how much do business plans cost

How Much Does a Business Plan Cost?

A complete business plan helps you to identify your business goals and how you plan on reaching them. Whether you are a new business owner or an experienced entrepreneur, writing a comprehensive business plan can help you start, grow, and/or attract investors to fund your business.  

How Much Does It Cost to Write a Business Plan ?

Business plan pricing depends on what route you take to create it. However, there are a few essential elements that are common to all business plans:

• Executive Summary
• Business Description
• Market Analysis
• Customer Analysis
• Competitive Analysis
• Marketing Strategy
• Operations Plan
• Management Team
• Financial Plan

There are several ways to approach writing a successful business plan, but the cost of each way varies widely. The cost of a business plan can be a significant investment, but it’s an essential tool for any business. Below we provide some tips for what to consider and the costs for the various methods of completing your own business plan.  

Considerations When Writing Your Own Business Plans

There are several things to consider when writing your own plan. Depending on whether you’re in need of funding and how much, the costs for your business plan will be different.

Take into account:

• How long will your business plan be?
• How many hours does it take to complete the business plan?
• What kind of language is used in the business plan?
• Who will use the business plan?
• Who will fund your business?
• How much are you looking to raise or if you need funding at all?

According to our business consultants’ surveys of investor requirements, a 15- to 25-page business plan is the ideal length. Adding more pages may cause your time-constrained investor to skim portions of the plan, even if they are interested, which might result in important information being overlooked. However, fewer pages may lead potential investors to believe that the firm has not been thoroughly thought out or simply doesn’t have enough information for them to make an investment decision.  

Business Plan Template Costs

There are a variety of business plan templates online that you can purchase for a one-time fee. These templates range in price but usually start at around $100. Remember, a bargain business plan template may not include all the information that you need, so it’s important to understand what is included with the template you purchase.

Many of these templates also come with instructions to help you fill in the template and make changes as needed. However, if there is something you want to be changed on the template, it may take time and money to have it done.

Be sure to do your research and find the right template for your business. The wrong template could set you back even further and change the face of your business entirely. If you purchase a professional business plan template, make sure it’s from a reputable business plan company with business plan writing skills   in a variety of industries.

The business plan template should be easily editable and customized for your specific business needs and industry trends.

If you do not want to pay for a template, there are companies that will charge by the page and some that offer free resources . However, these templates may not have been professional business plans written for your exact type of business.  

Experienced Consultants & Business Plan Writers Cost

Hiring a business plan writer or professional writing service will help you get a comprehensive business plan written just for your business. A professional business plan consultant will help you identify your goals and how your company will reach these goals. A business plan consultant fee usually costs more but can be worth it if you do not have the time or resources to complete the business plan yourself.

A business plan writer can be found through online directories, but be sure to do your research prior to engaging in business with them. Be sure to ask for references and read reviews before hiring a business plan writing service.

If you choose to hire a business plan consultant, the complexity and length of the plan will determine how much is a business plan. Generally, a consulting firm or private consultants charge between $1,000 and $5,000 to have a comprehensive business plan written . However, a lengthy and complex plan can easily start at a few thousand dollars and stretch into the tens of thousands of dollars based on the needs of the business.

Some experienced business plan writing services also offer package deals that include additional services, such as market research, a marketing plan, and realistic financial projections.

Business Plan Software Costs

There are business plan software applications that can be used for free or have a monthly subscription cost, which may work better for your needs depending on what you need in a business plan. These apps provide templates and make writing a business plan and business planning easier. They help organize the information you enter into the app and will sometimes offer advice on how to do things like financial projections for your business plan .

The information that you put into the application can be used for several different types of business plan needs. These apps are great for startups and small businesses looking to raise capital or secure funding.

Each app or software varies in what it offers. Some are more customizable than others, some have more options for presenting your business plan, and some even offer investment opportunities. With just your business idea, the business planning software can help you write your own business plan quickly and easily. 

Write Your Own Business Plan from Scratch

If you do not want to purchase a template or use software, the easiest and most cost-effective way is to write a business plan from scratch. This route takes time and effort to complete but can be done by anyone willing to put in the work.

When writing your business plan documents, remember that they should be as detailed as possible. This document is your guide to starting and running your business. The more complete it is, the better off you’ll be.

There are a variety of free resources available online to help you write a business plan, including articles, templates, and even video courses.

When writing a business plan from scratch, it’s important to consider all of your business aspects. This includes your business concept or business model , management, production, market research , sales strategies , customer service, operations, human resources, financial projections , and more.

Try to be as thorough as possible when writing the plan. While the task may seem daunting at first, you’ll find that putting together a business plan is not so bad once you get started. After all, if you can dream it, you can write it.

The cost of writing a b usiness plan is dependent on the purpose, type, and length of the business plan. The amount of time it takes to complete a  business plan , the language used, and who will be using the document also play a factor in the cost. You can find templates for a one-time fee or pay by the page, hire a business plan writing service or a business plan writer , contact a consulting firm , or use software/apps to create your business plan. Whichever option you choose, make sure you do your research, conduct an in-depth business plan review, and find the best resource to meet the goals for your business.  

• Business Planning
• Venture Funding

How Much Do Business Plan Writers Cost?

When you’re starting or growing a business, it’s important to have a clear plan in place. Writing a business plan can help you outline your goals and sales strategies, and it can be a valuable tool when seeking funding from potential investors such as venture capitalists or a bank loan. 

If you don’t have time to write your own business plan, or if you need help getting started, professional business plan writing services can be a great option. But, how much do these services cost? And is it worth the investment? Let’s take a closer look.

How Much Should I Pay For a Business Plan Writing Service?

Professional business plan writers and consultants generally charge between $2,000 and $25,000. However, the cost largely depends on the required quality of your plan, the complexity of your business plan, and the length of the document. Professional business plans for very small companies may only require a few thousand dollars to be written, while more complex business plans for larger, growing companies can easily cost over ten thousand dollars.

There are also private consultants who will write or edit your business plan on an hourly fee basis. Fees can range from $50 to $300 per hour or more, depending on the consultant and the complexity of your business plan.

Whoever you choose to get started with your business plan, be sure to consider what’s included in your service. At the very least, you should expect:

• Comprehensive business plan including an executive summary, market analysis, marketing plan, financial plan with 3-5 years of financial projections, and other essential components required by potential investors
• Customization based on your business model and specific to your business needs
• Well-researched business plan based on relevant industry information and a thorough competitive analysis

There are several companies out there that offer complete business plan writing services. However, the quality of their work can vary dramatically. If you’re considering hiring outside help to write your business plan, choose carefully.

It’s important to remember that you get what you pay for when it comes to these types of services. If you go with a cheap plan writer, you run the risk of ending up with a low-quality business plan. If your business plan isn’t strong and professional-looking, it may be harder for you to get funding or attract investors.

Looking for a Business Plan Writer?

You’ve come to the right place!  Since Growthink was founded in 1999, we have provided business plan writing services for thousands of clients including startups, small business owners, nonprofit organizations and mid to large-sized companies. 

We understand that writing a business plan can be a time-consuming process for many entrepreneurs.  Hiring a business plan writer will allow you to quickly and expertly create a custom business plan.

 Expert Team of Business Plan Writers

 Fully Customized Business Plans

 Market & Competitor Research

 Complete Financial Projections

 Strategic Consulting For Growth & Funding

Get Started Now!

Call us at (800) 216-3710 or complete the form below and one of our business plan writers will reach out to you to schedule a time to speak about your business plan needs.

You can learn more about our business plan consulting services here

What Factors Impact Business Plan Pricing?

Some things that impact business planning services pricing include:

• Length – Longer, more complex business plans will cost more than shorter business plans.
• Company Size – A business plan for a large or complicated company can be more expensive to write.
• Level of Expertise – Smaller companies may opt to hire less experienced writers who charge lower prices, while larger, well-established companies choose to work with high-quality professionals who charge higher rates. You can’t expect a less experienced writer to help you achieve your goals (funding, growth) for your business plan.
• Turnaround Time – Generally, shorter turnaround times mean increased prices. Typically it will take 3-4 weeks to write a quality business plan.
• Additional Services – Some companies offer additional services, such as business plan presentation and pitch deck editing and support. These can cost extra.

To really get your business off the ground, it’s important to have a business plan in place that has been written by someone with the expertise to put together a successful business plan. A professional business plan consultant is an excellent investment for increasing your chances of securing the funds you need to start and/or grow your business. However, it’s important to do your research and choose carefully when you’re ready to hire.

Who Can I Hire To Write My Business Plan?

When choosing a business plan writer or consulting firm, it’s important to look for a company with significant business experience and proven expertise in business plan development. Look for companies that have been around for at least five years and do business plan writing on a regular basis. They should also be able to provide references from other companies that they’ve worked with.

A Business Plan Writing Company or Consultant

When hiring a business plan writing service , you’ll have two primary options. You can opt to work with a single writer or a dedicated team of experts who will be responsible for the entire project. The price of the service may vary depending on which option you choose.

A business plan writer typically costs less than an entire team, but it’s important to keep in mind that you may have less control over the outcome. The upside is that your business plan will be written by an expert with a deep understanding of the writing process.

When choosing this route, you should ask for references and examples of previous work. Before hiring any business plan writer, be sure they have the proper credentials and experience to meet your needs. You should also ask about any fees associated with revisions or updates.

Many businesses choose to work with a business plan consulting firm that offers a collaborative team of experts. This type of company will give you the best of both worlds. You’ll be able to utilize the knowledge and expertise of all the experts involved in the project, while still retaining control over the direction and vision of your business plan.

If you’re trying to determine how much it will cost to work with a business plan writing service, take some time to explore all of your options before making a final decision. You should consider both pricing models as well as the qualifications offered by the various service providers in your area. Doing so will ensure you find the most qualified choice for your business planning needs.

You Can Write It Yourself

If you are a newer entrepreneur or business owner or you are trying to save money, there are several free resources available online to help you write your business plan. The Small Business Administration (SBA) and your local Chamber of Commerce offer business plan services, workshops, or courses that can help you get started. Using a business plan template is a great way to quickly and easily complete your plan, especially if you are unfamiliar with the business planning process.

Some business owners are comfortable writing business plans without any outside help. This option offers you complete control over the process, but it typically takes more time than you have to spare. For that reason, not writing your own plan is usually recommended for experienced business owners, even those with plenty of business plan writing experience.

In most cases, experienced business owners who write their own business plans will have a better idea of what elements are needed and how they should be presented. However, it can still take considerable time to compile all the necessary information into a cohesive business plan that meets your audience’s needs. And it’s one thing to write a business plan; it’s another to write a business plan that gets investors or lenders to write you a large funding check.

A Combination of Business Planning Services

If your budget doesn’t allow you to hire a comprehensive business plan service, combining outside services with writing your own business plan may be the best option. This approach gives you complete control over the process, while still allowing you to benefit from an expert business plan writer’s advice. It is also a great option for entrepreneurs who don’t have time to write their plan but aren’t quite ready to hire someone else to do it either.

Other business services that could help you include:

• Market Research – Conducting thorough market research can help you determine which business opportunities are viable. Experienced consultants can help you identify your target customer so you can design the right marketing strategy to reach them.
• Copywriting Assistance – Many entrepreneurs have a great product or idea, but lack the writing skills needed to effectively advertise it in their business plans or online marketing materials. A business plan copywriter can help you create a compelling marketing message that resonates with your target audience.
• Startup / Growth Opportunities – If you’re thinking about starting a business or expanding your established business, it’s important to consider all of the potential opportunities before diving into something that may not be feasible for your current situation. A business plan consultant can help you identify what makes your business idea unique and how you can capitalize on those opportunities.
• Business Plan Review – Once you’ve completed your business plan, it’s important to have it reviewed by an expert. They can identify any gaps or mistakes in logic that could affect how potential lenders or investors perceive your business idea.

As with any decision affecting your company’s future, you should take the time to explore all of your options before committing to a specific service provider. The goal is not only to find the best fit for your budget and needs but also to find a business plan consulting service that can meet your expectations and deliver quality content on time and within budget.

Is It Worth It To Use a Professional Business Plan Writing Service?

As with anything else, you’ll get what you pay for. If you are short on time or don’t have the writing skills required to write a business plan, it may be worth considering a professional writing service. These services can help you complete the necessary research and planning to get a comprehensive business plan written for your company.

How Growthink Can Help Your Business

Since 1999, Growthink has developed thousands of business plans for entrepreneurs and business owners to start and/or grow their businesses. From small business owners to Fortune 500 companies, we have provided a variety of business plan services to meet the needs of each client.

Our business planning services include:

• Business Plan Consultants – Our experienced business plan consulting team has helped numerous businesses from small businesses to multi-million dollar corporations identify new opportunities and develop their business plans using existing information where possible, or by conducting new research as needed.
• Business Plan Writing Services – Our business plan writers are experienced professionals who are committed to providing you with a business plan that delivers results. Depending on your needs, our business writers can either help you complete the research and writing process, or write your business plan for you from start to finish.
• Done For You Market Research – Our market research team can conduct independent market research for your business through access to several market research databases. Utilize this research to help you write a business plan that is more in-depth and gives you a distinct advantage over competitors in your industry.
• Private Placement Memorandums – Growthink’s experienced business consultants can help you prepare a private placement memorandum (PPM) that is tailored to the unique needs of your business. PPMs are used to help businesses raise capital from accredited investors.
• Growthink’s Ultimate Business Plan Template – Our simple business plan template is available in MS Word and when completed can be sent to investors and lenders in Adobe PDF format. Use this business plan template to help you focus your business concept on the information that is most relevant for lenders and investors, while also providing a flexible foundation for future growth.
• Business Plan Writing Help Center – We have a wide variety of free resources for business planning on our website. Use our selection of 200+ business plan examples to help you write a business plan specific to your industry or learn more from our selection of business planning and funding articles.

No matter what product or service you choose, we wish you success in your business venture

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How Much Should a Business Plan Writing Cost?

Free Guide On Writing A Business Plan

• March 2, 2024

This blog will give you a clear idea about business plan cost and other relevant factors associated with it.

What works for someone else might not work for you. The same goes for a business plan and the type of services you take to write one.

You might have heard and read about the importance of business plans from various resources, so the next step would be to decide upon the method and budget for writing your plan.

Depending on your business, you might not need to spend hundreds or thousands of dollars on a business plan. As effective spending matters for businesses, it is the best practice to go through all of your options and pick the one that fits your business and budget the most.

