online business planning importance

• Search Search Please fill out this field.

Market Research

Business planning, website development, product or service selection, marketing and promotion, is it a good idea to start an online business, can i start an online business with $100, what are different types of online marketing strategies, the bottom line.

• Small Business
• How to Start a Business

Starting an Online Business: A Step-by-Step Guide

Crafting a Winning Business Plan: Setting Goals and Strategies

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

If you want to get into the online business game, it’s a good time to start. The COVID-19 pandemic reshaped online consumer spending, including how people shop online and how they research products.

Today, 76% of Americans buy products online. Furthermore, roughly a third of people purchase items online weekly. From setting up an ecommerce business to offering web design services, there are countless avenues to explore as an entrepreneur.

Below, we’ll walk through each step to building an online business.

Key Takeaways

• When starting an online business, comprehensive market research is critical for identifying your target audience and learning how to resonate with your customers and understand their needs.
• Creating a business plan is an important step for outlining your business goals. It also includes your product description, target market, and financial projections, among other core components.
• Building your website involves setting up a domain name, finding a hosting company, and designing a strong website with consistent branding that allows your customers to navigate it intuitively.
• Choosing the right product or service to sell is essential. It’s important to think about how you’re addressing an unmet need.
• Several digital marketing strategies can be utilized, from content marketing to paid advertising, to help your business grow.

Successful online entrepreneurs study hard in order to have a thorough understanding of their market. This is important for knowing exactly how to reach your target market , because these are the people who will buy your products and drive your business growth.

At its core, market research is about understanding your customers’ needs, pain points, and solutions. It is designed to help your business better meet these needs.

Steps to Conduct Market Research

Market research involves understanding key aspects of your current and future customers. To get a clear sense of your target market, outline the characteristics of your audience—for example, age, location, gender, income, job title, and key pain points.

Once you have identified your target audience, conduct research on the following topics, which will tell you about how they make decisions and how you can better position your business:

• What are the challenges that your target market faces?
• Where do they research a given product or service?
• What are their views on pricing for this product or service?
• What factors influence their decision to make a purchase?
• Who are your competitors?

To put this market research into action, there are a number of different avenues you can take:

• Focus groups
• Competitive analysis
• Brand awareness research
• Market segmentation research

Consider the following questions that may be asked in an interview or focus group to learn more about your audience:

• “How do you search for that product?”
• “How useful was it?”
• “What words do you use when you search on Google?”

When you have completed your market research, identify what you have learned as well as your next steps based on these insights.

Creating a business plan is a key first step for all business owners . It is important for companies looking to secure funding resources. It also serves as a blueprint to summarize your key business objectives and goals.

To write a business plan , incorporate these eight main sections, which are often found in traditional templates:

• Executive summary : This is typically a one-page section that explains your objectives and includes your mission statement, core team, and why your company is positioned for success.
• Company description : This describes what you offer, your competitive advantages, and your business goals.
• Market analysis : This is where you explain your target market, market size, market trends, and competitive landscape.
• Organization and management : Explain who is working on your team and their professional background and experience.
• Service or product line : Describe the product or service you are offering, including any copyright or plans for patenting.
• Marketing and sales : Discuss your marketing and sales strategy. Discuss your pricing, key metrics, and sales plan.
• Funding request : If you are a company looking for funding, here is where you outline the capital you are requesting and where it will be allocated.
• Financial projections : Include projections for your company’s revenue and expenses. Consider including an income statement, balance sheet, and cash flow statement in this section.

A business plan is important because it helps clarify your action points, who you are, and what you offer, all in a coherent template.

Getting your business online is the next key step. In an ever-changing environment, it is important to know the tools, trends, and strategies for building a strong online presence to allow your business to grow.

Registering Your Domain

The first step is registering your name, or your website address. This can be in the form of your business name “.com.” To purchase your domain name, you can go to sites like GoDaddy or Namecheap . If you decide to build your website using WordPress, you will need to use a site such as these to host your website.

Web Hosting Companies

Alternatively, you can buy your domain name at a hosting company. These are companies like Shopify , Wix , or Amazon Web Services , that may also offer tools to build your website and release content on them. 

Website Design

A well-designed website is important for many reasons. Using a website builder, such as Mailchimp or Squarespace , can allow you to choose a theme, customize your pages, create relevant content, and set up a payment page.

Other key aspects of your website design include its functionality, simplicity, and ease of use. Allowing your potential customers to navigate the site intuitively will be key to their experience. Brand consistency—in your logo, colors, and typeface, for example—is also key to creating a unified brand.

Another essential part of website design is its mobile application. You’ll want to ensure that your website runs smoothly on mobile, that images load properly, that the text is legible, and that buttons are intuitive to click.

This step focuses on how to choose the right product or service to sell. At the heart of this choice is the goal of solving a customer’s problem. But there are a number of strategies you can use to identify your product idea.

For example, you might consider analyzing companies with high-profit margins, products that align with your passion, burgeoning trends, items trending on online marketplaces, and/or customer reviews.

With this in mind, analyze how this product will get to your customers. Additionally, you may consider products that are not available in stores in your local market but are offered in communities such as Europe or Japan, for example.

Marketing strategy and promotion is an essential driver of business growth. As the digital landscape evolves, it’s important to have an effective marketing plan that resonates with changing consumer preferences and needs.

Here are questions that companies can consider as they create their marketing strategy, navigating today’s environment:

• Impact, value, and growth : What are the goals and key performance indicators (KPIs) that will measure success for your business? How will you explain the value that the business provides to its customers and/or society? Create an “elevator speech”—a 30-second description of what you offer and why it’s special.
• Customer need and brand promise : How does the brand meet a customer’s need through its products and services?
• Customer experience : How will the business deliver the best experiences at each stage of the customer journey?
• Organizational model : How will the business operate to serve the customer with the most impact?

These will help you understand what types of strategies can have real impact.

Types of Marketing Strategies

Consider the following digital marketing strategies that can be used for your online business:

• Email marketing
• Social media marketing
• Paid advertising
• Search engine optimization (SEO)
• Content marketing
• Influencer marketing

Each of these presents a different way to reach your target audience, drive conversions, or build brand awareness, depending on your marketing goals.

You need to determine that for yourself. But before starting an online business, it’s important to assess the time, investment, and resources you’ll need to get it off the ground. While the barrier to entry can be quite low, it’s worth considering your goals and strategies for making it a reality.

However, compared with starting up a traditional brick-and-mortar business, the risks of launching an online business may be reduced due to lower upfront costs such as rent, staff, and materials, among others.

The short answer: yes. While it depends on the type of business you hope to pursue, there are many ways to set up an online business at very little cost. For example, you could offer your services doing freelance work, photography, bookkeeping, or personal training. The primary costs involved include setting up your business website, which can cost as little as $2 to $20 each year with companies such as GoDaddy.

There are a number of digital marketing strategies that online businesses can use, such as content marketing, email marketing, paid advertising, SEO, and influencer marketing. Each of these strategies can be useful, depending on your product and goals.

Starting an online business can be a powerful way to launch a new product or service while reaching a wider audience. With market research, a solid business plan, a strong website, and a digital marketing strategy, you can get started in growing your company effectively. As customers increasingly make decisions virtually, building an online business is vital to any business owner’s success.

Pew Research Center. “ For Shopping, Phones Are Common and Influencers Have Become a Factor—Especially for Young Adults .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

Ogilvy. “ Getting Future Ready with Marketing Transformation ,” Page 15.

