental built their businesses around a hub-and-spoke structure , in which all flights were routed through a handful of major airports. By ensuring that most seats were filled most of the time, the business model produced big profits.

However, a competing business model arose that made the strength of the major carriers a burden. Carriers like Southwest and JetBlue shuttled planes between smaller airports at a lower cost. They avoided some of the operational inefficiencies of the hub-and-spoke model while forcing labor costs down. That allowed them to cut prices, increasing demand for short flights between cities.

As these newer competitors drew more customers away, the old carriers were left to support their large, extended networks with fewer passengers. The problem became even worse when traffic fell sharply following the September 11 terrorist attacks in 2001 . To fill seats, these airlines had to offer more discounts at even deeper levels. The hub-and-spoke business model no longer made sense.

Example of Business Models

Consider the vast portfolio of Microsoft. Over the past several decades, the company has expanded its product line across digital services, software, gaming, and more. Various business models, all within Microsoft, include but are not limited to:

• Productivity and business processes : Microsoft offers subscriptions to Office products and LinkedIn. These subscriptions may be based on product usage (i.e. the amount of data being uploaded to SharePoint).
• Intelligent cloud : Microsoft offers server products and cloud services for a subscription.
• Personal computing : Microsoft sells the Windows operating system as well as physically manufactured products such as Surface, PC components, and Xbox hardware. Residual Xbox sales include content, services, subscriptions, royalties, and advertising revenue.

A business model is a strategic plan of how a company will make money. The model describes the way a business will take its product, offer it to the market, and drive sales. A business model determines what products make sense for a company to sell, how it wants to promote its products, what type of people it should try to cater to, and what revenue streams it may expect.

What Is an Example of a Business Model?

Best Buy, Target, and Walmart are some of the largest examples of retail companies. These companies acquire goods from manufacturers or distributors to sell directly to the public. Retailers interface with their clients and sell goods, though retailers may or may not make the actual goods they sell.

What Are the Main Types of Business Models?

There are various types of business models. Examples include subscription models, bundling, and franchising. Business models can sometimes also be loosely defined by industry. For example, manufacturers produce their own goods and may or may not sell them directly to the public, whereas retailers buy goods to later resell to the public.

How Do I Build a Business Model?

There are many steps to building a business model, and there is no single consistent process among business experts. In general, a business model should identify your customers, understand the problem you are trying to solve, select a business model type to determine how your clients will buy your product, and determine the ways your company will make money. It is also important to periodically review your business model; once you've launched, evaluate your plan and adjust your target audience, product line, or pricing as needed.

A company isn't just an entity that sells goods. It's an ecosystem that must have a plan on who to sell to, what to sell, what to charge, and what value it is creating. A business model describes what an organization does to make a profit. After building a business model, a company should have a stronger direction on how it wants to operate and what its financial future appears to be.

U.S. Federal Trade Commission. " Tying the Sale of Two Products ."

Harvard Business Review. " Why Business Models Matter ."

Bureau of Transportation Statistics. " Airline Travel Since 9/11 ."

Microsoft. " Segment Information ."