In this article, we’ll discuss different sources for writing a business plan, and normally how much writing a business plan costs .

How much does writing a business plan cost?

Hiring a business plan writer to help you write a business plan generally costs anywhere between $1,000 and $25,000 , depending on the level of experience and the type of business plan. Expect to spend $25,000 to $50,000 when hiring a consultant.

However, using AI-powered tools to write your business plan costs much less. AI business plan generators like Upmetrics cost between $7 and   $15 a month.

Traditional vs. AI-powered business writing

Working with professional business plan writers or consultants can be costly and requires a great deal of back-and-forth communication. It can be quite overwhelming at times.

With AI-powered business planning tools like Upmetrics, you can easily create comprehensive and investor-ready business plans in just about a few hours.

Business plan writers or AI tools, which are more budget-friendly?

Hiring a professional business plan writer to draft your plan is a pricey affair. Experienced writers generally charge anywhere between $1000 to $3000 and even more. Whereas, Upmetrics’ pricing starts from $7/month .

Generic or unique professional-looking plans?

Business plan consultants and writers generally use a one-size-fits-all approach. The odds of your business plan ending up looking exactly the same as dozens of others are pretty high.

Modern AI tools, however, allow you to customize your business plan and presentation to meet the uniqueness of your business model.

Both are great options to consider, but at the moment, business plan tools seem to have an upper edge.

 Why hire expensive business plan writers and consultants?

Write winning business plans in minutes with AI

Plans starting from $7/month

Understanding business plan writing costs

Let’s explore and understand the various processes/methods of writing a business plan to help you find the most suitable one.

Hiring a business plan writer

Entrepreneurs often consider it as the go-to business planning solution as they may not have the time to write a business. If you have a budget to spend a few thousand dollars on creating a business plan, It’s surely a trusted and proven way of writing a business plan.

How much does the business plan writer cost?

A business plan writer costs anywhere between $1000 to $3000 . It is the appropriate method for businesses that need above $50,000  in investment and have complex planning and staffing needs.

Pros and cons of hiring a business plan writer

• Time-saving.
• Well researched with added points.
• Business plan writers know the jargon and style investors prefer.
• Let you focus on other aspects of your business.
• Might look homogenous with other plans in the same industry.
• You might have difficulty including your own vision in the plan.
• Would be a big drawback if the writer doesn’t know enough about your industry.
• Can be difficult to present as you’ve not written it.
• Doesn’t help you answer an investor’s tangent questions.
• Can be expensive, especially if you’re just starting out.

Hiring a business plan consultant

Hiring a consultant is one of the popular options, especially if you are trying to attract a particularly large sum of investment. A consultancy company would help you at every step from research to strategizing, business plan writing, and updating the plan.

But on the downside, consultancy services can be pretty expensive and isn’t for every business.

How much does the business plan consultancy cost?

Consultancy services may cost anywhere between $25,000 to $50,000 . This also depends highly upon the firm you’re approaching and their level of expertise in the industry.

Consultancies also charge on an hourly basis. The rates also depend upon the complexity of the work.

Pros and Cons of hiring a business plan consultancy

• Consultants are usually experts in the niche and can give out-of-the-box ideas.
• They look at things from an unbiased perspective.
• They charge a predecided fixed amount.
• Help with updating and improving business practices and plans.
• They handle multiple clients and struggle with availability.
• They don’t give a guarantee of success.
• Consulting services are expensive and not viable for everyone.
• It can be difficult if the company leaves the organization.
• Many consultants go for generic solutions which might not work.

Using an AI business plan generator

Using an AI business plan generator can be considered the most reliable, efficient, and cost-effective way of creating a business plan for new-age entrepreneurs.

Business planning software like Upmetrics can help you create a detailed business plan in less than an hour.

The subscription includes 400+ sample business plans, AI business assistants, video tutorials, well-written documentation, and guides to ensure you are on the right track.

Upmetrics costs just $7/month on an annual subscription, making it an affordable option for startups and small businesses compared to other business planning processes.

Pros and Cons of using an AI business plan generator

• AI-powered text generation to write your business plan.
• AI-powered revenue and expense stream suggestions.
• Automatically generates financial statements and visual reports.
• It is time-consuming.
• You might need additional help.

Say goodbye to your old-school business planning methods

Using Combined Services to Reduce Business Plan Costs

Now if you don’t want to spend a huge chunk of money on a business plan writer or consultancy, but need a little more help than a business plan software would provide then you can also use a combination of services to write your business plan. If you need more help with the leg work you can do so with the help of a consultant and business plan software.

And if you can do the initial research and create the first draft of your business plan, you can use a combination of business plan software and business plan writer.

This might be a good choice for entrepreneurs who have the initial idea and a rough plan of how to set goals and milestones but would need more help with writing a business plan.

Why Does Your Personal Touch Matter in Your Business Plan?

All of us know that a business plan is much more than a 20-30 page long document. It captures the essence of your business and acts as a roadmap on your business journey. So, even if you’d save loads of time by using a business plan writer or consultant, your business plan would lag in a personal touch and unique vision.

Also, it is important to note that you can’t rely too much on consultants. No matter how good they are at their job, they’re still an external source and can leave your business anytime, and that would be a major setback for your business if you rely solely on your consultant.

Hence, taking part in your business plan writing process would ensure that you have a strong grip on your business from the beginning.

In conclusion, if you look through your options, you can not only save money but also pick a method that would be the best for your business.

A business plan is perhaps the most important document for your business.

Hence, it is essential for you to think through these 4 steps:

• Figure out the time and resources you have.
• Figure out what you can do by yourself and the areas you would need help in writing.
• After you find out what services you’d need, study the different software, writers, and consultants available on the market.
• Look through the services and what their previous clients say about them before you go ahead and take your pick.

At the end of the day, do your research, pick the right services, and take part in the process with full force and determination.

After all, your business dreams deserve all of it and more!

Build your Business Plan Faster

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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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• Business Planning

How Much Does a Business Plan Cost - Free vs Paid Options

Written by Vinay Kevadiya

Published Jul. 9 2024 · 9 Min Read

How much does a business plan cost? Almost every entrepreneur comes across this question once in their entrepreneurial journey. I did too.

So, to answer your question, it can cost nothing to a few thousand dollars. I know that’s quite the range, but it is how it is.

It depends on several factors, such as how you write your plan (hire someone or do it yourself), what type of plan you create, and a few other things.

Don’t overthink it. We did all the research and compiled this article. Let’s get straight to answering your question. ?

How much does it cost to write a business plan?

The cost of writing a business plan can vary widely depending on several factors. It can cost as high as $25,000 and as low as $7 (or even free). It all depends on the complexity of your plan, the industry you work in, and, most importantly, the mode of creation.

While professional planners and writers ask for thousands of dollars, using an AI business plan generator can help you do it at much lower costs. So, it’s all up to you.

Here’s a breakdown of the typical average costs with various other factors:

Factors that influence the business plan cost

The cost of a business plan depends on multiple factors and what route you decide to take when creating it. Let’s take a deeper look at them.

• Length and complexity: Longer and more complex business plans will cost more to write relative to shorter, leaner, and simpler business plans.
• Size of your company: A business plan for a large-scale company is much more complex and requires a higher level of expertise, dedication, time, and length, making these business plans costlier.
• Level of the experts you hire: The level of expertise involved in creating a business plan impacts the costs. Writers with high levels of expertise charge more whereas intermediate writers charge lower fees.
• Turnaround time: If you want your business plan faster, it usually involves additional costs. Generally, for a small to mid-sized business, it takes 3 to 4 weeks to write a fleshed-out business plan.
• Mode of creation: Hiring professional writers or consultants is more expensive compared to using any business plan software or AI business plan generator.

Different options to write your business plan

There are various options available to suit different needs and budgets. Here, we'll explore the different methods for writing a business plan, helping you choose the one that best fits your needs:

1) Business plan writers

Hiring professional business plan writers means utilizing the expertise and knowledge of writers to create your business plan. These professionals bring their experience to write a detailed and compelling business plan that aligns with your business goals and vision.

The cost of hiring a plan writer will differ based on your industry and the writer's experience. The starting cost of a writer is around $20-$25 per hour which can rise to $10,000 for the whole plan.

Best for: Mid-size companies needing a detailed business plan.

• Professional writers ensure your business plan is well-written and persuasive.
• They provide a logical, organized format that covers all essential aspects of your business.
• The plan is customized to your specific business needs, industry, and target audience.
• Hiring professional writers is costly, especially for high-quality, comprehensive plans. (2,000-15,000)
• Success depends on the writer's understanding of the business idea.
• Finding and working with the right writer can be time-consuming and demanding.
• Experienced writers have general business knowledge but may lack specific industry expertise

2) Business plan consultants

Startups or individuals seeking large sums of investment prefer to go to a professional business plan consultant.

These professionals analyze your business, industry trends, and market conditions to create a comprehensive and customized plan.

The cost for consulting services typically ranges from $5,000 to $25,000 or more, depending on the scope and depth of the project.

Best for: Large companies and enterprises seeking significant amounts of funding for their business.

• Consultants offer strategic guidance and deep industry knowledge.
• They create tailored business plans based on thorough analysis.
• The plans cover all aspects of the business, including market analysis and financial projections.
• Consulting services are costly.
• Working with consultants requires significant time and involvement.
• The plan's effectiveness relies on the consultant's understanding of your business.
• You may have less direct control over the plan's content and direction than doing it yourself.

3) Business plan templates

Using a business plan template is a popular option, especially if you're looking to create a comprehensive business plan without incurring high costs.

However, templates might not be suitable for every business, particularly if you need a highly customized or industry-specific business plan.

Business plan templates are often available for free or at a low cost, typically ranging from $20 to $200. The cost depends on the complexity of the template and the features it offers.

Best for:  Startups and small businesses needing a structured plan to get started quickly.

• Templates provide a clear framework, ensuring all critical sections are included.
• They are significantly cheaper than hiring a writer or consultant.
• Reduce the time required to create a business plan from scratch.
• It doesn’t fully capture the unique vision of your business (limited customization options).
• Users may need to spend time understanding how to effectively use the template.
• Some templates might not address specific industry trends or requirements.

4) AI business plan generator

With AI-powered business planning tools, you can easily create business plans with a few basic details and a list of simple prompts.

So, for entrepreneurs and startups, an AI business plan generator is the most reliable and cost-effective for creating business plans.

It is time efficient too. Especially, if you use an AI business planner like Bizplanr

nr, you can write your plan in minutes! Plus it only costs around $7 to $15 .

Best for: Startups, students, small businesses, nonprofits, consultants, and busy professionals who need affordable and customized plans.

• Quickly generates comprehensive business plans, saving time and effort.
• Customizes plans for specific industries and business models.
• Automatically generates financial statements and visual reports.
• Allows easy updates and revisions based on feedback.
• This may not fully capture the unique vision of your business.
• Can generate standard plans that might lack innovative or creative elements.
• The quality of the output is highly dependent on the accuracy and detail of the input provided.

How to choose the right option

Of course, writing the plan is not easy and so is not the choice of how to write one. It depends on various factors and here’s a step-by-step guide to help you make an informed decision:

Assess your budget

The route you take to formulate your business plan heavily depends on the budget you’ve allocated for it. If you have a lower budget, it’s best to go for cheaper options. But within these cheaper options, too, an AI-powered plan generator is your best bet. Through them, you can opt for a highly accurate, yet inexpensive medium for business plan production

Evaluate the complexity of your business

If your business activities are complex, your business plan will need to be more detailed and longer. This includes having multiple products, targeting different markets, meeting regulatory requirements, operating on a large scale, handling complex finances, and having strategic partnerships.

Consider your own expertise and time availability

If you have a solid background in business planning and enough time on your hands, plan the draft yourself using guides and templates available online. However, using AI-powered software like Bizplanr is a more time-efficient option.

Balancing cost with potential return on investment

A well-researched business plan will attract potential investors, secure loans, and guide decisions. Investing in high-quality resources and professional help is worth it if it increases your chances of achieving business goals. The cost of creating the plan must be at most the potential ROI.

Why is an AI-powered business planning tool suitable for you?

Preparing a business plan is no easy task. It requires a lot of resources, the right tools, and additional support. However, AI-powered business planning software is a great alternative for business owners and entrepreneurs. With an AI-powered tool, you

• Make your business plan writing process quicker by automating data analysis and content generation.
• Create a highly personalized plan by analyzing input about your business goals, target market, and competition.
• Ensure that your business plan is based on current data and takes forecasted future market behaviors into consideration.
• Get a scalable and adaptable business plan that you can adjust when the business environment changes.
• Benefit from better financial forecasting and budgeting, and more accurate market analysis.

Plus, business plan consultants who draft plans are prohibitively expensive. With AI-driven services like Bizplanr, you get a cost-effective alternative without compromising on quality.

Reduce business plan writing costs with Bizplanr

Now that you know how much it costs to write your business plan, it’s clear that an AI-powered tool like Bizplanr is the most cost-effective solution to create business plans—be it a one-page business plan or a detailed one.

If you need a business plan that wins investors and sets a strong foundation for your business without breaking the bank, Bizplanr could be a great choice.

With its context-aware AI generator, Bizplanr streamlines the entire business planning process.

Get started with Bizplanr and write your first draft today!

Frequently Asked Questions

Are there free resources available for business planning?

Yes, there are multiple free online resources available for writing a business plan and business planning. You have readable resources, video resources, free templates, and more that you can use to formulate your own business plan.

Is it worth paying for a professional business plan?

The real answer is that it depends. But from our research, we suggest that you should first try out a free AI-powered business plan and test how it works for you. If you find it inadequate, you can combine other sources to come up with the perfect business plan for yourself.

How long does it take to write a business plan?

It can take anywhere between just a couple of hours to a few weeks depending on the method you choose. AI-powered business plan creation is a much simpler process. You can create a business plan within just a couple of hours compared to the week-long process that a consultancy or company might take.

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

Follow Vinay Kevadiya

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

LLC Formation

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

with Fundera by NerdWallet

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

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

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

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

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

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

On a similar note...

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How Much Does A Business Plan Writing Cost?

If you’re considering finding financing for your next business venture, a business plan is a crucial part of the application process. It will show potential lenders that you’ve done all the research and planning needed to make sure it’s successful, so they can rest assured knowing their investment in this new venture has good odds of turning into gold!