GoDaddy. “ How Much Does a Domain Name Cost? Find Out! ”

• How to Start a Business: A Comprehensive Guide and Essential Steps 1 of 25
• How to Do Market Research, Types, and Example 2 of 25
• Marketing Strategy: What It Is, How It Works, and How to Create One 3 of 25
• Marketing in Business: Strategies and Types Explained 4 of 25
• What Is a Marketing Plan? Types and How to Write One 5 of 25
• Business Development: Definition, Strategies, Steps & Skills 6 of 25
• Business Plan: What It Is, What's Included, and How to Write One 7 of 25
• Small Business Development Center (SBDC): Meaning, Types, Impact 8 of 25
• How to Write a Business Plan for a Loan 9 of 25
• Business Startup Costs: It’s in the Details 10 of 25
• Startup Capital Definition, Types, and Risks 11 of 25
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 25
• Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 25
• Starting a Business with No Money: How to Begin 14 of 25
• A Comprehensive Guide to Establishing Business Credit 15 of 25
• Equity Financing: What It Is, How It Works, Pros and Cons 16 of 25
• Best Startup Business Loans 17 of 25
• Sole Proprietorship: What It Is, Pros and Cons, and Differences From an LLC 18 of 25
• Partnership: Definition, How It Works, Taxation, and Types 19 of 25
• What Is an LLC? Limited Liability Company Structure and Benefits Defined 20 of 25
• Corporation: What It Is and How to Form One 21 of 25
• Starting a Small Business: Your Complete How-to Guide 22 of 25
• Starting an Online Business: A Step-by-Step Guide 23 of 25
• How to Start Your Own Bookkeeping Business: Essential Tips 24 of 25
• How to Start a Successful Dropshipping Business: A Comprehensive Guide 25 of 25

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

• Starting a Business
• Growing a Business
• Small Business Guide
• Business News
• Science & Technology
• Money & Finance
• For Subscribers
• Write for Entrepreneur
• Entrepreneur Store
• United States
• Asia Pacific
• Middle East
• South Africa

Copyright © 2024 Entrepreneur Media, LLC All rights reserved. Entrepreneur® and its related marks are registered trademarks of Entrepreneur Media LLC

7 Benefits of Starting an Online Business

By Entrepreneur Deals • Oct 12, 2022

Disclosure: Our goal is to feature products and services that we think you'll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

Starting an online business has plenty of advantages. Some of the main benefits of starting an online business are to make money, of course, but also to create brand awareness and customer engagement. Read on to learn more about the seven significant benefits of starting an online business.

The benefits of online businesses

These are seven benefits of starting an online business:

• Low operating costs
• Potential for high scalability
• Freedom to work from anywhere
• Large client and consumer base
• Quality customer support
• Marketing is made easy
• Promised job security

1. Low startup and operating costs.

One of the biggest reasons entrepreneurs and small-business owners start online businesses is the minimal startup costs and the overall low operating costs. Having no physical storefront or warehouse tremendously cuts down your overhead.

You can simply have the products you sell shipped directly to the customers from an outsourced supplier, also known as dropshipping. This can mean that you may not always need to have your inventory in hand; instead, you can have the products held by suppliers, who do the heavy work for you.

Some of the main costs you will have upfront would be the creation of your new business name, domain name logo, design, and website.

As this can become costly, depending on how in-depth you want to go, affordable options are available. Knowing your budget and researching before choosing a designer is essential.

Some of the ongoing costs you may incur monthly to keep your online business running would be an internet connection, website maintenance, advertising and marketing, and possibly a business coach or advisor.

These monthly costs are significantly lower when running an online business and serve as an overall investment into your business.

2. Potential for high scalability.

Your client base and potential customer reach are boundless when running an online business.

When running a storefront for a brick-and-mortar business, you depend on your business's location and visibility to thrive. If your business is located where the foot and car traffic are low, you may have a more challenging time bringing in large numbers of potential customers to your storefront.

With an online business plan, you are not limited to selling products to the individuals walking or driving past your store, but you can reach clients all over the globe. You are leveraging the online world right at your fingertips by having an online business.

Starting an online business does not mean you can scale high volume overnight; it takes time and the proper advertising and marketing , but the potential is massive.

3. Freedom to work from anywhere.

Many entrepreneurs are called to start online businesses because of the freedom it provides. You can work from anywhere and usually at any time of your choosing.

When working in a fixed location or office on a set schedule, every day can be incredibly mundane. This can also dramatically decrease your creativity levels. You can easily sit on the beach or in a coffee shop with your favorite beverage, laptop out, managing your business.

One thing to keep in mind as an entrepreneur who has the freedom to work from anywhere is that being disciplined is key to successfully balancing freedom and responsibility. This is how your online business and personal life will thrive.

4. Large client and consumer base.

Inevitably, having an online business can mean reaching an unlimited amount of potential customers and clients worldwide. Nowadays, everyone enjoys the convenience of being able to open up their phone or computer to make a purchase.

An online ecommerce business enables consumers to browse your online store or shop your physical products and services easily. Whether you run a dropshipping business or sell even digital products, an ecommerce site can bring in massive traffic.

Browsing can create conversion into sales as these potential customers have a high chance of coming back to your website to make purchases.

With the proper advertising and marketing strategies, you can easily make sales conversions and create returning customers. Implementing product and service reviews allows potential customers to read a review on a product that they are interested in, which can be beneficial to your business, whether it is a good or bad review.

Having customers or clients submit reviews on a purchased product will attract more customers to your website. This can be a bit harder when purchasing an item from a brick-and-mortar storefront, in which there are no previous reviews to look at.

Having a prominent social media presence can be beneficial to your business as well, as there are a vast amount of potential customers there as well. Social media can also serve as free advertising for your business. If a friend sees another friend or influencer posting about a product, they can be more inclined to check out that product or even purchase it themselves.

There is a tremendous client and consumer base on the internet that is all just a click away.

5. Quality customer support.

Another significant benefit of having an online business is that it allows you to answer customer queries and concerns in a timely fashion. Having the luxury of the internet at your fingertips means quickly getting alerted on business notifications and providing quality customer support.

Running an online business means you can quickly respond to and address customer inquiries, queries, questions, and complaints with meaningful responses. In other words, you can use the internet to support your answers with trusted related information.

You can also create short instructional video responses or visuals to answer specific questions that customers may have. The beauty of this is that you can keep and reuse that video forever, or you can create a FAQ page on your website to include frequently asked questions by customers and your detailed responses and videos.

Having quality customer support can bring potential and returning customers to your website.

6. Marketing is made easy.

Reaching a global audience is easier than it sounds. No online business hits the ground running overnight. It takes effort but, more importantly, it takes strategy. Another benefit of having an online business is that many digital marketing and SEO advertising agencies specialize in growing your brand awareness and setting you apart from the competition.

By having an online business, you can market by optimizing your website and utilizing search engine optimization, social media marketing, and email marketing. You can do all of this simply through the internet and with some help. A successful online business, like an ecommerce website or online course, helps simplify digital marketing because it operates in the same medium.

Affiliate marketing on social media accounts is easy to gain a presence. If you do it on your own, it may be challenging but not impossible. Hiring a marketing team or starting an affiliate program is one of the investments you may take on with an online business, but it is well worth it.

Using social media, you can post your products and build rapport with your target audience, which you can then convert into customers. Customers also like to repost their purchases, especially if they like them.

7. Promised job security.

One of the biggest reasons that starting an online business can be a life-changing decision is that there is promised job security. Many people think that running an online business can be very risky—and yes, it can be.

When you train yourself to become an online business owner, you are preparing for promised job security because you will learn skills that will stick, even if your first online business fails.