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• Write Your Business Plan | Part 1 Overview Video
• The Basics of Writing a Business Plan
• How to Use Your Business Plan Most Effectively
• 12 Reasons You Need a Business Plan
• The Main Objectives of a Business Plan
• What to Include and Not Include in a Successful Business Plan
• The Top 4 Types of Business Plans
• A Step-by-Step Guide to Presenting Your Business Plan in 10 Slides
• 6 Tips for Making a Winning Business Presentation
• 3 Key Things You Need to Know About Financing Your Business
• 12 Ways to Set Realistic Business Goals and Objectives
• How to Perfectly Pitch Your Business Plan in 10 Minutes
• Write Your Business Plan | Part 2 Overview Video
• How to Fund Your Business Through Friends and Family Loans and Crowdsourcing
• How to Fund Your Business Using Banks and Credit Unions
• How to Fund Your Business With an SBA Loan
• How to Fund Your Business With Bonds and Indirect Funding Sources
• How to Fund Your Business With Venture Capital
• How to Fund Your Business With Angel Investors
• How to Use Your Business Plan to Track Performance
• How to Make Your Business Plan Attractive to Prospective Partners
• Is This Idea Going to Work? How to Assess the Potential of Your Business.
• When to Update Your Business Plan
• Write Your Business Plan | Part 3 Overview Video
• How to Write the Management Team Section to Your Business Plan
• How to Create a Strategic Hiring Plan
• How to Write a Business Plan Executive Summary That Sells Your Idea
• How to Build a Team of Outside Experts for Your Business
• Use This Worksheet to Write a Product Description That Sells
• What Is Your Unique Selling Proposition? Use This Worksheet to Find Your Greatest Strength.
• How to Raise Money With Your Business Plan
• Customers and Investors Don't Want Products. They Want Solutions.
• Write Your Business Plan | Part 4 Overview Video
• 5 Essential Elements of Your Industry Trends Plan
• How to Identify and Research Your Competition
• Who Is Your Ideal Customer? 4 Questions to Ask Yourself.
• How to Identify Market Trends in Your Business Plan
• How to Define Your Product and Set Your Prices
• How to Determine the Barriers to Entry for Your Business
• How to Get Customers in Your Store and Drive Traffic to Your Website
• How to Effectively Promote Your Business to Customers and Investors
• Write Your Business Plan | Part 5 Overview Video
• What Equipment and Facilities to Include in Your Business Plan
• How to Write an Income Statement for Your Business Plan
• How to Make a Balance Sheet
• How to Make a Cash Flow Statement
• How to Use Financial Ratios to Understand the Health of Your Business
• How to Write an Operations Plan for Retail and Sales Businesses
• How to Make Realistic Financial Forecasts
• How to Write an Operations Plan for Manufacturers
• What Technology Needs to Include In Your Business Plan
• How to List Personnel and Materials in Your Business Plan
• The Role of Franchising
• The Best Ways to Follow Up on a Buisiness Plan
• The Best Books, Sites, Trade Associations and Resources to Get Your Business Funded and Running
• How to Hire the Right Business Plan Consultant
• Business Plan Lingo and Resources All Entrepreneurs Should Know
• How to Write a Letter of Introduction
• What To Put on the Cover Page of a Business Plan
• How to Format Your Business Plan
• 6 Steps to Getting Your Business Plan In Front of Investors

The Top 4 Types of Business Plans Not all business plans looks the same. Here's how to customize your plan to your specific goals.

By Eric Butow Oct 27, 2023

Opinions expressed by Entrepreneur contributors are their own.

This is part 7 / 12 of Write Your Business Plan: Section 1: The Foundation of a Business Plan series.

When it comes to writing a business plan, one style does not fit all.

Different industries require different plans. A retailer isn't much like a manufacturer, and a professional services firm isn't much like a fast-food restaurant. Each requires certain critical components for success—components that may be irrelevant or even completely absent in the operations of another type of firm.

For example, inventory is a key concern for both retailers and manufacturers. Look at Walmart, one of the great all-time success stories in retail. Expert, innovative management of inventory is an integral part of its success. Any business plan that purported to describe the important elements of these businesses would have had to devote considerable space to telling how the managers planned to manage inventory.

Related: The Basics Of Writing A Business Plan

Contrast that with a professional services firm, such as a management consultant. A consultant has no inventory whatsoever. Their offerings consist entirely of the management analysis and advice they can provide. They don't have to pay now for goods to be sold later or lay out cash to store products for eventual sale. The management consultant's business plan, therefore, wouldn't have a section on inventory or its management, control, and reduction.

This is one obvious example of the differences among plans for different industries. Sometimes, even companies in more closely related industries have significantly different business plans. For instance, the business plan for a fine French restaurant might need a section detailing how the management intends to attract and retain a distinguished chef. At a restaurant catering to the downtown lunchtime crowd, you might devote much plan space to the critical concern of location and quick turnaround of diners with very little about the chef.

Related: The Benefits and Risks of Writing A Business Plan

You want your plan to present yourself and your business in the best, most accurate light. That's true no matter what you intend to use your plan for, whether it's destined for presentation at a venture capital conference or will never leave your office or be seen outside internal strategy sessions.

When you select clothing for a momentous occasion, odds are you try to pick items that will play up your best features. Think about your plan the same way. You want to reveal any positives your business may have and ensure they receive due consideration.