A business plan will cost you an average of $2,500, depending on the size of your company and the industry you’re in.  If you plan on writing your own business plan, there is software that can assist you for $20/month up to $300/month, depending on the software features and the amount of assistance you need.

You can choose to use a business plan writer that will cost you anywhere from $1,000 to $3,000 depending on their expertise and how in-depth you need your business plan to be.

Another option is to use a consultant company to create your business plan. The price for this will be from $5,000 to $15,000, depending on how many layers your organization will have and the amount of groundwork required to execute your plan.

Average Cost of Business Plan Consultants

How Much Does Business Software Cost?

There is a couple of free business plan software that makes it easy to write a business plan. However, while this tool is quite detailed and has the instructions on how to fill out the plans, they are quite basic in design.

If you want a business plan software that has a professionally designed layout and color charts for financials, you can buy the software. Many business plan software packages include teaching components and several template pages in case you get stuck on a section. The package may also include features that calculate growth and sales projections based on real figures. A business plan software such as Palo Alto Software offers a variety of features and offers a monthly fee of $20 per month.

This software allows you to write over 500 sample business plans and over 9,000 industry profiles that to support your plan. The software not only helps compile data, research, and write the actual business plans; they also offer a dashboard for monitoring your business health. You can also track financial data, along with your sales goals and budget, so that you can make the necessary adjustments.

Should You Write It Yourself? 

The cheapest way to get a business plan is to compose it yourself. Maybe you think you don’t need a consultant or software for writing a business plan. If you are looking to seek a capital investment of less than $200,000, you may want to consider writing the business plan yourself after reading some books or taking a class, or getting coaching from someone who has written successful business plans.

You should consider taking a business planning class through Small Business Association (SBA) or SCORE. Even if you decide not to write your own plan, you can get a much better idea of what you want out of a business plan and what to expect.

One of the most important jobs of an entrepreneur is time management and performing the task they are best skilled for. Many businesses decide to use software or hire a consultant to do their business plans, mostly because they can’t afford the learning curve to be able to create an in-depth business plan that will meet the needs of investors or lenders.

Some of the reasons to consider hiring a business plan consultant include:

• Business planning is completed much faster with a professional who knows the process. Every entrepreneur’s intention is to get plans completed, but several months later, they still haven’t done the work. Business planning work should be a high priority, but it’s quite difficult to get to it when you have a more pressing matter at hand. The sooner you complete the plan, the sooner you can start getting funds for your business. Overall, the price of hiring a consultant may be small.
• With a professional business plan consultant, your project will be completed in a way investors and lenders will respect. Business consultants understand how finance people look at plans and what they would love to see and what to play down to get the funding your business needs.
• Business consultants offer objectivity that will allow for unbiased projections and expectations for your business. They will be much more objective in the process, which will less likely make it that your business will have problems after receiving funding.

However, if you are looking to keep start-up costs as low as possible and ready to do some of the initial leg work, you can opt for a business plan software. The reason to use a business plan software include:

• Well-made business plan software can use the raw substance of your ideas and organize them into a standard plan template.
• Business software offers the ability to customize the appearance of your plan and use terms particular to your business.
• Business plan software breaks down highly complex processes in steps that are easy to understand.
• The software can do a better job at protecting your data than you would on your own because most business software has a cybersecurity firm that manages all of their client’s data.

All the options listed above are good, but if you are trying to decide on the best, you have to determine your need for the business plan and the amount you can afford to spend on the plan. Of course, you don’t have to choose just one of these options.

Why Use A Writing Service?

There are many reasons why people decide to outsource their business plan to a writing company or consultant, including lack of time or writing skills. 

It can also be a way to help your company get started the right way by getting the knowledge and insight from someone that has been in business for years.

If you are unsure what path is right for you, the following information will be sure to help! We will explore what goes into a business plan and how much it costs to create one. Let’s get started!

If your business plan looks as if it is going to be more complex, you may want to hire a business consultant professional consultant to do the job for you. The business consultants will be able to ask you questions about your business and guide your thinking so that you can create a comprehensive and well-detailed business plan that best meets your needs.

For instance, Ground Floor Partners, professional business growth consultants, quote their charges for business consultancies as ranging from $5,000 to $20,000, depending on the complexity of the business project.

These figures are usually based on their hourly rate, and some other special services may be included. Companies like Thumbtack also match entrepreneurs with business plan professionals, and the average rate for a business plan consultancy service ranges from $70 to $120 per hour. They will not only write the business plans but also review plans and make recommendations based on the completed work.

Software That Helps Write a Business Plan

There are also many apps and software that can assist you with writing a business plan on your own. Apps such as Business Plan Pro For Windows can help you write professional business plans for low monthly charges!

These apps will run you anywhere from $20 per month to $300 per month.  

The cost of the app will largely depend on the level of assistance you need and the software features. Apps can be a great way to help you create an effective business plan without needing to hire a professional, but they’re not 100% done for you.

Apps have disadvantages as well. One drawback is that you have to sign up for a subscription most of the time, which isn’t necessarily saving you much more than just hiring someone to create your business plan.

Another is that some apps are restricted by geographical location or do not offer free trials for their products.   

Also, if you are looking for detailed guidance with your business plan creation, then you might be better off hiring a professional service.

If you’re unsure of your future goals and aren’t sure how you want to operate your business yet, then hiring a professional may be in your best interest.

There are also many other benefits to hiring a professional, such as having someone that can hold you accountable for your goals, writing a clear and concise plan, and seeing the bigger picture.

Why Do I Need A Business Plan?

A business plan lays out the foundation of a company and acts as a road map for its future. Businesses often develop a general or high-level business plan early on during their start-up phase.

They may also create more detailed plans that include supplemental information such as marketing strategies and sales forecasts depending on how funding is needed and the stage of company growth.

To effectively plan for the future of a business, companies typically research their market and competitors while identifying objectives and goals.

A company may also use past performance to determine industry trends. The information collected is then formulated into a practical blueprint for growth that can be used to make informed decisions in day-to-day operations and long-term strategies.

Now that you know how you want to create a business plan, let’s discuss what you can use a business plan for. A business plan can be used in many different ways by different people.

One of the most common uses is when trying to apply for a loan, but that’s not all a business plan can come in handy for. Business plans are also good to have when seeking out new clients. It shows them how much time and effort you have put into your business and how successful you hope it will become.

When To Write A Business Plan

If you are thinking of starting a new business or if you are going to be applying for a business loan, an excellent place to start would be the creation of a business plan.

If you are applying for a loan, you must have a solid business plan according to the bank’s requirements.

Most banks require that any new business have access to at least three years of financial information to establish credit.

Once you have established this track record, you will be able to take out loans and venture capital when starting new businesses or expanding your company.

It is also essential to have a business plan if you want to go into business with somebody.

You can draft a partnership agreement that may include future plans for the business or salary for each business owner. A business plan should also be a requirement if you are looking to expand your company overseas.

You can use your business plan to attract investors overseas and provide them with information about what they will be gaining from the deal. This plan will also give you a route to follow to turn your business dream into a reality.

Types of Business Plans

There are different types of business plans that you can draft depending on the goal you want to achieve.

A business plan will typically be broken down into two or three different types: a startup plan, a long-term strategic plan, and a marketing plan. Here is one way to break them down:

Startup Plan

The first plan that a new business will draft. This plan is a high-level overview of a company and how it intends to run.

This type of plan may include details about your objectives, goals, significant milestones, sources of funding for the business, and your marketing strategy.

This type can be created by the individual founder(s) or outsourced to a business plan writing service to draft the plan for you.

Long-Term Strategic Plan

In this case, companies need to have a solid foundation to work from.

This plan is more detailed than the startup plan and will usually be created by a consulting firm. 

It focuses on how a company can grow and what it needs to do to meet its objectives.

This type of plan will often outline deadlines, budgets, product or service roll-out strategies, staffing levels required for each department, and revenue projections.

Marketing Plan

The marketing plan is more of a supplemental document that is used to complement the business plan.

Companies typically use this type of document when looking for funding or trying to sell their product/service.

This document will often include market trends, sales strategies, advertising and promotions plans, pricing strategies, and marketing campaigns.

Depending on the types of funding being sought out, a company may decide a consultant or professional writing service is their best option to have a better chance at securing funding.

What Should Be In My Business Plan?

If you are wondering what should be in a business plan, several components make one complete.  We will outline what elements your business plan will need to contain to be a complete and actionable plan.

Executive Summary

The first thing that is included in your business plan is the executive summary. This part of your business plan serves as its introductory statement, so you want it to be catchy enough for someone to read on.

One effective technique for an executive summary is using a customer story or success story.  This helps establish yourself as more credible because investors like companies that have proven success.

Product Or Service

This is probably the most important and most time-consuming aspect of your business plan. You need to demonstrate that you have a product or service that people will actually want and pay for.   

If your product or service does not solve a problem, no one will use it. Make sure you list what problems your company solves clearly and concisely so potential investors know exactly why they should do business with you.

Market Analysis & Financial Plan

Next, you will go into more detail on how much money you will make off of this venture within the next few years.  You must put together both an income statement and a cash flow projection for this portion of your business plan.   

In addition to the financial plan, you should also include how much money you need to start and run your business for a certain amount of time.   

Capacity And Order Quantities

This heading will discuss the number of units that can be produced or supplied by your factory or other sources, as well as the number of customers you can serve.   

By going into detail about your capacity and order quantities, potential investors and buyers will be able to know what type of revenue they could potentially expect from your company in a given amount of time.

The next aspect that should be included in your business plan is an effective marketing strategy. Your marketing plan is essentially your sales strategy, so this section needs to be strong for you to get the amount of revenue you want out of your business venture.   

You should also include information like how much money you will spend on marketing tools and where that money will come from.  

Physical Location And Facilities

This section will discuss what type of physical location or facilities your company will need to operate effectively and how much it will cost you.

If you do not have the necessary space or facilities for running your business already, you will need to explore options like buying or leasing commercial office space.

Management Team

The next aspect of your business plan is an overview of how capable your team is. If you are new to running a business or lack depth in certain areas, it may be wise to hire a management team. If this is the case, make sure to include what types of skills your managers have.

Financial Responsibility

This part will give a quick rundown on who is responsible for all of your finances and how you plan on dividing responsibilities between yourself and your employees.  

Be as transparent as possible and show how much everyone is expected to contribute financially to the venture.   

The next part of your business plan discusses the long-term goals or benefits you expect this business will bring you and your partners.  

Do not forget to include your vision of where your company will be in five years, as well as how it will positively affect your life. 

Start Your Dream Business

As you can see, creating a business plan does not have to be complicated or expensive. You may use an app, website, or consulting company to create your plan and do not need to do everything yourself.

However, if you are looking for the best results, it is wise that you hire either a business plan writer or consulting company. They have the experience and knowledge needed to create a professional and successful business plan.

In addition, they will be able to create a well-organized and complete plan while you work on building your dream company!

Brent McOlson is not your typical small business owner. He's a seasoned entrepreneur and a true maestro in the intricate world of business operations. With a remarkable career spanning over two decades, Brent has amassed a treasure trove of experience and expertise that has been instrumental in the success... Read More

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.

Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:

• Problem: Simple and straightforward number of problems you have identified, ideally three.
• Solution: The solutions to each problem.
• Unfair Advantage: Something you possess that can't be easily bought or replicated.
• Key Metrics: Important numbers that will tell how your business is doing.

Startup Pitch Deck

While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.

Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.

Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.

Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.

Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.

• Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
• Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
• Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
• Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
• Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
• Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
• Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
• Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
• Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
• Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
• Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
• Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.

It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.

Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.

Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan

• Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
• Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
• Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
• Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.

Business Plan FAQ

Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time.  They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.

Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans.  A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.

A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs.  Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.

The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.

A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.

Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.

Exlore Further

• 12 Key Elements of a Business Plan (Top Components Explained)
• 13 Sources of Business Finance For Companies & Sole Traders
• 5 Common Types of Business Structures (+ Pros & Cons)
• How to Buy a Business in 8 Steps (+ Due Diligence Checklist)

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

How Much Does a Business Plan Writer Cost?

Written by Dave Lavinsky

A business plan writer is a professional who evaluates and creates a business plan for various purposes. They are usually hired by large corporations, but they can also be hired to create a business plan for startup companies, established businesses, and non-profit organizations.

So, what is the cost of professional business plan writing services? The answer depends on a variety of factors, but in general, you can expect to pay a few thousand dollars at least. For most professional business plans, the average cost is between $2,500 to $15,000 or more for a comprehensive business plan written by an experienced business planning expert.

Get Instant Business Plan Price Quote

Of course, a business plan writer’s cost will also depend on their experience, the scope of the business plan, and the amount of time it will take to complete the business plan. In some cases, you may be able to negotiate a lower rate if you are willing to pay for the entire project upfront.  

Factors That Can Affect Business Plan Cost

The cost of a business plan can vary significantly depending on the size and scope of the business plan and financial model. Some of the factors that can affect the cost include:

• Length and complexity of the business plan
• Number of interviews and consultations required
• Level of market research needed
• Number of revisions required
• Amount of time needed to complete the project
• Experience and qualifications of the business plan writer
• Types of services offered (e.g. writing, research, consulting)
• Location of the business plan writer

It is important to keep in mind that the cost of a business plan should not be your only consideration when choosing a professional. The quality of the writing and the level of service should also be taken into account. A successful business plan can be a helpful tool in growing your business, so it is important to choose a business plan writer who you feel confident will produce a high-quality document.  

How to Save Money on a Business Plan

If you are looking to save money on writing a complete business plan, there are a few things you can do:

• Ask the professional business plan consultant or writer for a discount if you are willing to pay for the business plan upfront.
• Shop around and compare prices from different business plan writers.
• Limit the scope of the project to reduce costs.
• Write a business plan yourself with help from a friend or online resources.
• Use a downloadable business plan template or business plan software.

If you are looking for someone to write your business plan, it is important to do your research, comparing pricing and services before choosing someone. Keep in mind that the cost of a business plan can vary depending on the size and scope of the project, but the result will be a well-written and professionally-crafted business plan that can help your business succeed.

BusinessPlanConsulting.com is a professional business plan consulting firm with over two decades of business planning experience. Our business plan writing service starts with an instant quote. To get started, just click below and answer 6 quick questions about your business planning needs. 