Online business models are the new thing, and they aren't going anywhere. Take these ecommerce companies, for example, ETSY , Amazon , Shopify , etc. They have proven that running online businesses can be highly lucrative, and there is a massive market for online shopping. These are just a few platforms you can utilize to host your online store.

Once you learn the skills you need and make the first few sales, you will see that having an online business means you can make money in your sleep, and who doesn't want to make money while sleeping?

The bottom line.

As outlined in this article, there are many benefits to starting an online business. It is a lucrative business once done correctly. Yes, many will try and fail on their first attempt, but the skills you learn are invaluable. If you want job security, freedom, and creativity, starting an online business will be one of the best investments you can make for yourself.

Information provided is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, we do not recommend or advise individuals to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.

Entrepreneur Deals

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick Red Arrow

• This 103-Year-Old Doctor Opened Her Medical Practice Before Women Could Have Bank Accounts — Here Are Her 6 Secrets to a Healthy, Successful Life
• Lock 5 Ways You Might Be Cheating on Your Taxes — And Why You Will Get Caught
• I've Had a Secret Side Hustle for Decades. It Keeps Tens of Thousands of Dollars in My Pocket — and Gets Me Into Places I Wouldn't Go Otherwise .
• Lock Here's How Steve Jobs Dealt With Negative Press and Avoided Brand Disasters
• One Factor Is Helping This Entrepreneur Tackle Business Ownership Later in Life. Now, She's Jumping Into a $20 Billion Industry .
• Lock Narcissism Can Help You Be Successful — Here's How to Harness It Without Going Too Far, According to an Ivy League-Trained Psychotherapist

Most Popular Red Arrow

Renowned psychologist adam grant says this 3-step leadership method will help fight employee burnout.

We spoke to the bestselling author at BetterUp's Uplift conference last week.

These Are Best Cities in the World for Remote Workers, According to a New Ranking

A recent report from Remote.com ranked over 100 cities in the world. Here's the best of the bunch.

This Flexible Side Hustle Is Helping Millions Earn Extra Cash — and Might Be 'More Attractive' Than an Office Job

Side hustles remain popular for additional income — and have many questioning the 9-5 model altogether.

This Revolutionary Tool Will Streamline Your Sales and Workload — Here's How You Can Harness It Today.

Custom GPTs are revolutionizing sales operations in 2024 by enabling personalized automation that boosts efficiency and conversions. These tailored AI solutions enhance customer interactions and streamline workflows, marking a significant advancement in sales technology.

NASA Reveals What the Strange Object Was that Fell From the Sky and Tore Through a Florida Home's Roof

The home's owner, Alejandro Otero, allowed NASA to collect and analyze the sample after attempting to connect with the agency through a post on X, formerly Twitter, last month.

Representation In AI Development Matters — Follow These 5 Principles to Make AI More Inclusive For All

Four out of five leaders and other execs want to learn more about how to use AI in their professional roles, but how can you craft it to also make diversity and inclusion a collective North Star?

Successfully copied link

6 Reasons You Really Need to Write A Business Plan

Published: October 14, 2020

Starting a busine ss can be a daunting task, especially if you’re starting from square one.

It’s easy to feel stuck in the whirlwind of things you’ll need to do, like registering your company, building a team, advertising, the list goes on. Not to mention, a business idea with no foundation can make the process seem incredibly intimidating.

Thankfully, business plans are an antidote for the new business woes that many entrepreneurs feel. Some may shy away from the idea, as they are lengthy documents that require a significant amount of attention and care.

However, there’s a reason why those who take the time to write out a business plan are 16% more likely to be successful than those who don’t. In other words, business plans work.

What is a business plan, and why does it matter?

In brief, a business plan is a roadmap to success. It's a blueprint for entrepreneurs to follow that helps them outline, understand, and cohesively achieve their goals.

Writing a business plan involves defining critical aspects of your business, like brand messaging, conducting market research, and creating pricing strategies — all before starting the company.

A business plan can also increase your confidence. You’ll get a holistic view of your idea and understand whether it's worth pursuing.

So, why not take the time to create a blueprint that will make your job easier? Let’s take a look at six reasons why you should write a business plan before doing anything else.

Six Reasons You Really Need To Write a Business Plan

• Legitimize your business idea.
• Give your business a foundation for success.
• Obtain funding and investments.
• Hire the right people.
• Communicate your needs.
• It makes it easier to sell your business.

1. Legitimize your business idea.

Pursuing business ideas that stem from passions you’ve had for years can be exciting, but that doesn’t necessarily mean it’s a sound venture.

One of the first things a business plan requires you to do is research your target market. You’ll gain a nuanced understanding of industry trends and what your competitors have done, or not, to succeed. You may find that the idea you have when you start is not likely to be successful.

That may feel disheartening, but you can always modify your original idea to better fit market needs. The more you understand about the industry, your future competitors, and your prospective customers, the greater the likelihood of success. If you identify issues early on, you can develop strategies to deal with them rather than troubleshooting as they happen.

It’s better to know sooner rather than later if your business will be successful before investing time and money.

2. Give your business a foundation for success.

Let's say you’re looking to start a clean beauty company. There are thousands of directions you can go in, so just saying, “I’m starting a clean beauty company!” isn’t enough.

You need to know what specific products you want to make, and why you’re deciding to create them. The Pricing and Product Line style="color: #33475b;"> section of a business plan requires you to identify these elements, making it easier to plan for other components of your business strategy.

You’ll also use your initial market research to outline financial projections, goals, objectives, and operational needs. Identifying these factors ahead of time creates a strong foundation, as you’ll be making critical business decisions early on.

You can refer back to the goals you’ve set within your business plan to track your progress over time and prioritize areas that need extra attention.

All in all, every section of your business plan requires you to go in-depth into your future business strategy before even acting on any of those plans. Having a plan at the ready gives your business a solid foundation for growth.

When you start your company, and your product reaches the market, you’ll spend less time troubleshooting and more time focusing on your target audiences and generating revenue.

3. Obtain funding and investments.

Every new business needs capital to get off the ground. Although it would be nice, banks won’t finance loans just because you request one. They want to know what the money is for, where it’s going, and if you’ll eventually be able to pay it back.

If you want investors to be part of your financing plan, they’ll have questions about your business’ pricing strategies and revenue models. Investors can also back out if they feel like their money isn’t put to fair use. They’ll want something to refer back to track your progress over time and understand if you’re meeting the goals you told them you’d meet. They want to know if their investment was worthwhile.

The Financial Considerations section of a business plan will prompt you to estimate costs ahead of time and establish revenue objectives before applying for loans or speaking to investors.

You’ll secure and finalize your strategy in advance to avoid showing up unprepared for meetings with potential investors.

4. Hire the right people.

After you’ve completed your business plan and you have a clear view of your strategies, goals, and financial needs, there may be milestones you need to meet that require skills you don’t yet have. You may need to hire new people to fill in the gaps.

Having a strategic plan to share with prospective partners and employees can prove that they aren’t signing on to a sinking ship.

If your plans are summarized and feasible, they’ll understand why you want them on your team, and why they should agree to work with you.

5. Communicate your needs.

If you don’t understand how your business will run, it’ll be hard to communicate your business’s legitimacy to all involved parties.

Your plan will give you a well-rounded view of how your business will work, and make it easier for you to communicate this to others.

You may have already secured financing from banks and made deals with investors, but a business’ needs are always changing. While your business grows, you’ll likely need more financial support, more partners, or just expand your services and product offers. Using your business plan as a measure of how you’ve met your goals can make it easier to bring people onto your team at all stages of the process.

6. It makes it easier to sell your business.

A buyer won’t want to purchase a business that will run into the ground after signing the papers. They want a successful, established company.