Related: The Main Objective Of A Business Plan

Business plans can be divided roughly into four distinct types: Mini-plans, presentation plans or decks, working plans, and what-if plans. Each plan requires different amounts of labor, not always with proportionately different results. A more elaborate plan is not guaranteed to be superior to an abbreviated one. Success depends on various factors and whether the right plan is used in the right setting. For example, a new hire may not want to read the same elaborate version that might be important to a potential investor.

The Mini-Plan

The mini-plan is preferred by many recipients because they can read it or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights while telling the same story. For a small business venture, it's typically all that you need. For a more complex business, you may need a longer version.

Related: How To Write A Business Plan

The Presentation Plan

Created with PowerPoint or a similar platform, this is how most plans are presented. And while today's plan is shorter than back in the day, it's not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of your business. However, presenting your plan as a deck can be very powerful. Readers of a plan can't always capture your passion for the business, nor can they ask questions when you finish. In 20 minutes, you can cover all the key points and tell your story from concept and mission statement through financial forecasts.

Related: How To Craft A Business Plan That Will Turn Investor Heads

Remember to keep your graphics uncluttered and to make comments to accentuate your ideas rather than simply reading what is in front of your audience. While a presentation plan is concise, don't be fooled. It takes plenty of planning. The pertinent questions—Who? What? Where? Why? When? and How?—need to be answered.

The Working Plan

A working plan is a tool to be used to operate your business. It is long on detail but cshort on presentation. As with a mini-plan, you probably can afford a somewhat higher degree of candor and informality when preparing a working plan.

Related: 6 Tips For Making A Winning Business Presentation

In a presentation plan, you might describe a rival as "competing primarily on a price basis." But in a working plan, your comment about the same competitor might be, "When is Jones ever going to stop this insane price-cutting?"

A plan intended strictly for internal use may also omit some elements that you need not explain to yourself. Likewise, you probably don't need to include an appendix with resumes of key executives. Product photos are also unnecessary. Internal policy considerations may guide the decision about including or excluding certain information in a working plan. Many entrepreneurs are sensitive about employees knowing the precise salary the owner takes home from the business.

Related: 12 Reasons You Need A Business Plan

To the extent such information can be left out of a working plan without compromising its utility, you can feel free to protect your privacy. This document is like an old pair of khakis you wear to the office on Saturdays or that one ancient delivery truck that never seems to break down. It's there to be used, not admired.

The What-If Plan

When you face unusual circumstances, you need a variant on the working plan. For example, prepare a contingency plan when you are seeking bank financing. A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Related: How To Hire The Right Business Plan Consultant

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training, and reduce duplicative efforts? Such what-if planning doesn't have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel, and other variables so you can make good decisions.

What sets these kinds of plans apart from the working and presentation plans is that they don't necessarily describe how you will run the business. They are essentially more like an addendum to your actual business plan. If you decide to acquire that competitor or grow dramatically, you will want to incorporate some of the thinking already invested in these special purpose plans into your primary business plan.

Related: Do You Need To Write A Formal Business Plan

If you are looking for extra guidance with an industry-specific business plan, you can visit Bplans.com to access over 500 free real-world business plan examples from a wide variety of industries to guide you through writing your own plan. If you're looking for an intuitive tool that walks you through the plan writing process, you can try LivePlan . It includes many of these SBA-approved business plan examples and is especially useful when applying for a bank loan or outside investment.

More in Write Your Business Plan

Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.

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17.3 Types of Plans

• Identify different types of plans and control systems employed by organizations.

From an activity perspective, organizations are relatively complex systems, as they are involved in numerous activities. Many of these activities require management’s attention from both a planning and controlling perspective. Managers therefore create different types of plans to guide operations and to monitor and control organizational activities. In this section, we introduce several commonly used plans. The major categories are hierarchical, frequency-of-use (repetitiveness), time-frame, organizational scope, and contingency. Table 17.1 provides a closer look at many types of plans that fall in each of these categories.

Hierarchical Plans

Organizations can be viewed as a three-layer cake, with its three levels of organizational needs. Each of the three levels—institutional, administrative, and technical core—is associated with a particular type of plan. As revealed in Table 17.1 , the three types of hierarchical plans are strategic, administrative, and operating (technical core). The three hierarchical plans are interdependent, as they support the fulfillment of the three organizational needs. In the organization’s hierarchy, the technical core plans day-to-day operations.