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Cost Breakdown: How Much Does It Cost For A Business Plan

When considering the investment required for a business plan, many are surprised to learn that costs can range anywhere from a few hundred dollars to several thousand. On average, small business owners might spend roughly $1,500 to $3,000 for a detailed plan. Yet, the complexity and scope of the business dramatically affect this estimate, requiring a nuanced approach to budgeting.

Historically, the cost of business planning has evolved alongside the sophistication of market research and analytics tools. A Deloitte survey found that 70% of businesses today utilize professional services for business planning, emphasizing the importance of expertise and precision. Choosing between self-preparation and professional consultancy can decisively impact both cost and outcome.

How Much Does It Cost for a Business Plan

The cost of a business plan can greatly vary depending on several factors. On average, small business owners might spend between $1,500 and $3,000. This range can be influenced by the complexity of the plan and the level of detail required. Some may spend as little as a few hundred dollars, especially if they use pre-made templates. High-end bespoke business plans can even cost up to $10,000 or more.

Several key factors affect these costs. One significant factor is the size and type of the business. Startups might need more detailed plans than established companies. Additionally, the industry sector can influence the cost due to specific market research needs. The choice between hiring a professional service or creating the plan independently also plays a role.

Using professional services for business plans typically offers higher quality and expertise. These services conduct thorough market analysis and financial forecasting . However, this expertise comes at a price, often ranging from $2,000 to $6,000. Some professionals charge by the hour, which can accumulate quickly. Alternatively, DIY methods can save money but might lack detailed insights.

Many small business owners try to balance cost and quality. They might start with a basic template and add custom elements. Utilizing online resources and software tools can also help keep costs low. It’s essential to allocate enough budget to cover essential components. Investing in a good business plan can pave the way for a successful business venture.

Average Costs of a Business Plan: Based on Business Size and Type

The cost of a business plan can differ greatly based on the size of the business. For a small business or startup, a basic plan might cost between $1,500 and $3,000. These plans usually include essential elements like market analysis and financial projections . Medium-sized businesses, requiring more detail and strategy, might spend anywhere from $3,000 to $5,000. Plans for larger enterprises can surpass $10,000 due to complex requirements and extensive research.

The type of business also significantly influences the cost. Retail businesses often need detailed market analysis and location studies, which can drive prices higher. Technology startups, requiring extensive technical and financial details, might find themselves at the higher end of the cost spectrum. Conversely, service-based businesses might spend less if their operational and market environment is straightforward. Real estate and manufacturing sectors will likely fall somewhere in between.

A custom business plan for a manufacturing business might cost more due to additional needs like supply chain assessment and production forecasts. On the other hand, an online retail business might incur lower costs if it leverages e-commerce platforms and existing sales data. To better visualize this, consider the following table illustrating the average cost ranges for different business types:

Choosing the right service provider is crucial to aligning costs with business needs. Many firms offer tiered pricing based on the level of detail required. It’s wise to get multiple quotes and assess the scope of services included. Remember, investing in a well-crafted business plan can significantly influence your business’s success and attract potential investors.

Factors Affecting the Cost of a Business Plan

Several factors influence the cost of a business plan. One of the most significant factors is the complexity of the business. For instance, a straightforward local business might require less detailed analysis than a tech startup. The amount of research needed also impacts the cost. More detailed market and competitive analyses will drive up the price.

The experience and expertise of the plan’s creator are crucial. Hiring a seasoned consultant or firm generally costs more but can provide valuable insights. On the other hand, using a less experienced freelancer or doing the plan yourself can reduce costs. The choice of the writer is often a trade-off between expense and the quality of the final product. Additionally, the length of the business plan itself can add to the cost.

The geographic location of the business also plays a role. Firms in major cities may charge more due to higher operational costs. Conversely, remote or online services might offer competitive rates. Companies in specific industries, like financial services or healthcare, may need specialized knowledge, increasing costs further.

Customization level is another factor. A highly tailored plan, specific to unique business needs, will cost more than a generic template. Elements like detailed financial projections, marketing strategies, and growth plans add to the overall cost. Customization ensures the plan aligns closely with business goals but requires more time and effort. This often results in higher fees.

The Balance between Cost and Quality in Business Planning

Finding the right balance between cost and quality in business planning can be tricky. It’s crucial to ensure that the plan is comprehensive enough to attract investors and guide the business. However, overspending on the plan can strain your budget. The key is to invest wisely, getting the best value for your money. This often involves comparing different services or templates.

Hiring a reputable consultant can increase the quality of your business plan. Experienced consultants bring valuable insights and detailed market analyses. Though higher in cost, the potential benefits often outweigh the expense. On the other hand, opting for a cheaper DIY approach may save money but could lead to a less effective plan. Thus, balancing these factors is essential for success.

Using professional services for essential components like financial projections can add value to a basic plan. You can mix custom and pre-made elements to create an effective plan without overspending. Resources like online templates and business plan software can also be useful. By combining these resources, you achieve a good balance of cost and quality.

Evaluating the specific needs of your business helps in determining the right balance. A startup may require a more detailed plan than an established business. Conducting a cost-benefit analysis can be beneficial. Weigh the potential gains against the expenses to make an informed decision. This approach ensures that you don’t sacrifice quality for lower costs.

Gaining insights from multiple experts can help fine-tune the balance. Engaging with various consultants or reviewing multiple templates provides a broader perspective. This allows you to identify the best features from each. Implementing these features strategically maximizes both quality and value. An informed approach can lead to a successful business plan that doesn’t break the bank.

DIY vs. Professional Services: A Cost Comparison

Creating a business plan yourself (DIY) can save a lot of money initially. Using online templates and resources, it might cost you around $100 or even less. However, the quality might not be as high, and critical details could be missed. On the other hand, hiring professional services ensures a comprehensive plan. The cost for this can range from $2,000 to as much as $10,000 depending on the complexity.

Professional services offer several advantages over DIY approaches. They provide in-depth market research, financial analysis, and strategic planning insights. This expertise can significantly enhance the effectiveness of your business plan. But this level of expertise comes at a premium. You are essentially paying for the consultant’s time, experience, and resources.

Comparing the two options reveals distinct pros and cons. DIY methods are cheaper but require significant time and effort. They are suitable for straightforward business models. In contrast, professional services deliver high-quality, personalized plans but are costly. This makes them more suitable for businesses needing detailed planning and analysis.

To help visualize these differences, consider the following table:

Ultimately, the choice depends on your business’s specific needs and budget. Small startups might get by with a DIY plan. However, more complex businesses or those seeking investment might benefit from professional services. Weighing the costs and benefits will help you make the best decision for your situation.

Investment in a Business Plan: Why It’s More Than Just Money

Investing in a business plan involves more than just spending money. It requires time, effort, and dedication to detail. Spending money on research and expert advice can save headaches down the line. Additionally, it helps you understand your business vision better. The benefits of a well-crafted business plan extend far beyond the initial financial outlay.

Time spent on a business plan is an investment in itself. Thorough planning ensures that you are prepared for possible challenges. This preparation can save time and resources in the long run. It’s not just about making quick decisions but about making informed ones. Every hour spent planning is an hour saved from potential future issues.

A detailed business plan can also attract investors and lenders. These stakeholders look for well-thought-out strategies and clear financial projections. Their confidence in your plan can lead to easier funding opportunities. An investment in a good business plan shows your seriousness and commitment. This can make all the difference in securing necessary funds for growth.

Moreover, a business plan serves as a roadmap for your business journey. It helps in setting clear goals and milestones. A well-laid-out plan can guide daily operations and long-term strategies. This direction keeps the business aligned with its core objectives. Thus, investing in a business plan is about setting a strong foundation for your business.

Tips to Minimize Costs without Compromising the Quality of a Business Plan

Minimizing costs while maintaining quality in a business plan is achievable with strategic planning. One effective way is to use free or low-cost business plan templates available online. These templates offer a structured starting point, saving you time and money. Enhance these templates by adding customized elements specific to your business needs. This mix ensures you have a solid plan without high expenses.

Leverage affordable business plan software for professional-quality results at a fraction of the cost. Many software options include tools for financial projections, market analysis, and custom graphics. Even with basic computer skills, you can produce a polished and comprehensive document. Compare different software features to find one that best suits your requirements. Utilizing such tools helps maintain quality while keeping costs low.

Consulting educational resources like books and online courses can also reduce expenses. These resources often provide in-depth insights into crafting effective business plans. While it requires more effort on your part, the knowledge gained is valuable long-term. Library memberships, YouTube channels, or online learning platforms can be excellent sources of information at minimal cost.

Outsourcing specific parts of the business plan can be cost-effective as well. For example, hire freelancers for financial projections or marketing strategies, rather than engaging an expensive full-service firm. Websites like Upwork or Fiverr offer access to talented freelancers at competitive rates. By selectively outsourcing tasks, you control costs without sacrificing overall plan quality.

Another tip is to collaborate with local small business development centers or mentors from programs like SCORE. These professionals often provide free advice and feedback on your business plan drafts. Networking with other entrepreneurs can also offer valuable insights at little to no cost. Leveraging community resources ensures a high-quality plan without breaking the bank.

A table summarizing these cost-saving tips:

Frequently Asked Questions

Creating a business plan involves many considerations, especially regarding costs. Here are some common questions answered to help clarify the process and expenses involved.

1. What factors affect the cost of a business plan?

The complexity of your business is a major factor. A simple business might need less detailed analysis than a tech startup, which requires in-depth research and projections.

Your choice of professional services or DIY methods also impacts costs. Hiring an experienced consultant may be more expensive but can add valuable insights, while DIY approaches save money but might lack detail.

2. How does industry type influence the cost of a business plan?

The industry type significantly affects cost due to varying needs for data and analysis. For example, retail businesses often require extensive market research and location studies.

Technology startups may need comprehensive technical and financial details, leading to higher expenses. Service-based businesses could incur lower costs due to simpler operational models.

3. Is it cheaper to write my own business plan or hire someone?

Writing your own business plan is generally cheaper and can cost under $100 if you use templates and online resources. However, creating a detailed and effective plan requires time and effort on your part.

Hiring a professional service ensures high quality but comes at higher prices ranging from $2,000 to $10,000+. The decision depends on your skills, budget, and the complexity of your needs.

4. Can free resources impact the quality of my business plan?

Free resources like templates and educational courses can help reduce costs while still providing structure and guidance. They enable you to produce an effective plan without spending much money.

However, relying solely on free resources might limit access to specialized expertise or tailored advice available through paid services. Balancing free tools with selective investment in crucial areas can maintain quality without overspending.

5. How important is customization in influencing the cost of a business plan?

A highly customized business plan that addresses specific goals will typically cost more due to the additional time required for detailed tailoring. Customized plans often include personalized financial projections and marketing strategies specific to your niche.

This level of detail makes the plan more relevant and valuable for securing investments or guiding operations but involves higher fees compared to generic templates or basic plans.

Investing in a business plan is more than just an expense; it’s a strategic move for future success. Balancing cost and quality requires considering various factors like expertise, industry, and customization needs. By combining the right resources and professional help, you can craft a plan that aligns perfectly with your business goals.

In the end, the value of a well-drafted business plan far outweighs its costs. It not only attracts investors but also provides a roadmap for growth. With thoughtful planning and smart spending, you set a solid foundation for your business to thrive.

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Understanding Common Business Startup Costs

Additional startup cost considerations, the bottom line.

• Small Business
• How to Start a Business

How to Estimate Business Startup Costs and What It Covers

• How to Start a Business: A Comprehensive Guide and Essential Steps
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Starting a business involves much more than just setting up an office or choosing furnishings. It demands careful financial planning and precise accounting, particularly in the initial stages.

Many new businesses make the mistake of not properly estimating and budgeting for startup costs, relying too much on a sudden influx of customers. This approach often leads to poor results and even the business's failure . A solid financial plan is key not only for managing startup costs but also for building a foundation for your venture's future growth.

Key Takeaways

• Startup costs are expenses incurred while establishing a new business. They can be divided into two categories: pre-opening and post-opening. 
• Pre-opening startup costs include a business plan, advertising, employee training, professional services, and setting up books and records.
• After the business opens, costs shift toward advertising, promotional activities, and employee salaries.
• Different types of business structures—like sole proprietorships, partnerships, and corporations—each have unique startup costs. Understanding these variations is crucial as you plan your budget and financial strategy.

Startup costs are the expenses a new business faces during its creation. Unfortunately, starting a business with no money is challenging and not an option for most businesses, which will require capital to start operations. Each business is unique and thus incurs different types of startup costs depending on its nature of operations.

For example, online businesses, such as e-commerce websites, often have lower initial capital requirements than brick-and-mortar businesses, such as restaurants. This difference in startup costs may stem from online businesses needing less physical space, fewer furnishings, and often fewer staff compared to brick-and-mortar operations.

Despite these differences, several expenses are common across most types of businesses. These typically include costs related to legal or attorney fees, licensing, initial inventory, market research, and marketing efforts to launch the brand.

Keep detailed records of all your startup expenses from the beginning. This not only helps with budgeting and planning but also ensure you can take full advantage of any tax deductions available for startup costs.

The Business Plan

Creating a business plan is crucial for starting a business as it provides a detailed roadmap and prompts careful consideration of various startup costs. Underestimating these expenses can lead to an inflated expectation of net profit, which can be detrimental for a small business owner. Hiring a consulting firm or a business plan writer to assist with creating a business plan can cost between $1,000 and $5,000 or more. The final price often depends on the complexity and length of the plan.

Research Expenses

Before launching a business, it's crucial to thoroughly research the industry and target consumer demographics. Some business owners opt to hire market research firms for this purpose.

Hiring a market research firm is essential for companies wanting to excel in competitive markets. These firms offer key insights into customer preferences and industry trends, using both qualitative and quantitative data to inform strategies ranging from product development to marketing. Their analysis helps businesses make informed decisions and identifies potential risks and opportunities.

For business owners who choose to follow this route, the expense of hiring these experts must be included in the business plan.

Borrowing Costs

Starting up any kind of business requires an infusion of capital. There are two ways to acquire capital for a business: equity financing and debt financing. Equity financing usually entails the issuance of stock, meaning the company offers shares of its ownership to investors in exchange for funds. However, this doesn't apply to most small businesses, which are proprietorships and don't issue stock.