A business plan that details milestones you can prove you’ve already met can be used to show prospective buyers how you’ve generated success within your market. You can use your accomplishments to negotiate higher price points aligned with your business’ value.

A Business Plan Is Essential

Ultimately, having a business plan can increase your confidence in your new venture. You’ll understand what your business needs to succeed, and outline the tactics you’ll use to achieve those goals.

Some people have a lifetime goal of turning their passions into successful business ventures, and a well-crafted business plan can make those dreams come true.

Don't forget to share this post!

Related articles.

24 of My Favorite Sample Business Plans & Examples For Your Inspiration

How to Write a Powerful Executive Summary [+4 Top Examples]

19 Best Sample Business Plans & Examples to Help You Write Your Own

What is a Business Plan? Definition, Tips, and Templates

Maximizing Your Social Media Strategy: The Top Aggregator Tools to Use

The Content Aggregator Guide for 2023

7 Gantt Chart Examples You'll Want to Copy [+ 5 Steps to Make One]

The 8 Best Free Flowchart Templates [+ Examples]

16 Best Screen Recorders to Use for Collaboration

The 25 Best Google Chrome Extensions for SEO

2 Essential Templates For Starting Your Business

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

Be Stress Free and Tax Ready 🙌 70% Off for 4 Months. BUY NOW & SAVE

70% Off for 4 Months Buy Now & Save

Wow clients with professional invoices that take seconds to create

Quick and easy online, recurring, and invoice-free payment options

Automated, to accurately track time and easily log billable hours

Reports and tools to track money in and out, so you know where you stand

Easily log expenses and receipts to ensure your books are always tax-time ready

Tax time and business health reports keep you informed and tax-time ready

Automatically track your mileage and never miss a mileage deduction again

Time-saving all-in-one bookkeeping that your business can count on

Track project status and collaborate with clients and team members

Organized and professional, helping you stand out and win new clients

Set clear expectations with clients and organize your plans for each project

Client management made easy, with client info all in one place

Pay your employees and keep accurate books with Payroll software integrations

• Team Management

FreshBooks integrates with over 100 partners to help you simplify your workflows

Send invoices, track time, manage payments, and more…from anywhere.

• Freelancers
• Self-Employed Professionals
• Businesses With Employees
• Businesses With Contractors
• Marketing & Agencies
• Construction & Trades
• IT & Technology
• Business & Prof. Services
• Accounting Partner Program
• Collaborative Accounting™
• Accountant Hub
• Reports Library
• FreshBooks vs QuickBooks
• FreshBooks vs HoneyBook
• FreshBooks vs Harvest
• FreshBooks vs Wave
• FreshBooks vs Xero
• Free Invoice Generator
• Invoice Templates
• Accounting Templates
• Business Name Generator
• Estimate Templates
• Help Center
• Business Loan Calculator
• Mark Up Calculator

Call Toll Free: 1.866.303.6061

1-888-674-3175

• All Articles
• Productivity
• Project Management
• Bookkeeping

Resources for Your Growing Business

The importance of business plan: 5 key reasons.

A key part of any business is its business plan. They can help define the goals of your business and help it reach success. A good business plan can also help you develop an adequate marketing strategy. There are a number of reasons all business owners need business plans, keep reading to learn more!

Here’s What We’ll Cover:

What Is a Business Plan?

5 reasons you need a well-written business plan, how do i make a business plan, key takeaways.

A business plan contains detailed information that can help determine its success. Some of this information can include the following:

• Market analysis
• Cash flow projection
• Competitive analysis
• Financial statements and financial projections
• An operating plan

A solid business plan is a good way to attract potential investors. It can also help you display to business partners that you have a successful business growing. In a competitive landscape, a formal business plan is your key to success.

Check out all of the biggest reasons you need a good business plan below.

1. To Secure Funding

Whether you’re seeking funding from a venture capitalist or a bank, you’ll need a business plan. Business plans are the foundation of a business. They tell the parties that you’re seeking funding from whether or not you’re worth investing in. If you need any sort of outside financing, you’ll need a good business plan to secure it.

2. Set and Communicate Goals

A business plan gives you a tangible way of reviewing your business goals. Business plans revolve around the present and the future. When you establish your goals and put them in writing, you’re more likely to reach them. A strong business plan includes these goals, and allows you to communicate them to investors and employees alike.

3. Prove Viability in the Market

While many businesses are born from passion, not many will last without an effective business plan. While a business concept may seem sound, things may change once the specifics are written down. Often, people who attempt to start a business without a plan will fail. This is because they don’t take into account all of the planning and funds needed to get a business off of the ground.

Market research is a large part of the business planning process. It lets you review your potential customers, as well as the competition, in your field. By understanding both you can set price points for products or services. Sometimes, it may not make sense to start a business based on the existing competition. Other times, market research can guide you to effective marketing strategies that others lack. To have a successful business, it has to be viable. A business plan will help you determine that.

4. They Help Owners Avoid Failure

Far too often, small businesses fail. Many times, this is due to the lack of a strong business plan. There are many reasons that small businesses fail, most of which can be avoided by developing a business plan. Some of them are listed below, which can be avoided by having a business plan:

• The market doesn’t need the business’s product or service
• The business didn’t take into account the amount of capital needed
• The market is oversaturated
• The prices set by the business are too high, pushing potential customers away

Any good business plan includes information to help business owners avoid these issues.

5. Business Plans Reduce Risk

Related to the last reason, business plans help reduce risk. A well-thought-out business plan helps reduce risky decisions. They help business owners make informed decisions based on the research they conduct. Any business owner can tell you that the most important part of their job is making critical decisions. A business plan that factors in all possible situations helps make those decisions.

Luckily, there are plenty of tools available to help you create a business plan. A simple search can lead you to helpful tools, like a business plan template . These are helpful, as they let you fill in the information as you go. Many of them provide basic instructions on how to create the business plan, as well.

If you plan on starting a business, you’ll need a business plan. They’re good for a vast number of things. Business plans help owners make informed decisions, as well as set goals and secure funding. Don’t put off putting together your business plan!

If you’re in the planning stages of your business, be sure to check out our resource hub . We have plenty of valuable resources and articles for you when you’re just getting started. Check it out today!

RELATED ARTICLES

Save Time Billing and Get Paid 2x Faster With FreshBooks

Want More Helpful Articles About Running a Business?

Get more great content in your Inbox.

By subscribing, you agree to receive communications from FreshBooks and acknowledge and agree to FreshBook’s Privacy Policy . You can unsubscribe at any time by contacting us at [email protected].

👋 Welcome to FreshBooks

To see our product designed specifically for your country, please visit the United States site.

Why Is a Business Plan Important? (+ How to Create One)

June 21st, 2022 |  Small Business Resources

A business plan is not something you create just for the sake of creating it—it’s a key factor in your company’s success. According to a SCORE survey , the next biggest source of support for small business owners just starting out—behind their friends and family—is having a solid business plan in place.

Aside box: What is a business plan?

A business plan is a written document that outlines what your business objectives are and how you will go about achieving them. Refresh your business plan regularly to reflect with your evolving business objectives.

Business plans can be both internal and external documents. If you’re looking to secure funding from an investor or get a loan from a bank, they will certainly want to evaluate your business plan first.

Why is this plan so important? Because entrepreneurship without a business plan is like traveling without a roadmap. You might reach your destination eventually without it, but the journey will be tough, if not impossible.

Know the location of your destination and what roads you’ll need to travel, and you’ll significantly increase your chances of success.

12 reasons why having a business plan is important

The process of creating your business plan encourages you to take a deep dive into every aspect of your company—helping you spot flaws and take steps to improve.