Strategic Plans

Strategic management is that part of the management process concerned with the overall integration of an organization’s internal divisions while simultaneously integrating the organization with its external environment. Strategic management formulates and implements tactics that try to match an organization as closely as possible to its task environment for the purpose of meeting its objectives.

Strategic plans address the organization’s institutional-level needs. Strategic plans outline a long-term vision for the organization. They specify the organization’s reason for being, its strategic objectives, and its operational strategies—the action statements that specify how the organization’s strategic goals are to be achieved.

Part of strategic planning involves creating the organization’s mission, a statement that specifies an organization’s reason for being and answers the question “What business(es) should we undertake?” The mission and the strategic plan are major guiding documents for activities that the organization pursues. Strategic plans have several defining characteristics: They are long-term and position an organization within its task environment; they are pervasive and cover many organizational activities; they integrate, guide, and control activities for the immediate and the long term; and they establish boundaries for managerial decision-making.

Operating plans provide direction and action statements for activities in the organization’s technical core. Administrative plans work to integrate institutional-level plans with the operating plans and tie together all of the plans created for the organization’s technical core.

Frequency-of-Use Plans

Another category of plans is frequency-of-use plans. Some plans are used repeatedly; others are used for a single purpose. Standing plans , such as rules, policies, and procedures, are designed to cover issues that managers face repeatedly. For example, managers may be concerned about tardiness, a problem that may occur often in the entire work force. These managers might decide to develop a standing policy to be implemented automatically each time an employee is late for work. The procedure invoked under such a standing plan is called a standard operating procedure (SOP).

Single-use plans are developed for unique situations or problems and are usually replaced after one use. Managers generally use three types of single-use plans: programs, projects, and budgets. See Table 17.1 for a brief description of standing and single-use plans.

Time-Frame Plans

The organization’s need to address the future is captured by its time-frame plans. This need to address the future through planning is reflected in short-, medium-, and long-range plans. Given the uniqueness of industries and the different time orientations of societies—study Hofstede’s differentiation of cultures around the world in terms of their orientation toward the future—the times captured by short, medium, and long range vary tremendously across organizations of the world. Konosuke Matsushita’s 250-year plan, which he developed for the company that bears his name, is not exactly typical of the long-range plans of U.S. companies!

Short-, medium-, and long-range plans differ in more ways than the time they cover. Typically, the further a plan projects into the future, the more uncertainty planners encounter. As a consequence, long-range plans are usually less specific than shorter-range plans. Also, long-range plans are usually less formal, less detailed, and more flexible than short-range plans in order to accommodate such uncertainty. Long-range plans also tend to be more directional in nature.

Organizational Scope Plans

Plans vary in scope. Some plans focus on an entire organization. For example, the president of the University of Minnesota advanced a plan to make the university one of the top five educational institutions in the United States. This strategic plan focuses on the entire institution. Other plans are narrower in scope and concentrate on a subset of organizational activities or operating units, such as the food services unit of the university. For further insight into organizational scope plans, see Table 17.1 .

Contingency Plans

Organizations often engage in contingency planning (also referred to as scenario or “what if” planning). You will recall that the planning process is based on certain premises about what is likely to happen in an organization’s environment. Contingency plans are created to deal with what might happen if these assumptions turn out to be wrong. Contingency planning is thus the development of alternative courses of action to be implemented if events disrupt a planned course of action. A contingency plan allows management to act immediately if an unplanned occurrence, such as a strike, boycott, natural disaster, or major economic shift, renders existing plans inoperable or inappropriate. For example, airlines develop contingency plans to deal with terrorism and air tragedies. Most contingency plans are never implemented, but when needed, they are of crucial importance.

Concept Check

• Define and describe the different types of plans defined in Table 17.1 and how organizations use them.

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• Authors: David S. Bright, Anastasia H. Cortes
• Publisher/website: OpenStax
• Book title: Principles of Management
• Publication date: Mar 20, 2019
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-management/pages/1-introduction
• Section URL: https://openstax.org/books/principles-management/pages/17-3-types-of-plans

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