For small business owners, the most likely source of financing is debt in the form of a small business loan . Business owners can often get loans from banks, savings institutions, and the U.S. Small Business Administration (SBA). Like any other loan, SBA business loans come with principal and interest payments that need to be carefully planned for when starting a business, as failing to make these payments can result in severe consequences.

Insurance, License, and Permit Fees

Many businesses are expected to submit to health inspections and authorizations to obtain certain business licenses and permits. Some businesses might require basic licenses while others need industry-specific permits.

Carrying insurance to cover your employees, customers, business assets, and yourself can help protect your personal assets from any liabilities  that may arise. 

Technological Expenses

Technological expenses include the cost of a website, information systems, and software, including accounting and point of sale (POS) software , for a business. Some small business owners choose to outsource these functions to other companies to save on payroll and benefits.

Equipment and Supplies

Every business needs equipment and basic supplies, which are crucial components of startup costs. When planning these expenses, you must decide whether to lease or buy the equipment. 

The state of your finances will play a major part in this decision. Even with sufficient funds to purchase equipment outright, it might be more practical to lease initially, with the option to buy later, especially if other unavoidable expenses arise. However, it's important to remember that, regardless of the cash position , leasing isn't always the most beneficial option depending on the type of equipment and the lease terms.

Advertising and Promotion

A new company or startup business is unlikely to succeed without promoting itself. However, promoting a business entails much more than placing ads in a local newspaper.

It also includes marketing —everything a company does to attract clients to the business. Marketing has become such a science that any advantage is beneficial, so external dedicated marketing companies are most often hired.

Employee Expenses

Businesses planning to hire employees must plan for wages, salaries, and benefits, also known as the cost of labor . This includes not only direct payments but also any additional benefits that contribute to employee compensation packages, including health insurance, retirement plans, and bonuses.

Failure to adequately compensate employees can result in low morale, mutiny, and bad publicity, all of which can tarnish a company's reputation and be disastrous for the business.

Set aside some extra money for any overlooked or unexpected expenses. Most companies fail because they lack the cash to deal with unexpected problems during the business season.

It's important to note that the startup costs for a sole proprietorship differ from the startup costs for a partnership or corporation. Some additional costs a partnership might incur include the legal cost of drafting a partnership agreement and state registration fees.

Other costs that may apply more to a corporation include fees for filing articles of incorporation, bylaws, and terms of original stock certificates.

What Are Business Startup Costs?

Startup costs are the expenses required to create a new business. Once the business is operational, these costs can be broadly categorized into pre-opening and ongoing or operating expenses . Pre-opening costs may include expenses for developing a business plan, market research, securing a location, and initial marketing. Ongoing costs typically involve operational expenses like employee salaries, utilities, and inventory replenishment.

What Business Startup Costs are Tax Deductible?

Tax-deductible startup costs generally include essential expenses for establishing a new business, such as market research, opening advertisements, and employee training salaries. The IRS allows new businesses to write off startup expenses of $10,000 in startup costs and $5,000 in organizational costs in the year the business begins. However, total startup costs must be $60,000 or less and organizational costs must be $50,000 or less. If the costs exceed the maximums, the remaining has to be amortized.

How Do I Calculate Business Startup Costs?

To calculate your startup costs, first identify all necessary expenses like office space, equipment, licenses, permits, salaries, and marketing. Estimate each expense by researching online and consulting with mentors or similar businesses. You can then organize these costs into one-time and monthly categories, then calculate a total to understand your capital needs. Calculating your expected startup costs can help you secure funding, attract investors, and launch your business successfully.

Understanding and planning for startup costs is crucial for any new business. These costs include pre-opening expenses, like market research and business plans, and post-opening expenses, such as marketing and employee salaries. Every business has unique costs, but common expenses often involve legal fees, permits, equipment, and technology.

Accurately estimating your startup costs is key for any new founder. Realistic figures can help secure funding from investors or banks and ensure smooth operations. Keeping detailed records from the start can also help you in financial planning and maximizing tax benefits.

Internal Revenue Service. " Why Should I Keep Records? "

PlanBuildr Business Plan Software. " How Much Does a Business Plan Cost? "

U.S. Small Business Administration. " Fund Your Business ."

Internal Revenue Service. " Publication 583, Starting a Business and Keeping Records ." Pages 9-10.

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How Much Does a Business Plan Cost?

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 December 11, 2023

Are you dreading writing a business plan and feeling unqualified to do it yourself? If so, that’s totally normal. Writing a business plan is hard work! That’s why first-time business owners, not to mention experienced entrepreneurs, often hire professionals to do the job for them.  

The price of a business plan varies depending on a variety of factors, and this guide lays out all your options for creating the kind of excellent business plan your new venture deserves. 

Search online and you’ll quickly find business plan templates and software to guide you through the process. The main advantage of crafting your own business plan is that you’ll learn a great deal about your business as you do the work, including operations, management, financials, marketing and more.  

And that knowledge could prove to be the difference between success and failure. But if you do go this route, it’s wise to have a knowledgeable person review the plan for you and make sure it’s all good. If you’re not a writer, you also might want to have an editor go over it as well. 

This option will likely cost between $0 and $400, for travel, printing and materials. 

• Freelancers

Finding freelancers to write a business plan is another option. You can find them online and you’ll pay anywhere from $200 to $2,000, depending on the length and depth of the plan. At the lower end of that scale, you’ll do the vast majority of research and preparation, which you’ll then hand over to the freelancer to put it all together into a well written plan. 

At the higher end of that price range, you should be able to find freelancers who will do the research and deliver something like a professional business plan. But if you’re looking for venture capital, this is probably not the wisest route. 

• Consultants

A professional business plan firm or consultancy is likely to do a great job, but it will cost you a pretty penny – perhaps $10,000 or more. But you’ll also get a great deal of guidance when it comes to market research , strategy, and financials. You’ll work closely with the pros to structure and develop the plan and learn from their professional expertise. 

This route will give you a plan that you can present to any investor or lender, underscoring your seriousness and strongly making your business case. If you can’t afford this option, you could go the DIY route and have a professional review it and make recommendations, which would cost much less. 

• Which Option Should You Choose?

If you don’t expect to look for funding, the DIY route is a smart move as you’ll gain so much valuable knowledge. If you plan to apply for a business loan, you may want to go with a high-end freelancer, as you should end up with a relatively polished business plan that will suffice for lenders.

If you hope to attract investor capital, professional assistance is the best way to go. It will be costly, but it should turn out to be a worthwhile investment. 

Before you make your decision, be sure to look into what’s available in terms of local resources. You might have a small business development center in your area that can provide useful guidance or even review your business plan for free. 

Whichever route you choose, just be sure to do a business plan! You’ll need that roadmap to guide you; it could be the difference between failure and success. 

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How Much Do Business Plan Writing Services Cost?

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The expense of a business plan varies greatly depending on which kind of plan you need. Some plans could be as straightforward as a executive summary and also a one-page financial worksheet, while some can be well more than 50 pages and contain many years of financial projections. Decide what type of business plan your company needs so as to help ascertain the cost of this strategy.

Hiring a Business Plan Writing Service It’s possible to hire a business plan writing service to write your business plan. More complex plans can range into the high thousands, based upon the firm, the amount of staff members operating on the strategy along with the range of the plan. Costs typically start at $1,500 for more simple projects.

Hiring A Traditional Consulting Company Using a traditional consulting company to write your business plan might make more sense when you are looking to raise a larger amount with your business plan. A lengthy plan with five years of financial projections might still cost a few thousand dollars, however, the total price can be much higher depending on the scope of work and the amount of consulting required. Some traditional consultants charge by the hour and let the customer decide how many hours client can budget for the work. For larger corporate jobs, expect to find costs ranging $25,000 to $50,000.

Our approach at GoBusinessPlans is to custom scope each engagement based on the the specific requirements of each client. Our business plan writing services typically cost between $2,000 and $10,000 depending on the work that needs to be completed.

Writing It Yourself The least expensive way to acquire a business plan usually is to compose it yourself. Purchasing the software to speed up this procedure ranges from $50 to $500, and free resources on the Web can offer both templates and suggestions. The U.S. Small Business Administration offers guides, outlines and blogs, and the SBA’s Business Strategy Tool provides step-by-step assistance in building your plan. For companies with very low startup capital, this can be the ideal option.

Combining Services Another option for businesses looking for a business plan option is potentially doing some of the initial leg work and then working with a business plan company to finalize the business plan.  A business plan can cost less if you do the research and make a draft on your own, and then introduce it to a company or consultant for review and completion. For instance, you could complete the written part of the company plan and have somebody else help with the financials. This is sometimes a good option for entrepreneurs that will articulate their business idea clearly but may need help putting together financial projections that are realistic. Review choices are offered for those who need an expert eye to check at their plan before proceeding.

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How Much Does a Business Plan Cost?

A business plan is essential for every new business, from home operations to multimillion-dollar corporations. The cost varies depending on the type of business plan you need.

Companies with specific planning needs such as market research, financial projections, or limited time can hire a business plan company to prepare a business plan.

Generally, a professionally written business plan company will charge between $2,000 and $20,000 for a professional business plan . Business plan costs vary depending on the type of industry, location, market size, business funding, and time in business.

Rates can be higher for companies that plan to use new or complicated technologies, disruptive models, have complex revenue streams, or require substantial investment capital.

You should decide what type of business plan you need to determine the average cost to write a business plan.

Hire our professional business plan writer who helps with business plans !

How much does business plan writing services cost.

DIY Business Plans

A Do-It-Yourself (DIY) is an inexpensive option for writing your own business plan. You can buy software or business plan templates to speed up this process for $20 to $300, but you can also find free resources on the web that provide business plan templates and suggestions. DIY business plans are an excellent resource for startups with very low startup capital.

You can use our sample business plans to create a business plan that follows a complete structure and format, so you won’t be left with an empty page wondering what to write.

• Business Plan Template

Make your vision a reality! A Wise Business Plan template  includes everything needed to WOW your audience. Includes business plan in Word and business plan financials in Excel. Simply fill in the blanks and print. Make your vision a reality! A Wise business plan Template includes everything needed to WOW your audience. Simply fill in the blanks and print. In addition, you can download our 300+ free business plan templates covering a range of industries.

Business Plan Writing Guide

Business plans can be challenging to write. However, with our “ how-to-write a business plan guide , ” you will surely be able to complete your plan. You can use these resources to learn what to include in your business plan and the types of language used in these professional documents.

Freelance Business Plan Writer

Business plan writers range from $79 to $149 an hour. Most projects will take a minimum of 20-30 hours for the business plan writer to complete.

Hiring A Professional Business Plan Consultant

You can hire a professional  business plan writer  to write your business plan. Some larger, more complex plans can run higher in price, depending on the type of project and the number of staff members involved. For simple projects, costs start at $2,000 and can go up to $20,000+ depending on the scope.

BANK BUSINESS PLANS

A Bank Business Plan includes every piece of the planning puzzle that a bank loan officer would need to see before signing off on the funding. This plan focuses on professionally developed financials to show the ability to repay a bank loan successfully.

Ideal for: Anyone seeking traditional bank funding or looking to secure a Small Business Administration (SBA) loan.

INVESTOR BUSINESS PLANS

An investor business plan will showcase Return on Investment (ROI) and offer a compelling description of the company’s leaders’ experience, commitment and business acumen. This plan seeks to instill confidence in investors while also getting them excited about your company. An investor business plan will show that the company has strong potential to reward those who invest while mitigating risk. 

Ideal for: Anyone looking to work with venture capitalists, angel investors or private investors that provide funding in return for equity in the company.

Bonus Tip: 5 Best Places to Find a Venture Capitalist

FRANCHISE BUSINESS PLANS

A franchise business plan will demonstrate how the location being funded is supported by the strength of the parent organization, while also demonstrating that the new location adds value to the over-arching company. Franchise business plans are a mix of information on the parent company and the franchise being funded. They place heavy emphasis on the market that would support the new location. 

Ideal for: Anyone looking to fund a franchise. This kind of business plan can also help make a case for a new franchise location to the parent company, increasing the chances that your location will be approved.

Bonus Tip: Discover how to buy a franchise with no money ?

STRATEGIC BUSINESS PLANS

A strategic business plan is a valuable tool for business builders, allowing them to prepare for the future by aligning their business goals with their market, industry predictions and plans for structuring the company as it grows. This kind of business plan is a true roadmap to success that can help a savvy business owner define and meet goals more quickly by staying one step ahead of growing pains and economic turbulence. The plan is also commonly used for Mergers & Acquisitions (M&A). 

Ideal for: Anyone who wants a goal-oriented strategy for growing a business quickly and strategically while minimizing distractions and dead-end side projects.

NONPROFIT (501 (C)(3) BUSINESS PLANS

Description: Rather than focusing on Return on Investment (ROI) or profit margins, a Nonprofit (501 (C)(3) business plan is created to demonstrate good stewardship of funds received in support of the company’s mission. As with any other business plan, a nonprofit plan will include goals and market needs assessments, along with financials, but the mission of the plan will be to show that those leading the nonprofit have the experience, knowledge and goals in place to manage funds received from any source.

Ideal for: Those looking to start a Nonprofit (501 (C)(3) organization.

FEASIBILITY STUDIES – Starting at $10,000

Understanding the viability of a business concept or project ahead of time saves time, money and stress. A professional feasibility study from Wise is like a window into the future of the client’s business.

Checkout our free business plan examples now!

Private placement memorandums (ppm) - – starting at $5,000.

A vital business document, a PPM is the key that opens the door to private investment transactions. Our writers work closely with business owners to ensure that each client’s Private Placement Memorandum is both compelling and compliant. 

IMMIGRATION BUSINESS PLANS

Description: The United States offers several different visa programs allowing immigrants with valuable business skills to enter and work in the United States (Read below to learn more about each type of visa.) Immigration business plans must show that the person seeking a visa and the company sponsoring the applicant or being created meets very strict government guidelines about required skills and job creation. 

Ideal for: Those looking to bring talent from another country to boost growth or those seeking to immigrate to the United States for the purpose of creating a business.

L-1 visa : An L-1 visa is a non-immigrant, short-term visa often used to allow company leaders or specialists to assist in specific initiatives. L-1 visas are available to employees of an international company with offices in both the United States and abroad.

E-2 visa : An E-2 visa is an investor visa that allows investors to enter and work in the United States to direct and control a substantial investment in the company. This is a renewable visa.  