Beyond highlighting weaknesses, a strong business plan positively shapes a company’s reputation. It shows investors, partners, and even potential hires that your business is working toward clear objectives and is on a reliable growth path.

1. It helps confirm the viability of your business idea

The research that goes into creating your business plan will help you gauge whether your idea is a viable one. You’ll learn the size of your potential market, who your competitors are, who your target customers are, and what problem you’re solving for them.

With this information, you can evaluate your chances of creating a profitable and sustainable business.

2. It helps you make financial projections

According to CB Insights , almost 40% of startups ran out of cash or failed to raise new capital. Business plans require you to evaluate your current financials and projects in detail, so you can steer clear of draining your bank account.

3. It helps you protect your business from common risks

Very few companies and individuals are willing to work in any capacity with businesses that don’t protect their partners with professional liability policies. To form your business plan, you’ll need to learn about the business risks your company faces and put together an insurance plan that helps mitigate them.

4. It helps you form partnerships

Regardless of the type of partners you have—contractors, freelancers, vendors, manufacturers—you need to establish trust. Partners want to know the specifics of your proposed cooperation before they commit.

Successful partnerships depend on well-defined roles and responsibilities and clearly specified incentives and key performance indicators (KPIs).

Business plans clearly define what cooperation and success look like for partnerships, so external parties feel comfortable working with your company.

5. It helps you hire and retain top talent

You can’t hire good people if they don’t believe your business is viable. A business plan shows top talent that your company has potential and is a good place to work.

A clear business plan is also helpful when you’re seeking hiring advice from more experienced peers. Approaching them with a business plan in hand makes that process easier as well.

“Merely telling a friend or potential business mentor you’re aiming to start with ten employees, for example, is not an exceptionally detailed statement,” said Admir Salcinovic, co-founder and marketing manager of PriceListo . “Showing a business plan that outlines the exact duties, salaries, and expectations you have for employees gives far more information for people to provide advice about.”

6. It provides you with competitor analysis

Market analysis is one of the cornerstones of a business plan. This process involves identifying and researching your main competitors and their business models. This data can provide insights into how you should position your business on the market in order to be competitive and carve out a market share for yourself.

7. It helps you understand customer pain points

Along with highlighting competitors, your market research helps you pin down the problem you’re solving for customers and how you plan on helping them. This research often involves surveying customers to understand their pain points.

8. It helps you assemble the right executive team

According to CB Insights , 15% of new businesses failed because the team they had in place wasn’t right. A strong and experienced leadership team can help navigate the many bumps in the road that new business experience, like structural and personal problem solving, risk assessment, and dips in team morale.

Business plans must include a detailed analysis of your management—who they are, and what they bring to the table to evaluate your leadership internally and externally. Startups also commonly dedicate a section of their business plans to the type of culture they are looking to build.

9. It makes you more attractive to lenders/investors

Real talk—most investors and banks won’t even talk to you if you don’t have a business plan. Harvard Business Review research from 2017 showed that writing a business plan increases the chances of your team receiving funding, noting that having a business plan “builds legitimacy and confidence among investors that the entrepreneur is serious.” “When I went to banks to ask for loans, every one of them asked for my business plan,” said Marina Vaamonde, owner and founder of off-market house marketplace HouseCashin . “If I didn’t have mine ready at the time, I would have wasted time during a crucial growth phase of my business when I needed employees.”

Investors and banks will use your business plan to understand your revenue model, cash flow, and, most importantly, how you plan on using funding.

“No matter how great your idea, angel investors won’t invest without a formal business plan,” said Calloway Cook, president of Illuminate Labs . “It doesn’t need to be 50-pages long, but they want to see that you’ve done the work to validate your concept, both informally with customer interviews and formally with market research.”

Cook, whose team was able to raise a pre-seed round of slightly over $100,000, also recommends including directly sourced customer data in your business plan to attract investors.

“Get feedback from real users. This is what sways the minds of investors,” said Cook. “Anyone can create a hypothetical profitable scenario using market size and demographic information, but if investors can see real people interested in your product or service, they’ll be more likely to invest.”

10. It helps you create a marketing strategy

To form a business plan, you’ll need to research on customer demographics and preferences. This data can inform and strengthen your marketing and branding strategies—helping you target your ideal customer.

New companies often have a limited budget to work with and need to adopt strategies that can spark greater growth and cost less than traditional marketing channels. The market research you’re doing for your business plan makes it a perfect starting point for developing these strategies.

11. It helps you set your pricing

The market analysis you perform while writing your business plan will inform how you set your pricing. Your competitor pricing models, your cost of goods sold , and your break-even point are some of the valuable data points you’ll need to acquire to start shaping your pricing model and your sales strategy.

12. It helps you establish the right KPIs

You can’t report on the progress of your business without first establishing what metrics are important to track.

Business plans show what metrics are important to track, given your financial projections, sales goals, marketing plans, and budgets. When you know which metrics to track, everyone in your organization can report on the progress of your business.

KPIs are not just financial goals. They can include trackable data like customer count, the quality of customer service (first response time, customer service satisfaction), and staff-related data like attendance, quality of work, retention, and satisfaction levels.

How to write a business plan: What are the core components?

To provide a big-picture view of vital company insights that gives both your team and third parties an easy way to gauge your financial health and projected growth, a good business plan must include the following components:

Executive summary

The executive summary serves as a high-level synopsis of your business plan—like the Cliff Notes for a book. It gives a general overview of the topics that your business plan will cover.

An executive summary should always be fairly brief. But when presenting your plan to third parties, it’s also important to write a summary that’s compelling enough to intrigue them and make them want to read on.

Even though this summary appears first in a business plan, we recommend writing this section last. That way, you’ll be familiar enough with all of the business plan’s main sections to be able to write a concise and accurate summary to kick it off.

Business summary

The business summary covers how the products and services your company offers serve the market. This section of your business plan should focus on your value proposition—defining what pain points you solve for your customers and how.

Explain what differentiates your brand from competitors by showing customer reviews and listing success stories and accomplishments. Readers of the business summary should come away from it convinced that your business is a viable one.

It’s also a good idea to wait until you’ve written the market analysis section before writing this section. Your business summary should consist of condensed takeaways sourced from market research.

Market analysis

This component of your business plan answers questions about the market in which your company is competing, such as:

• How big are your target market segments?
• Where does your business fit within these segments?
• Who are the main competitors?
• Who are your customers?

Performing market research is difficult work, especially for less experienced business owners. If you have the funds to do so, hiring a market research/competitive analysis agency to perform the analysis for you is definitely worth it.

The good news is that there are plenty of available resources for those who want to perform their own research, especially online, such as:

• U.S. census data tools : These tools and free industry research reports can help you determine your market size and gain insight into potential customer demographics data.
• Statista : One of the best research data websites, Statista covers hundreds of industries, constantly performing market research and providing hard business data. The website also uses graphs and charts to make their data more understandable for those who might be new to market research.
• Google Trends : Google Trends can help you understand what potential customers are most interested in, allowing you to see into the minds of consumers and audiences. The tool offers robust filter options to create detailed reports about what the trending stories and most searched terms are in a particular demographic.

If you’d rather find mentors and learn about your market through personal interactions, you can look to join local business organizations such as your local chamber of commerce , the National Federation of Independent Business (NFIB) , or Business Network International (BNI) .

Your market research helps you nail down your ideal customer segments. Uncover key customer demographics: where they live, how much money they make, how old they are, what their level of education is, what their buying habits look like, and more.

Market analysis will help you uncover who your direct competitors are, what their strengths and weakness are, and how your offer differs from theirs.