EB-5 visa: An EB-5 visa allows investors to begin becoming a permanent United States resident. This visa requires an investment of at least $1,050,000 and the creation of at least ten jobs for American workers. In areas of high unemployment, the investment requirement drops to $800,000.

Hiring an Accounting or Law Firm

Are you looking to go public? Hiring a CPA or law firm to write your business plan may be a good option. Securities attorneys and CPAs will require a retainer to start your project. Most projects begin between $50,000 to $100,000 with an hourly rate of $250-$500, depending on how many people are working on the project and their skillsets. 

The cost of a business plan can vary depending on various factors such as the complexity of the business, the level of detail required, and the experience of the business plan writer. On average, a professionally written business plan can cost anywhere from a few hundred to several thousand dollars.

Yes, there are free and low-cost options available for creating a business plan. Many online platforms offer business plan templates and resources that can help you create a basic plan at no cost. However, if you require a more comprehensive and customized plan, hiring a professional writer or consultant may be necessary, which can come at a higher cost.

Several factors can influence the cost of a business plan, including the size and complexity of the business, the industry, the target audience (such as investors or lenders), the level of research and analysis required, and the timeframe for completion. Additional services such as market research, financial forecasting, and industry analysis can also impact the overall cost.

It depends on the specific needs and goals of your business. A professionally written business plan can provide valuable insights, help secure funding, and serve as a roadmap for your business. It can increase your chances of success and make a positive impression on investors or lenders. However, if you have the necessary knowledge and resources, you can also create a solid business plan on your own.

Assessing the importance and potential benefits of a business plan for your specific business is crucial in determining the right budget. Consider your business goals, the complexity of your business model, the amount of research and analysis required, and the level of expertise you need from a business plan writer. It’s recommended to research and compare costs from different sources to make an informed decision about your budget.

Thinking of writing a business plan? Hire our business writers now!

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Small Business Startup Costs Explained 

3 min. read

Updated March 4, 2024

What will it cost to start your business ? 

While every business is unique, there’s a common approach to helping you figure out what it’s going to take to get your business off the ground and sustain it as sales ramp up.

And, knowing the startup costs for your new business is critical before you launch. Underestimating the funds required could leave you without enough cash in the bank and heading towards failure before you even get started.

Read this guide and learn to calculate, manage, and minimize your startup costs. 

• What are startup costs?

Startup costs are what a business spends to get up and running before generating revenue. 

Starting costs vary based on business type but often include expenses like lease payments, permits, and market research. They can also include asset purchases such as vehicles, real estate, and equipment. Crucially, starting costs also include the money that you need to have in the bank to cover expenses as your business launches until your sales have grown enough to cover those expenses.

• Startup cost examples

Starting costs typically include expenses that occur before you start selling and major purchases, otherwise know as assets.

Startup expenses

• Permits and licenses
• Incorporation fees
• Logo design
• Website design
• Brochure and business card printing
• Down payment on rental property

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• Cash to cover operations until sales can cover expenses
• Improvements to your chosen location
• Vehicles used for business operations
• Intangible assets like trademarks, copyrights, and patents.
• Why calculate startup costs?

Knowing your initial costs and expenses improves your chances of launching successfully . It helps you:

Avoid unnecessary risks:

You can avoid unexpected financial pitfalls and make informed decisions by understanding potential expenses.

Start your financial plan :

It helps you budget and determine if you have adequate funds to launch and operate until you’re profitable.

Convince investors :

A detailed breakdown of startup costs can make your business more appealing to investors, as you’ll demonstrate thorough planning and financial acumen.

Improve decisions: 

With a clear view of costs, you can make decisions about pricing , scaling, and other critical areas more confidently.

• What are your startup costs?

Starting costs vary from business to business. So, how do you know your costs and, more importantly, how much money you need to cover them? 

Check out the following resources to answer those questions.

How to calculate your startup costs

Accurately estimate startup costs by accounting for expenses, assets, and cash.

3 Steps to Figure Out How Much Money You Need to Start a Business

How much cash will it take to start your business? Your total cash must go beyond startup costs and ensure you’re prepared to cover emergencies and initial growth.

How Much Should You Personally Cover for Startup Costs?

Before covering any business expenses, consider the impact on your personal finances. What’s the right amount? How will you pay yourself back? And are the rewards worth the risk?

• Tips for managing startup costs

Follow these steps to minimize unnecessary expenses and prioritize the right things.

How to reduce your startup costs

Keep your startup expenses in check and save money through proper planning, tracking, and exploring possible tax deductions.

Hidden startup costs you may overlook

It’s challenging to account for everything. Don’t let overlooked fees and expenses immediately throw off your budget.

What you won’t regret spending money on as a business owner

There is such a thing as being too frugal. But where should you invest more money? While it depends on your business, you can start with these recommendations from a seasoned entrepreneur.

Get the rest of your business finances in order

Knowing what it costs to start your business will make it far easier to get your finances in order.

Check out the rest of our startup financial resources to better understand your path to profitability.

• Create your financial plan
• Set up accounting and payroll
• Prepare for funding

One-page business plan template

A quick and easy way to list out your expenses and explore how they fit into your overall business.

Download Template

AI-powered revenue and expenses

Instantly generate possible revenue streams and expenses with the AI-powered LivePlan Assistant.

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

Table of Contents

• Get your business finances in order

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How Much Does Pet Insurance Cost? (2024)

Updated: Aug 8, 2024, 8:19am

• Compare Pet Insurance Quotes

Key takeaways:

• The average cost of pet insurance for a dog is $51 a month and $27 a month for a cat (for a policy with $5,000 of annual coverage, a $250 deductible and 80% reimbursement level).
• The factors that affect pet insurance costs are breed, age of pet, where you live and the amount of coverage you choose.
• Finding the best pet insurance can be done by comparing quotes and coverage.

Why You Can Trust Forbes Advisor Guides

We analyzed pet insurance rates from 18 companies to determine the costs for various pet age groups, breeds and states. Our editorial content is not influenced by advertisers. You can read more about our editorial guidelines and the methodology for the ratings below.

• 18 pet insurance companies evaluated
• More than 60,000 rates crunched
• 102 years of insurance experience on the editorial team

How Much Is Pet Insurance on Average?

The average pet insurance costs $51 per month for dogs and $27 per month for cats , based on our analysis. That’s for a policy with $5,000 of annual coverage, a $250 deductible and an 80% reimbursement level.

A policy with unlimited annual coverage, a $250 deductible and an 80% reimbursement level costs an average of $76 per month for dogs and $37 per month for cats.

Get the coverage your pet needs

Save big on tests, vaccines and essential care

Maximum annual coverage

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Average Cost of Pet Insurance for Dogs and Cats

How Much Is Pet Insurance for Dogs?

Pet insurance costs an average of $51 per month for a dog for $5,000 of annual coverage, based on our analysis. The average pet insurance cost for a dog is $73 per month for a policy with unlimited annual coverage. Dog owners can expect to pay anywhere from $25 to $150 per month for pet insurance , depending on the dog’s age, the amount of coverage and the insurance company.

Average Pet Insurance Cost by Dog Age

Average Cost of Dog Insurance by Company

ASPCA pet health insurance has the cheapest prices for dogs for both policies with $5,000 in annual coverage ($25 per month) and unlimited annual coverage ($35 per month). Pumpkin has the most expensive dog insurance for policies with $5,000 in annual coverage ($69 per month). Trupanion is the most expensive for unlimited annual coverage (averaging $150 per month).

Average Cost of Dog Insurance by Breed

Breed plays a major role in your dog insurance costs. Small mixed breed dogs are the cheapest to insure ($34 for policies with $5,000 annual coverage and $51 for policies with unlimited annual coverage) while Rottweilers are the most expensive  ($88 for policies with $5,000 annual coverage and $154 for unlimited annual coverage).

Average Dog Insurance Cost by State

Georgia and Texas are the cheapest states for dog insurance for $5,000 in annual coverage ($44 per month). Georgia is the cheapest state for unlimited annual coverage ($57 per month). Connecticut is the most expensive state for $5,000 in annual coverage ($62 per month) and Maryland is the most expensive state for unlimited annual coverage ($91 per month).

How Much Is Pet Insurance for Cats?

Pet insurance costs an average of $27 per month for a cat for a policy with $5,000 of annual coverage, a $250 deductible and an 80% reimbursement level. A policy with unlimited annual coverage, a $250 deductible and an 80% reimbursement level costs $37 per month.

The insurer and age of the cat influence how much you will pay. Cat owners can expect to pay anywhere from $14 to $65 per month for pet insurance, depending on the cat’s age, the amount of coverage and the insurance company.

Average Pet Insurance Cost by Cat Age

Average cost of cat insurance by company.

ASPCA pet health insurance has the cheapest prices for cats for both policies with $5,000 in annual coverage ($14 per month) and unlimited annual coverage ($20 per month). Pumpkin has the most expensive cat insurance for policies with $5,000 in annual coverage ($38 per month). Trupanion is the most expensive for unlimited annual coverage ($65 per month).

Average Cost of Cat Insurance Cost by Breed

A cat’s breed plays a major role in pet insurance costs. Mixed breed cats are the cheapest breeds to insure ($24 per month for policies with $5,000 annual coverage and $34 per month for policies with unlimited annual coverage) while Maine Coons are the most expensive cats to insure ($30 per month for policies with $5,000 annual coverage and $45 per month for policies with unlimited annual coverage).

Average Cat Insurance Cost by State

Indiana and Texas are the cheapest states for cat insurance for $5,000 in annual coverage ($23 per month). Georgia is the cheapest state for unlimited annual coverage ($29 per month). Connecticut is the most expensive state for $5,000 in annual coverage ($33 per month) and unlimited annual coverage ($45 per month).

Average Cost of Veterinary Care and Medical Treatments for Cats and Dogs

The average vet visit cost is $70, according to a Forbes Advisor analysis of veterinarian costs. But your vet bills could quickly add up depending on the types of services your pet needs, including vaccinations or treatments for accidents and illnesses. Here’s a look at the average cost of a veterinary visit in different states.

Cost of Veterinary Care by State

Average Cost of Medical Treatments for Cats and Dogs

The average cost of a pet’s medical treatment can be thousands of dollars, depending on the problem, according to Forbes Advisor’s analysis of vet visit costs .

7 Factors That Impact Pet Insurance Prices

Pet insurance companies use multiple factors when setting rates.

1. Coverage Type

One of the biggest factors determining pet insurance cost is the coverage. For example, a comprehensive policy that covers a range of treatments and also routine care will cost more than an accident-only policy.

Your coverage choices depend on the pet insurance company. Here are the common types of pet insurance plans:

• Comprehensive pet insurance plan. A comprehensive pet insurance plan will combine an accident and illness policy with a routine care plan.
• Accident and illness coverage. This type of policy helps pay for vet bills for unexpected incidents, such as sprains from accidents, poisonings and common illnesses, such as ear infections. This might also cover lab tests, surgeries, hospitalization, prescription medications and emergency care.
• Accident-only coverage. This type of policy covers certain medical expenses if your pet suffers an accident, such as a broken bone. Coverage might include diagnostic tests, surgeries, X-rays, hospitalization, prescription medications and emergency care.
• Routine wellness plans. This type of policy covers medical expenses for wellness exams, flea and heartworm prevention, vaccinations and other routine annual care. These plans are typically add-ons.

2. Deductibles

A deductible is the amount of money you pay out of pocket every year to a veterinarian before coverage starts. You can typically choose a pet insurance deductible that ranges from $0 to $1,000.

The higher your deductible amount, the less you pay in pet insurance costs.

3. Reimbursement Levels

Pet insurance policies are reimbursement-based, meaning you usually have to pay up front for your pet’s medical bills and submit a claim to the pet insurance company.

Once you meet the deductible for your plan by paying out-of-pocket, coverage kicks in at the level outlined in the plan. You can typically choose reimbursement options of 70%, 80% or 90% of the pet medical expenses that are covered by the plan.

Pet insurance costs are higher for better levels of reimbursement.

For example, say you have a pet insurance plan with a $500 deductible and 80% reimbursement level:

• If the pet has a medical procedure that costs $1,500 and it’s your first claim of the policy period, you would first pay $1,500 to the vet.
• The first $500 of that is your deductible.
• Then you’d be reimbursed 80% of the remaining $1,000, for a reimbursement of $800.

4. Pet’s Breed

Your pet’s breed is a factor in determining pet insurance costs. That’s because some breeds are predisposed to illnesses, which typically translates to more veterinary visits and higher medical bills. For example, some larger breeds of dogs are more susceptible to heart and hip issues.

In our analysis of filings by pet insurers to state regulators, we found many pricing levels based on dog breeds but little variation for cats.

Cats are cheaper to insure than dogs. And birds, reptiles, rabbits and ferrets cost less to insure than cats.

5. Age of Pet

A pet’s age is another piece of the pet insurance cost puzzle. As your pet gets older, the chances of illness and injury increase, which results in higher pet insurance costs. We analyzed age rating factors for a Veterinary Pet Insurance Co. policy and found that the best prices were after a pet’s first birthday until around age six. By the pet’s ninth birthday, you can expect its age rating factor to more than double.

6. Location

Where you live and the local cost of veterinary care will affect pet insurance costs. For instance, pet owners in urban areas may pay more for pet insurance due to higher average vet costs.

7. Discounts

Pet insurance companies sometimes offer discounts such as:

• Multi-pet discount
• Bundling multiple policies like pet and home insurance
• Membership in organizations such as AARP
• Military member
• Annual pay discount

Pet Insurance Discounts by Provider

What Is the Cheapest Pet Insurance?

Pets Best, Fetch and Lemonade offer the best cheap pet insurance, based on our analysis of 10 policies.

• How Does Pet Insurance Work?

Pet insurance is generally reimbursement-based. You’ll pay up front for your pet’s vet expenses and submit a claim for reimbursement. Unlike health insurance, veterinarians aren’t in a provider network, so you can take your pet to any licensed veterinarian.

Here’s an example of a typical pet insurance claim:

• You take your dog to the vet for a problem, such as a skin infection.
• You pay the veterinarian bill.
• You submit a pet insurance claim to your pet insurance company. The claim should include a copy of the vet’s invoice and the dog’s medical record.
• The pet insurance company reviews the claim. If the problem is covered by your policy, the insurer will send you reimbursement.

How much you are reimbursed will depend on your policy’s reimbursement level. Many pet insurance companies allow you to choose a reimbursement level. Common reimbursement levels are 70%, 80% and 90%.

What pet insurance covers will depend on the type of plan you purchase. Review a plan’s benefits, coverage types and limits before buying to make sure it fits your needs.

• Is Pet Insurance Worth It?

If you can’t afford to pay for a large unexpected vet bill out of pocket, pet insurance is worth it for the financial safety net it provides.

You can also buy add-on plans that help cover expenses for wellness and preventive care.

You may instead decide to set money aside for your pet’s care. But an unforeseen vet bill could set you back thousands of dollars. For example, the average cost to treat an ingested foreign object for a dog is $5,106, according to Forbes Advisor’s analysis of vet visit costs.

Methodology

We used data from Forbes Advisor research. Rates are based on dogs and cats of various ages and breeds. We collected rates for two different types of plans, where available.

• $5,000 in annual coverage, $250 deductible, 80% reimbursement level
• Unlimited annual coverage, $250 deductible, 80% reimbursement level

For pet insurers that did not have these coverage profiles, we substituted the following:

• ASPCA: Does not offer unlimited annual coverage. Rates are based on $10,000 of annual coverage.
• Chewy: Does not offer $5,000 of annual coverage, rates are based on $20,000 of annual coverage through the Value plan. Rates for unlimited annual coverage are based on the Essential Plus with a $250 deductible and 90% reimbursement level.
• Felix: Available only for cats. Rates for $5,000 of annual coverage are based on the Cats Plus plan. Rates for unlimited annual coverage are based on the Cat Fancy plan with $10,000 of annual coverage.
• Fetch: Does not offer unlimited annual coverage, rates are based on $15,000 of annual coverage. We used a $300 deductible in states where a $250 deductible was not available.
• Healthy Paws: $750 for dogs and 70% reimbursement level in several states. Healthy Paws only offers unlimited annual coverage.
• Lemonade: Does not offer unlimited annual coverage, rates are based on $100,000 of annual coverage.
• ManyPets: $500 deductible for dogs and cats in several states.
• MetLife: Does not offer unlimited annual coverage. Rates are based on $10,000 annual coverage.
• Prudent Pet: The Essential plan does not offer $5,000 of annual coverage, rates are based on $10,000 of annual coverage. Unlimited annual coverage is based on quotes from the Ultimate plan.
• Pumpkin: Does not offer $5,000 in annual coverage. Rates are based on $10,000 annual coverage. Rates for unlimited annual coverage are based on a $250 deductible and 90% reimbursement level.
• Trupanion: Rates are based on a 90% reimbursement level. Trupanion only offers unlimited annual coverage.

Compare 10+ Leading Pet Insurers In Minutes

Pet insurance cost frequently asked questions (faqs), will pet insurance offset the average cost of medical treatments.

Pet insurance plans will pay for many types of treatment and some pay for the cost of a vet visit , but whether you come out ahead will depend on how much you’ve been paying in premiums vs. how much you get back in claims. It will also depend on your deductible and reimbursement percentage.

Do dogs really need insurance?

Medical bills for dogs can quickly add up if they are injured or fall ill. Pet insurance can be a good way to cover unexpected health care costs that pop up.

When considering if your dog needs pet insurance, run the numbers. Estimate the cost of veterinary services for medical issues that could arise and get quotes for pet insurance for your specific dog. You may find a cheap pet insurance plan is your best bet or instead decide to put money aside in a savings account for potential medical costs.

Does pet insurance cost increase with age?

Pet insurance costs typically increase with a pet’s age. Older pets are more likely to fall ill or be injured, so pet insurance companies raise rates as a pet ages. Your costs will usually go up at renewal time. You may be able to find a better price by comparing pet insurance quotes among several different insurers.

Are pet vaccinations covered by pet insurance?

Pet vaccinations are not typically covered by pet insurance. But some insurers offer an optional wellness plan that you can add to an accident and illness policy to help cover the cost of vaccinations .

For example, the Wellness Rewards plan from Embrace pet insurance will reimburse you the cost of preventative care, including vaccinations, up to the reimbursement amount that you select.

Can pet insurance be used at any veterinarian?

Pet insurance companies typically reimburse you for bills from any licensed vet. This includes emergency visits and hospitalizations.

Can you get pet insurance for birds, reptiles or other exotic pets?

Most pet insurers limit coverage to dogs and cats, but you can get exotic pet insurance through Nationwide for pets such as amphibians, birds, fish, reptiles and small mammals such as rabbits and chinchillas. Nationwide’s exotic pet insurance plan covers accidents and illnesses, such as broken bones, poisoning, feather loss and internal parasites.

Get Forbes Advisor’s ratings of the best insurance companies and helpful information on how to find the best travel, auto, home, health, life, pet, and small business coverage for your needs.

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Find Out The Cost Of Pet Insurance For Your Pet

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As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others make well-informed decisions.

The independent source for health policy research, polling, and news.

Medicare Advantage in 2024: Premiums, Out-of-Pocket Limits, Supplemental Benefits, and Prior Authorization

Meredith Freed , Jeannie Fuglesten Biniek , Anthony Damico, and Tricia Neuman Published: Aug 08, 2024

People with Medicare have the option of receiving their Medicare benefits through the traditional Medicare program administered by the federal government or through a private Medicare Advantage plan , such as an HMO or PPO. In Medicare Advantage, the federal government contracts with private insurers to provide Medicare benefits to enrollees. Medicare pays insurers a set amount per enrollee per month, which varies depending on the county in which the plan is located, the health status of the plan’s enrollees, and the plan’s estimated costs of covering Medicare Part A and Part B services.

The plans use these payments to pay for Medicare-covered services, and in most cases, also pay for supplemental benefits, reduced cost sharing and lower out-of-pocket limits, which are attractive to enrollees. Plans are able to offer these additional benefits, often without charging an additional premium for Part D prescription drugs or supplemental benefits, because they receive an additional $2,329 per enrollee above their estimated costs of providing Medicare-covered services. This portion of plan payments, also called the rebate, has increased substantially in the last several years, more than doubling since 2018. At the same time, Medicare Advantage plans can use cost management tools, such as prior authorization requirements, which can impose barriers to receiving care, and limited networks of providers, which can restrict beneficiary choice of physicians and hospitals. More than half (56%) of Medicare Advantage beneficiaries are enrolled in HMO plans that typically do not cover out-of-network services.

This brief provides information about Medicare Advantage plans in 2024, including premiums, out-of-pocket limits, supplemental benefits, and prior authorization, as well as trends over time. A companion analysis examines trends in Medicare Advantage enrollment.

While data on Medicare Advantage plan availability, enrollment and plan offerings is robust, the same cannot be said about service utilization (especially for supplemental benefits) and out-of-pocket spending patterns (though some of this data is starting to be collected), which would allow assessment of how well the program is meeting its goals in terms of value and quality and help Medicare beneficiaries compare coverage options. As enrollment in Medicare Advantage and federal payments to private plans continue to grow, greater transparency and more comprehensive information will become increasingly relevant for people with Medicare program oversight.

Highlights for 2024:

• In 2024, three quarters (75%) of enrollees in individual Medicare Advantage plans with prescription drug coverage pay no premium other than the Medicare Part B premium , which is a big selling point for beneficiaries, particularly those living on modest incomes and savings .
• Most Medicare Advantage enrollees are in plans that offer supplemental benefits not covered by traditional Medicare, such as vision, hearing and dental . From 2023 to 2024, Medicare Advantage enrollees overall did not experience a significant loss in benefits despite concerns that changes in Medicare Advantage payment would lead to a drastic reduction in benefits or increase in premiums, though there were small declines in the share of enrollees in plans with access to some benefits from 2023 to 2024.
• Nearly all Medicare Advantage enrollees (99%) are in plans that require prior authorization for some services , which is generally not used in traditional Medicare. Prior authorization is most often required for relatively expensive services, such as skilled nursing facility stays (99%), Part B drugs (98%), inpatient hospital stays (acute: 98%; psychiatric: 93%) and outpatient psychiatric services (82%) and is rarely required for preventive services (6%).

In 2024, three quarters of Medicare Advantage enrollees (75%) are in plans with no supplemental premium (other than the Part B premium)

In 2024, most people (75%) enrolled in individual Medicare Advantage plans with prescription drug coverage (MA-PDs) pay no premium other than the Medicare Part B premium ($174.70 in 2024) (Figure 1). The MA-PD premium includes both the cost of Medicare-covered Part A and Part B benefits and Part D prescription drug coverage. In 2024, 97% of Medicare Advantage enrollees in individual plans open for general enrollment are in plans that offer prescription drug coverage.

Altogether, including those who do not pay a premium, the average enrollment-weighted premium in 2024 is $14 per month, and averages $9 per month for just the Part D portion of covered benefits, substantially lower than the average premium of $43 for stand-alone prescription drug plans (PDP) in 2024. Higher average PDP premiums compared to the MA-PD drug portion of premiums is due in part to the ability of MA-PD sponsors to use rebate dollars from Medicare payments to lower their Part D premiums. When a plan’s estimated costs for Medicare-covered services are below the maximum amount the federal government will pay private plans in an area (known as the benchmark), the plan retains a portion of the difference, known as the “rebate”. According to the Medicare Payment Advisory Commission (MedPAC), rebates average over $2,300 per enrollee in 2024 .

For the remaining 25% of beneficiaries who are in plans with a MA-PD premium (5.0 million), the average premium is $56 per month, and averages $36 for the Part D portion of covered benefits.

Premiums paid by Medicare Advantage enrollees have declined since 2015.

Average MA-PD premiums have declined from $36 per month in 2015 to $14 per month in 2024. Average MA-PD premiums have declined markedly for local PPOs, declining from $65 per month in 2015 to $16 per month in 2024. Premiums for HMOs have also declined steadily from $28 per month in 2015 to $12 per month in 2024. Only regional PPOs, which represent a very small and declining share of enrollment, have seen an increase in plan premiums over this time from $36 per month in 2015 to $55 per month in 2024. Nearly 6 in 10 Medicare Advantage enrollees are in HMOs (56%), 43% are in local PPOs, and 1% are in regional PPOs in 2024. The reduction for nearly all plans is driven in part by the decline in premiums for local PPOs and HMOs, that account for a rising share of enrollment over this time period, as well as the increase in rebates paid by Medicare to these plans.

Since 2015, a rising share of plans estimate that their cost of providing Medicare Part A and Part B services (the “bid”) is below the maximum amount that CMS will pay in the area where the plan operates (the “benchmark”). The difference between bids and benchmarks enables plans to offer coverage that typically includes extra benefits without charging an additional premium. As plan bids have declined, the rebate portion of plan payments has increased, and plans are allocating some of those rebate dollars to lower the part D portion of the MA-PD premium. According to MedPAC , rebates have increased from an average of about $900 per enrollee in 2015 to over $2,300 per enrollee in 2024. This trend contributes to greater availability of zero-premium plans, which brings down average premiums.

The average out-of-pocket limit for Medicare Advantage enrollees is $4,882 for in-network services and $8,707 for both in-network and out-of-network services (PPOs).

Since 2011, federal regulation has required Medicare Advantage plans to provide an out-of-pocket limit for services covered under Parts A and B. In contrast, traditional Medicare does not have an out-of-pocket limit for covered services.

In 2024, the out-of-pocket limit for Medicare Advantage plans may not exceed $8,850 for in-network services and $13,300 for in-network and out-of-network services combined. These out-of-pocket limits apply to Part A and B services only, and do not apply to Part D spending. Due to a provision in the Inflation Reduction Act, there is a cap in Part D spending of around $3,300 in 2024 , and in 2025, Medicare beneficiaries will pay  no more than $2,000  out of pocket for prescription drugs covered under Part D.

HMOs generally only cover services provided by in-network providers so typically do not have a limit for out-of-network services. However, about 5 million Medicare Advantage enrollees are in HMOs that are Point-of-Service plans (HMOPOS), which allow out-of-network care for certain services, though they typically cost more than services received in-network. PPOs also cover services delivered by out-of-network providers but charge enrollees higher cost sharing for this care. The size of Medicare Advantage provider networks for  physicians  and  hospitals  vary greatly both across counties and across plans in the same county.

In 2024, the enrollment-weighted average for out-of-pocket limits for Medicare Advantage enrollees is $4,882 for in-network services and $8,707 for in-network and out-of-network services combined. For enrollees in HMOs, the average out-of-pocket (in-network) limit is $3,965 (Figure 3). Enrollees in HMOs are generally responsible for 100% of costs incurred for out-of-network care. For local and regional PPO enrollees, the average out-of-pocket limit for both in-network and out-of-network services is $8,634, and $10,728, respectively.

The average out-of-pocket limit for in-network services has generally trended down from 2017 ($5,297), though increased slightly from $4,835 in 2023 to 4,882 to 2024. The average combined in- and out-of-network limit for PPOs slightly increased from $8,659 in 2023 to $8,707 in 2024.

Most Medicare Advantage enrollees, including enrollees in special needs plans (SNPs), are in plans that offer some benefits not covered by traditional Medicare in 2024

Virtually all enrollees in individual Medicare Advantage plans (those generally available to Medicare beneficiaries) are in plans that offer primarily health related supplemental benefits including eye exams and/or glasses  (more than 99%),  dental care  (98%) hearing exams and/or aids (96%), and a fitness benefit (95%) (Figure 4). Similarly, most enrollees in SNPs are in plans that offer these benefits. However, benefits such as Part B drug rebate are less common for enrollees in both individual plans (12%) and SNPs (7%). This analysis excludes employer-group health plans because employer plans do not submit bids, and available data on supplemental benefits may not be reflective of what employer plans actually offer.

Though these benefits are widely available, the scope of specific services varies. For example,  a dental benefit  may include preventive services only, such as cleanings or x-rays, or more comprehensive coverage, such as crowns or dentures. Plans also vary in terms of cost sharing for various services and limits on the number of services covered per year, many impose an annual dollar cap on the amount the plan will pay toward covered service, and some have networks of dental providers beneficiaries must choose from.

Enrollees in SNPs have greater access than other Medicare Advantage enrollees to transportation (91% vs 36%), meal benefits (85% vs 74%), bathroom safety devices (49% vs 31%), and in-home support services (23% vs 9%). However, as noted above, it is not known what share of enrollees have used these benefits because data are not yet available.