“Going in blind, without understanding who my competitors were, as well as their core strengths and weaknesses, would have decimated any chances of me establishing a worthwhile competitive strategy,” said Lisa Richards, CEO of the health website the Candida Diet . “Knowing who my competition was made it possible for me to develop a differentiation strategy that set me apart from them in terms of brand perception, allowing me to capture a large share of the market from the very beginning,” she added.

Marketing and sales plan

Along with identifying your target market, a business plan should outline how you plan on reaching this audience and selling your product or service to them.

This section of your business plan should detail your branding and marketing strategy. You should also cover any promotional strategies you plan to implement and a description of the current and future strategic partnerships you plan on installing. For example, if your business sells homemade soap, you could list the brick-and-mortar and online shops you plan on partnering with to increase the reach of your sales.

It should also include pricing strategy—the methodology and process behind how you plan on setting prices for your product or services. Set your prices too low, and you could struggle to turn a profit. Set the price too high, and customers could turn to your more affordable competition.

“After creating our initial business plan, we immediately saw how our business is not profitable enough given the current pricing ranges we have and the target market,” said Sherry Morgan, founder of animal content hub Petsolino . “After further investigation, we found out the holes in our initial plan. From there, we adjusted our pricing and selling strategies.”

The management-related part of your business plan should explain your company hierarchy and introduce your business’s leaders by providing information about their professional backgrounds, education, and achievements.

If you’ve received funding, be sure to highlight your investors, shareholders, and any professional advisors. If you have imminent hiring needs within management, detail them in this section.

Financial plan

The three statements that are integral to your financial plan section are your cash flow statement, income statement, and balance sheet. You should include a short explanation or analysis of all three in your business plan. Don’t hesitate to ask for expert help here, especially if you don’t currently have an in-house accountant.

This section of your business plan is particularly important if you’re looking to attract potential investors or you want to take out a business loan. If that’s the case, in addition to the three mandatory financial statements, you must also provide a detailed list of what you need the money for (marketing, equipment, labor expenses, insurance costs, rent, etc.).

As you grow, your financial plan will help you develop a model for tracking your income and expenses that will enable you to allocate your resources more effectively.

Revisit and revise your business plan regularly

Business plans are never set in stone. They must evolve and change as your business grows and reaches new milestones. Set a regular review schedule to revisit your business plan and tweak it when necessary.

“Creating and evaluating your business plan on a regular basis is a wonderful approach to identify weaknesses, gaps, and assumptions you’ve made to establish contingency plans,” said Matthew Paxton, founder and owner of gaming website Hypernia .

As you make adjustments, don’t hesitate to pick the brains of more experienced business people and mentors to gain different perspectives on areas of improvement for your business plan.

Share This Article

April 12th, 2022

March 31st, 2022

March 9th, 2022

June 26th, 2020

July 15th, 2020

This website uses cookies to improve your experience. By continuing to browse the site, you are agreeing to our use of cookies. Review our Privacy Policy for more details.

• Business Essentials
• Leadership & Management
• Credential of Leadership, Impact, and Management in Business (CLIMB)
• Entrepreneurship & Innovation
• *New* Digital Transformation
• Finance & Accounting
• Business in Society
• For Organizations
• Support Portal
• Media Coverage
• Founding Donors
• Leadership Team

• Harvard Business School →
• HBS Online →
• Business Insights →

Business Insights

Harvard Business School Online's Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.

• Career Development
• Communication
• Decision-Making
• Earning Your MBA
• Negotiation
• News & Events
• Productivity
• Staff Spotlight
• Student Profiles
• Work-Life Balance
• Alternative Investments
• Business Analytics
• Business Strategy
• Business and Climate Change
• Design Thinking and Innovation
• Digital Marketing Strategy
• Disruptive Strategy
• Economics for Managers
• Entrepreneurship Essentials
• Financial Accounting
• Global Business
• Launching Tech Ventures
• Leadership Principles
• Leadership, Ethics, and Corporate Accountability
• Leading with Finance
• Management Essentials
• Negotiation Mastery
• Organizational Leadership
• Power and Influence for Positive Impact
• Strategy Execution
• Sustainable Business Strategy
• Sustainable Investing
• Winning with Digital Platforms

How to Create a Digital Marketing Plan: 4 Steps

• 08 Feb 2024

Digital marketing is essential; it helps you connect with customers via online channels and enhance brand awareness. To ensure your campaigns succeed, you need an effective digital marketing plan and strategy.

Not all businesses understand strategic planning's importance. According to a Smart Insights report , only 17 percent clearly define their digital marketing strategies.

If you want to create a digital marketing plan, here’s an overview of what it needs and four steps to take.

Access your free e-book today.

What Is a Digital Marketing Plan & Why Is It Important?

Technology has revolutionized business, but that doesn’t mean traditional marketing tactics are obsolete.

“There are certain aspects of marketing that remain true no matter how technology changes,” says Harvard Business School Professor Sunil Gupta, who teaches the course Digital Marketing Strategy . “One of these aspects is the importance of developing a plan to effectively use your marketing resources.”

A digital marketing plan is a comprehensive strategy outlining how your company will use digital channels to promote its products and services. Unlike traditional marketing tactics, it focuses on identifying your target audience and connecting with consumers via online platforms and channels.

Your plan’s significance can’t be overstated. It provides a strategic focus while optimizing your marketing efforts and budget. More importantly, it ensures your company remains agile and responsive to market dynamics and maintains a competitive edge.

Adaptability is particularly crucial in times of uncertainty. According to HubSpot , 20 percent of marketers pivoted their established marketing plans last year due to the potential for a recession.

To help craft your digital marketing plan, here are four steps to ensuring it’s comprehensive and can weather market challenges.

4 Steps to Creating a Digital Marketing Plan

1. set goals & objectives.

The first step to creating your digital marketing plan is understanding what goals and objectives are essential to succeed.

“Companies often have multiple objectives, and you’ll need to prioritize and balance these goals,” Gupta says in Digital Marketing Strategy . “Often these goals are tied to the overall strategy of the company.”

For example, if you don’t work at a big-name company, you may want to focus on brand awareness. If you’re a market leader, you may want to expand your target audience by highlighting a new or revised product or service.

The best way to determine your company’s objectives is by identifying its challenges and opportunities throughout the customer journey , which has three stages:

• Awareness: Introducing customers to your brand or product to address a problem they have
• Consideration: Making customers aware of your brand or product while they evaluate alternatives
• Decision: Using information gathered during the previous stages to influence consumers’ purchasing decisions

“Which stage of the funnel you focus on and how you allocate your budget across different stages depends on the specific context of your brand and where you feel is the greatest barrier for your growth,” Gupta says in Digital Marketing Strategy .

Your company's strategic decisions hinge on which customer journey stage they pertain to. For example, to increase conversion rates at the consideration stage, you could allocate more resources to producing targeted, personalized content.

2. Identify Your Target Audience

Your digital marketing strategy is only effective if you know who you’re trying to attract. That’s why identifying your target audience —the consumers most likely interested in your products or services—is the next step to crafting your digital marketing plan.

To determine your target audience, collect data related to:

• Demographics: General information like age, gender, and occupation that help you make implicit assumptions about customers
• Customer behavior: Behavior patterns related to your products or services, such as purchasing history and website interactions
• Consumer motivations: Primary motivations when making purchases, such as convenience, value, or status

You can use your insights to employ tactics like segmentation —organizing your customers into groups.

“While you can try and market a product to everyone, consumers have different needs and preferences,” Gupta says in Digital Marketing Strategy . “What appeals to one group of consumers may not appeal to another.”

By segmenting your customers, you can provide personalized experiences—even when their needs or market conditions shift.

Related: 3 Most Common Types of Customer Needs to Be Aware Of

3. Define Your Value Proposition

Once you know who to target, you can communicate your value proposition .

“If you want to convince consumers to buy your product, you need to give them a compelling reason to purchase your brand instead of a competing brand,” Gupta says in Digital Marketing Strategy .

To start, you need to know your:

• Target audience
• Unique value
• Competitive set
• Justifications for brand value

You can then combine these components into a value positioning statement:

For [target market] , [Brand X] is the only brand that offers [unique value claim] among all [competitive set] because [reason to believe] .

According to Digital Marketing Strategy , you can analyze your value claim’s validity and potency using the three C’s of brand positioning:

• Consumer analysis: Understanding your target audience’s behaviors, needs, preferences, and motivations.
• Competitor analysis: Evaluating your competitors' strengths, weaknesses, and market position to enhance your strategy.
• Company analysis: Assessing your value proposition, capabilities, resources, and performance to identify areas for strategic improvement.

Effective brand positioning requires being faithful to your value claim and ensuring it’s feasible and favorable.

“As you work to create a value proposition, remember: A brand’s position is not just defined by the brand itself,” Gupta says in the course. “A brand co-creates its position with its consumers as they interact with each other and react to emerging cultural trends.”

4. Establish Metrics

Metrics are critical to your marketing plan. Without key performance indicators (KPIs) , it can be difficult to tell whether it’s effective.

Common marketing KPIs include:

• Impressions
• Click through rate
• Conversion rate

“At the simplest level, you need to measure what you set out to achieve with your marketing objectives,” Gupta says in Digital Marketing Strategy . “And certain metrics will be more relevant for specific stages of the funnel.”

For example, you can focus on metrics like impressions —the number of times your brand-specific content was displayed—to determine your strategy’s effectiveness at the awareness stage.

With a well-crafted digital marketing plan, you can use metrics to optimize your strategy as priorities shift throughout the customer journey.

Create Your Own Digital Marketing Plan

If you want to be a more strategic marketer, you need a digital marketing plan. With one, you can solidify your company’s position, enhance your digital marketing skills , and satisfy customers.

“Determining your marketing goals, who you’re reaching, understanding the uniqueness of what you have to offer them, and how you’ll measure the value of your marketing efforts isn’t always easy,” Gupta says in Digital Marketing Strategy . “However, as you clarify these components and create your plan, you’ll have a much clearer path ahead toward identifying, acquiring, and retaining customers.”

One of the most effective ways to learn how to craft a plan is by enrolling in an online marketing course, such as Digital Marketing Strategy . Through real-world case studies and interactive exercises, you can understand how to position your brand for success.

Do you want to create a digital marketing plan? Explore Digital Marketing Strategy to discover how. If you’re interested in exploring online education but aren’t sure where to start, download our free guide to online learning success .

About the Author

• Entrepreneurship
• Starting a Business
• My #1 Online Biz
• Business Planning
• Advertising
• Content Marketing
• Digital Marketing
• Public Relations
• Business Model
• Financial Forecasting
• Market Research
• Risk Management
• Business Plan
• Conferences
• Online Communities
• Professional Associations
• Social Media
• Human Resource
• Productivity
• Legal Requirements
• Business Structure
• Mission Statement
• Financial Plan
• Market Analysis
• Operational Plan
• SWOT Analysis
• Target Market
• Competitor Analysis
• Customer Profiling
• Market Trends
• Pricing Strategies
• Sole Proprietorship
• Partnership
• Cooperative
• Corporation
• Limited Liability

The Importance Of Business Planning: A Beginner’s Guide

by Mike Vestil  

Business planning is the process of determining the goals and objectives of a business and developing a roadmap to achieve them.

It involves the analysis of current and future market conditions, operational capabilities, financial resources, and other factors that impact business success.

Effective business planning helps entrepreneurs and organizations navigate the complexities of the market and make strategic decisions that increase profitability and longevity.

Whether you are starting a new business or looking to expand an existing one, a well-crafted business plan is critical to your success.

In this article, we will explore the key components of business planning and provide insights on how to create a plan that meets your specific needs.

Introduction To Business Planning

What is business planning.

A business plan can be described as a document that outlines and describes the goals of a business and the strategies that will be employed to achieve these goals.

It typically includes detailed information about the company, such as the products, services, and customers that it intends to target, as well as an analysis of the market and the competition.

A business plan also describes the financial projections and resources needed to achieve these goals, such as the amount of money that will be invested, the sales projections, and the operational costs.

The purpose of a business plan is to provide a roadmap for the business owner and all stakeholders, including investors, employees, and management teams.

The importance of a business plan cannot be overstated as it serves as a guide to identify and address potential challenges that a business owner may encounter along the way.

Starting and running a business can be a daunting task, but having a well-crafted business plan can help alleviate some of the stress associated with the unknowns of business ownership.

A business plan helps to define and communicate the vision of the business, which can be invaluable to gaining traction with potential investors or partners who can assist in the growth and development of the company.

It also serves as a tool for measuring success as it provides specific goals and objectives that can be compared to actual results.

In conclusion, a well-written business plan is essential to the overall success of a business.

It provides a clear road map of what the business hopes to achieve and how it intends to do so. It serves as a guide for all stakeholders and helps to communicate the vision of the business to potential investors, employees, and partners.

Ultimately, a business plan helps to mitigate potential risks and set the business up for success.

Importance Of Business Planning

Business planning is an essential activity that every organization must engage in irrespective of its nature or size. It helps organizations in setting goals, staying focused, and measuring progress.

There are several reasons why business planning is of great importance, such as guiding decision-making, allocating resources, and identifying potential risks and opportunities.

First and foremost, business planning helps organizations in setting realistic goals and determining the best strategies to achieve them. It provides a roadmap for the future that enables executives and managers to make informed decisions based on available data and market trends.

Additionally, business planning is a critical tool for allocating resources and ensuring that they are used efficiently.

By analyzing financial data and identifying areas of potential wastage, organizations can reduce costs and increase profitability.

Furthermore, business planning is an effective means of identifying potential risks and opportunities that an organization may face.

By conducting a thorough analysis of internal and external factors that may impact the business, organizations can develop contingency plans to mitigate risks and capitalize on opportunities.

Another essential aspect of business planning is that it enables organizations to monitor and measure their progress.

Through the use of key performance indicators (KPIs), organizations can track their performance against set objectives and make adjustments where necessary.

This helps to ensure that the organization is on track towards achieving its goals and that everyone within the organization is working towards the same objectives.

Moreover, business planning is a critical tool for securing external funding. Investors and lenders are more likely to invest in organizations that have a well-defined strategy and a clear understanding of their market and industry.

In conclusion, business planning is a critical activity for any organization that wants to thrive in a competitive marketplace.

It provides a framework for decision-making, resource allocation, risk management, and measuring progress. Without a solid business plan, organizations are likely to struggle to achieve their goals, make efficient use of their resources, and identify potential risks and opportunities.

Therefore, it is crucial for organizations to invest time and resources into developing a comprehensive and realistic business plan that reflects their unique strengths, weaknesses, and objectives.

Purpose Of Business Planning

Business planning is a critical aspect of establishing a successful business. The purpose of business planning is to outline the objectives, strategies, and steps necessary to achieve those objectives.

This process involves creating a roadmap for the future of the business, identifying potential obstacles and opportunities, and developing tactics to overcome or leverage them.

Business planning is essential for potential investors, as it provides an overview of the company’s goals and how they plan to achieve them. It also allows for more effective decision-making, as it provides a framework for assessing whether or not certain decisions align with the company’s overall goals.