As of 2020, Medicare Advantage plans have been allowed to include telehealth benefits as part of the basic Medicare Part A and B benefit package –  beyond what was allowed under traditional Medicare prior to the public health emergency , and was extended to December 2024. Therefore, these benefits are not included in the figure above because their cost is not covered by either rebates or supplemental premiums. Medicare Advantage plans may also offer supplemental telehealth benefits via remote access technologies and/or telemonitoring services, which can be used for those services that do not meet the requirements for coverage under traditional Medicare or the requirements for additional telehealth benefits (such as the requirement of being covered by Medicare Part B when provided in-person). The majority of enrollees in both individual plans and SNPs are in plans that offer remote access technologies (72% and 78%, respectively), but just 4% of enrollees in individual plans and 1% of enrollees in SNPs have access to telemonitoring services.

Nearly all Medicare Advantage enrollees are in plans that offer vision, dental, and hearing benefits, similar to 2023, with the share of enrollees in plans that offer many benefits increasing substantially since 2015.

In 2024, there were modest changes to the share of enrollees in plans that offer specific benefits compared to 2023. Similar shares of enrollees in individual plans are in plans that offer eye exams and/or eyeglasses (100% in 2023 and 2024), dental benefits (98% in 2023 and 2024), and hearing exams and/or aids (99% in 2023 vs 96% in 2024) (Figure 5). Smaller shares of enrollees are in plans that offer transportation benefits (44% in 2023 vs 36% in 2024) while a larger share of enrollees is in plans that offer bathroom safety devices (10% in 2023 vs 31% in 2024).

For those in Special Needs Plans, similar shares of enrollees are in plans that offer eye exams and/or eyeglasses (97% in 2023 vs 98% in 2024), dental benefits (95% in 2023 and 2024), and hearing exams and/or aids (92% in 2023 vs 93% in 2024). Larger shares of SNP enrollees are in plans that offer over the counter benefits (84% in 2023 vs 96% in 2024) and bathroom safety devices (15% in 2023 vs 49% in 2024).

Overall, Medicare Advantage enrollees have not experienced a significant loss in benefits despite concerns that changes in Medicare Advantage payment would lead to a drastic reduction in benefits or increase in premiums. While the share enrolled in plans that offer benefits appears to have remained mostly stable from 2023 to 2024 and has increased substantially from 2015 for many benefits, this analysis does not account for any changes to the design of benefits, which could be less robust, even if the benefits are still offered by the plan, such as restrictions on eligibility for these benefits, narrower networks of providers or less comprehensive coverage.

Enrollees in SNPs are more likely to be in plans that offer Special Supplemental Benefits for the Chronically Ill (SSBCI) than other Medicare Advantage enrollees.

Beginning in 2020, Medicare Advantage plans have also been able to offer supplemental benefits that are not primarily health related for chronically ill beneficiaries, known as Special Supplemental Benefits for the Chronically Ill (SSBCI). In addition, Medicare Advantage plans participating in the Value-Based Insurance Design Model may also offer these non-primarily health related supplemental benefits to their enrollees, but can use different eligibility criteria than required for SSBCI, including offering them based on an enrollee’s socioeconomic status (e.g., LIS eligibility ) or whether the enrollee lives in an underserved area.

The vast majority of individual plan enrollees and about half of SNP Medicare Advantage enrollees are in plans that do not offer these benefits. However, while the share in plans that are offered these benefits varies widely, this often translates to a similar number of enrollees. For example, the share of Medicare Advantage enrollees who are offered SSBCI benefits in 2024 is highest for food and produce – 15% for individual plans or about 3.1 million enrollees, while 49% of SNP enrollees are offered these benefits, or about 3.3 million enrollees (Figure 6).

The other SSBCI benefits that are most commonly offered are general supports for living (e.g., housing, utilities) (10% in individual plans and 43% for SNPs) and transportation for non-medical needs (9% for individual plans and 29% for SNPs). A similar share of enrollees in individual plans (5%) are offered pest control, a social needs benefit (e.g., community programs), and meals beyond a limited basis though the share of enrollees in SNPs who have access to these benefits is higher (17%, 15%, and 12%, respectively). Smaller shares of enrollees are in plans that offer indoor air quality equipment and services (e.g., air conditioning units) (4% in individual plans and 12% for SNPs), services supporting self-direction (e.g., power of attorney for health services, financial literacy classes) (3% in individual plans and 12% for SNPs), complementary therapies (those offered alongside traditional medical treatment) (3% in individual plans and 12% for SNPs) and structural home modifications (0.02% for individual plans and 1% for SNPs).

In addition to the 10 initially enumerated examples of SSBCI provided by CMS , plans are also able to offer “other” extra benefits specified by the plan, including pet care/service animal supplies (5% in individual plans and 18% for SNPs) and personal care (2% in individual plans and 9% for SNPs)(Figure 6). About 2% of SNP enrollees are in plans that offer roadside and travel assistance and home cleaning (less than 1% in individual plans), and less than 1% are in SNPs or individual plans that offer hairstyling and beauty care (data not shown), though this is not an exhaustive list of additional benefits plans may offer.

While the share of enrollees with plans that offer some SSBCI benefits has increased since 2021, such as food and produce, growth for other benefits has been much slower.

Though the share of SNP enrollees in plans with food and produce benefits, general supports for living benefits, and transportation for non-medical needs has grown considerably since 2021, the share of enrollment in plans for other SSBCI benefits has grown much more slowly, particularly for enrollees in individual plans (Figure 7). For example, the share of SNP Medicare Advantage enrollees with food and produce benefits in SNPs has more than doubled from 21% in 2021 to 49% in 2024, while for individual plans, the share of enrollees with these benefits has also doubled, but only from 7% to 15%. For general supports for living benefits, the share of SNP Medicare Advantage enrollees with these benefits has more than quadrupled from 10% to 43%, while for individual plans, the share has more than tripled, but only from 3% to 10%.

Like for other supplemental benefits, the scope of services for SSBCI benefits varies. For example, many plans offer a specified dollar amount that enrollees can use toward a variety of benefits, such as food and produce, utility bills, rent assistance, and transportation for non-medical needs, among others. This dollar amount is often loaded onto a flex card or spending card that can be used at participating stores and retailers, which can vary depending on the vendor administering the benefit. Depending on the plan, this may be a monthly allowance that expires at the end of each month or rolls over month to month until the end of the year, when any unused amount expires.

Nearly all Medicare Advantage enrollees are in plans that require prior authorization for many higher-cost services

Medicare Advantage plans can require enrollees to receive prior authorization before a service will be covered, and nearly all Medicare Advantage enrollees (99%) are in plans that require prior authorization for some services in 2024 (Figure 8). Prior authorization is most often required for relatively expensive services, such as skilled nursing facility stays (99%), Part B drugs (98%), inpatient hospital stays (acute: 98%; psychiatric: 93%) and outpatient psychiatric services (82%) and is rarely required for preventive services (6%). Prior authorization is also required for the majority of enrollees for some extra benefits (in plans that offer these benefits), including comprehensive dental services, and hearing and eye exams. The number of enrollees in plans that require prior authorization for one or more services stayed around the same from 2023 to 2024. In contrast to Medicare Advantage plans, traditional Medicare does not generally require prior authorization for services and does not require step therapy for Part B drugs.

Meredith Freed, Jeannie Fuglesten Biniek, and Tricia Neuman are with KFF. Anthony Damico is an independent consultant.

• Medicare Advantage

news release

• Medicare Advantage Plans Denied a Larger Share of Prior Authorization Requests in 2022 Than in Prior Years

Also of Interest

• Medicare Advantage in 2024: Enrollment Update and Key Trends
• Medicare Advantage 2024 Spotlight: First Look
• Use of Prior Authorization in Medicare Advantage Exceeded 46 Million Requests in 2022

Factors Influencing Motorcycle Insurance Rates

Average cost of motorcycle insurance by state, how to save money on motorcycle insurance.

• Additional Factors to Consider

How Much is Motorcycle Insurance?

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• The average cost of motorcycle insurance for a standard bike is $108 per month or $1,296 per year.
• Premiums are affected by factors like the type of motorcycle, age, experience, location, and policy.
• Compare motorcycle insurance policies to find the best rates on the coverages you need.

The cost of a liability-only motorcycle insurance policy for the standard bike is $68 per month or $816 per year. The cost of a full coverage policy is $148 per month or $1,776 per year, but your personalized quote varies based on individual factors. 

Understanding costs before purchasing motorcycle insurance is important for several reasons. First, it allows you to effectively fit this expense into your budget. Second, knowing the standard rates for your profile helps you discover the most competitive rates in the market and save money on insurance. Thirdly, knowing average rates prevent overpaying for insurance based on your risk profile and the coverages you need.

Take a look below for some of the factors affecting motorcycle insurance rates.

Type of Motorcycle

The type of bike you plan to ride also significantly impact how much you'll pay. The value of your bike, the safety features, the crash rate for that model, and the theft rate are factors considered when determining your premium.

Rider's Age and Experience

Like auto insurance, motorcycle insurance for young riders and less experience tends to be more expensive. For instance, 18-year-old drivers with one year of experience usually have higher rates than someone in their 30s with ten years.

Location and Riding Habits

Your location and riding habits heavily influence the cost of motorcycle insurance. For example, drivers in urban areas generally experience elevated rates of accidents and crime. As a result, they'll see increased insurance rates.  

Your riding habits also impact your insurance premiums. Those with a history of reckless driving, (i.e., speeding tickets, at fault accidents, and DUI) pay more for insurance than those with a clean driving record. 

Coverage Options and Limits

The Insurance Information Institute mentions several coverages that motorcycle insurance providers offer: 

• Liability insurance: This coverage that pays for damage you do to others' property or any injuries. Most states require you to carry at least a liability policy to ride on the road.
• Collision insurance : This coverage pays for damages to your motorcycle if you collide with another vehicle or object.
• Comprehensive coverage : This coverage pays for non-collision-related damages, like theft or vandalism.
• Coverage for motorcycle modifications, parts, and accessories: Some insurance policies will cover riding gear (like jackets and helmets), and other types of coverage will pay to repair and replace accessories like trailers, sidecars, or upgraded parts.
• Underinsured or uninsured motorist coverage: This policy will reimburse you when an underinsured or uninsured driver damages your bike or injures you.

Deductibles

Your deductible (what you pay before your insurer disburses your claim) directly impacts your premium. A higher deductible results in lower premiums, but you'll pay more out of pocket if you need to file a claim. 

Comparison of State Rates

As mentioned, the cost of car insurance changes based on your location. The table illustrates the average cost of motorcycle insurance by state.

Source: Insurify

High-Cost vs. Low-Cost States

Some states are more expensive than others for motorcycle insurance coverage. For example, New York has the highest car insurance cost at $305 per month. Meanwhile, Georgia has the lowest at $75 per month. Like car insurance, state laws and risk factors in your area affect how much your motorcycle insurance costs.

Below are some strategies to find the most affordable motorcycle insurance options.

Choosing the Right Coverage

Choosing the right amount of coverage ensures you're not underinsured. It is also one of the ways to save on motorcycle insurance as it prevents paying for coverages you don't need.

When choosing the right coverage, start by considering your state's minimum insurance requirements. You can usually find the most updated information on your state's DMV or insurance department website. Your insurance agent or broker should also be able to help you with this. Remember, the more coverage your state requires, the higher your insurance cost will be. 

Then you'll want to assess coverage needs. If you frequently ride your bike or own a new or high-valued, consider full-coverage insurance. If you have a modified bike, custom parts coverage insures your modifications.  If you live in an area with all four seasons, consider seasonal motorcycle insurance to lower your premiums during the winter months when you're not riding.

Check out our guide to the best and cheapest motorcycle insurance providers to find the right coverage for you.

Taking Safety Courses

Even if you've been riding for years, brushing up on your riding knowledge is never a bad thing. Many insurers offer a discount for taking a motorcycle safety class within the past five years.

Bundling Insurance Policies

With the multi-policy discount , It's usually cheaper (though not always) to buy your policy with the same company then buy them separately at different companies. This is because of the multi-policy discount. Policygenius states that policyholders save up to 20% when bundling their car and motorcycle policy. You can also bundle your policy with other products like home or renters insurance.

Maintaining a Clean Riding Record

Insurers offer discounted rates to those with a claims and accident-free record, as you're less likely to file a claim. If you have a moving infraction, consider taking an approved safety course to lower your premiums and improve motorcycle safety. 

Comparing Motorcycle Insurance Quotes

Each company considers calculates and prices your policy differently. So, like any other type of insurance, shop around to find the best rates on the coverage you need. A good practice is to obtain quotes from several motorcycle insurers at least once a year to see which company offers you the most coverage for the lowest premiums and deductibles.

Additional Motorcycle Insurance Factors to Consider 

Seasonal riding .

In some areas, riders may only want coverage for a limited riding season. This does not kick in automatically. However, you can reduce your coverage in the off-season to cover comprehensive, but not necessarily collision among other things. If you're going to make this move, read your policy carefully as even one ride in the off-season could put you at risk of damages that aren't covered.

Impact of Customizations and Accessories

Similarly, consider any upgrades or customizations. Brands like Harley Davidson customize your bike to your preferences long before you see it. But your insurance will cover the base model only unless you purchase extra coverage for customizations.

Usage-Based Insurance Programs

Usage-based programs track your driving via your smartphone, GPS, or other technology. There are two types of usage based programs.

Driving-based usage programs monitor your driving habits like how fast your ride, how harshly you brake, and the time of day you ride. You typically receive a higher discount on your policy or rewards at participating brands based on how well you ride.

Pay-per-mile insurance also uses telematics data to track your mileage. This program allows riders who use their bike occasionally to save money on insurance by only paying for coverage when you ride. 

Motorcycle Insurance Average Cost FAQ

The average cost of motorcycle insurance is $108 per month or $1,296 per year. Your exact premium varies based on individual factors, your coverage needs, and the company you purchase a policy with.

Lower your premium by opting for higher deductibles, maintaining a clean riding record, taking safety courses, and bundling policies.

The type of motorcycle does affect your insurance rates. Sports bikes generally have higher insurance rates compared to cruisers or touring bikes due to their higher risk profile.

Many insurers offer discounts for motorcycle insurance. Some examples include discounts for safety course completion, multi-policy bundling, and good riding records.

Motorcycle insurance is mandatory in most states. Check your state's DMV or insurance department website for the most up-to-date requirements information.

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