Similarly, business planning is critical for internal stakeholders, as it helps to establish a shared vision and objective for the company, as well as the roadmap for achieving it.

Ultimately, business planning is a vital tool for any business owner or entrepreneur looking to establish a thriving enterprise in today’s complex and competitive market.

Key Elements Of Business Planning

Executive summary.

The executive summary is a critical component of any business plan, providing a concise yet comprehensive summary of the key elements of the plan.

It should provide a clear and compelling overview of the business, highlighting its unique value proposition, target market, competitive advantages, and key strategies for success.

Key financial projections should also be included, providing investors and other stakeholders with a clear understanding of the anticipated risks and rewards associated with the venture.

The executive summary should be written in a clear and concise manner, using language that is both easy to understand and engaging to the reader.

It should be designed to capture the attention of potential investors, lenders, or other stakeholders, providing them with a clear understanding of the business and its potential for success.

Market Analysis Of Business Planning

The Market Analysis section of a business plan is a crucial component that provides a thorough analysis of the target market, industry trends, competition, and customer base.

This subsection should focus on the target market’s size, demographics, and psychographics, including their purchasing habits, preferences, and behaviors.

The assessment of industry trends involves investigating the direction of the market, identifying opportunities, and assessing the impact of external factors such as economic conditions and government regulations.

The section on competition analysis must provide a detailed analysis of direct and indirect competitors, including their strengths, weaknesses, and market share.

This information can be obtained through the use of surveys, online research, and networking. The subsection should also assess the customer base, including market segmentation, potential growth, and loyalty.

Moreover, the subsection should include a SWOT analysis that examines the strengths, weaknesses, opportunities, and threats of the company.

The analysis should focus on the potential challenges faced by the company as well as the opportunities that can be leveraged to achieve success.

This analysis provides an insight into the company’s competitive position and helps identify areas where the company can improve.

Overall, the Market Analysis section is critical for any business plan as it provides a well-rounded understanding of the target market, industry trends, and competitive landscape.

The information provided in this section can be used to develop a sound business strategy and make informed decisions that drive the company’s success.

Company Description Of A Business Plan

The Company Description subsection of a business plan provides an overview of the company and its history, current status, and future prospects.

It should detail what the company does, what sets it apart from competitors, and how it intends to achieve success. A well-crafted company description should also communicate the company’s core values, mission statement, and vision for the future.

It is important to include any relevant company history and milestones as well as any notable achievements, partnerships, or industry awards.

Additionally, a clear explanation of the management team’s experience and qualifications, including their education, certifications, and industry experience, is essential to demonstrate the company’s capacity to succeed.

Furthermore, the products or services offered by the company and how they meet the needs and desires of customers should also be emphasized.

Overall, a concise and compelling company description sets the foundation for the rest of the business plan and conveys a sense of confidence and expertise to potential investors and stakeholders.

Organization And Management

The Organization and Management subsection is crucial in any business plan as it highlights the structure, roles, and responsibilities of the key personnel who will be at the helm of the organization.

The success of any business is largely dependent on the capabilities of the people managing it.

Therefore, it is essential to outline the experience and expertise of each member of the management team. This subsection should also provide clear information on the ownership structure of the organization, including the distribution of shares or ownership percentages.

It is important to highlight any legal or regulatory requirements that the management needs to fulfill to operate the business effectively.

Additionally, the subsection should explain the key operational and administrative functions, as well as any external professional services that will be necessary to ensure the smooth running of the business.

Service Or Product Line

Service or Product Line is a crucial section of a business plan that outlines the products or services a company intends to offer.

This section must describe the key attributes of the product or service, including its unique features, the target market, and what sets it apart from competitors.

Additionally, this section must touch on the production process and costs, as well as the pricing strategy the company will use to ensure that the product or service is profitable.

A successful business plan must ensure that its offerings add value to the target market and adapt accordingly by conducting market research, understanding the competition, and leveraging innovation to create new and improved products.

Marketing And Sales Of A Business Plan

The Marketing and Sales subsection of a business planning document is designed to outline the strategies that will be used to promote and sell a company’s product or service.

This section should include a market analysis and an explanation of how the company plans to differentiate itself from competitors. The marketing plan should identify target customers, their needs, and the benefits that the product or service will provide.

The sales plan should identify the distribution channels that will be used, as well as the pricing model and the sales team structure.

Additionally, this section should identify any marketing and sales metrics that will be used to measure success, such as conversion rates and lead generation.

It is crucial for companies to have a comprehensive marketing and sales plan in place to ensure that they are able to effectively reach their target audience and drive revenue growth.

Funding Request Of A Business Plan

The Funding Request subsection of a business plan is where the entrepreneur explains their financial needs to potential investors or lenders. This section starts with the amount of money required and how it will be utilized, such as for inventory, facilities, or equipment.

The business owner must provide an accurate estimate of the total costs involved, including monthly expenses and projected revenues.

It is also essential to explain how the funding request will affect the company’s financial position and how it will help achieve the specified goals.

Sometimes, entrepreneurs may need to explain their willingness to give up a portion of their company’s ownership to secure financing.

The funding request should be provided with detailed financial statements and projections to support the proposal.

Moreover, entrepreneurs should also specify the repayment schedule and interest rates if they are looking for loans.

The objective is to persuade potential investors or lenders that the proposed investment is feasible, and the revenue from the company is likely to provide a satisfactory return on investment within an acceptable time frame.

A well-written and researched funding request inspires confidence in potential investors or lenders and increases the entrepreneur’s chance of securing the necessary funds.

Importance Of Financial Projections In Business Plan

The subsection Financial Projections is a crucial aspect of any business plan. It entails forecasting the financial outcomes of the proposed business operations.

Financial projections encompass several critical elements, including income statements, cash flow statements, and balance sheets.

Accurately projecting financial outcomes is vital for securing funding from investors and financial institutions.

Furthermore, it is a critical tool for managing resources, making critical financial decisions, and monitoring day-to-day financial activities.

When preparing financial projections, it is essential to consider various factors that might influence the outcomes, such as market trends, competition, industry regulations, and other economic indicators.

One critical element that should not be overlooked is setting realistic goals and timelines for achieving the forecasted outcomes.

Additionally, it is essential to prepare alternative scenarios to gauge the impact of unforeseen events on the business’s financial health.

Overall, the Financial Projection subsection provides insights into the potential financial performance of the business and enables entrepreneurs to develop a well-informed roadmap for success.

Appendix Section In A Business Plan

The Appendix section is an optional section that can be included in a business plan. This section provides space to include any additional information that investors or lenders may find useful in evaluating the business plan.

The Appendix can be used to include resumes of key personnel, product or service brochures, legal documents, and any other relevant information that supports the business plan.

It is important to remember that the Appendix should not be used to include information that should be in other sections, but rather to include supplementary information that adds value to the overall plan.

Steps In Business Planning

Step 1: research and analysis.

A crucial step in creating a successful business plan is conducting thorough research and analysis. This step involves collecting and analyzing relevant data from various sources, such as industry reports, customer surveys, and competitor analysis.

The purpose of this research is to gain a deep understanding of the market, identify potential customers, and evaluate market trends and changes.

Analyzing the data collected enables entrepreneurs to identify opportunities and potential threats that their business may face.

Additionally, this step involves evaluating the resources required to establish and run the business, including understanding the costs associated with acquiring and retaining customers, product development, and distribution.

One of the essential factors to consider during the research and analysis stage is the target market. It is important to identify the audience who would be interested in the product or service offered by the business.

Identifying the target market helps entrepreneurs to evaluate the size of the market, the preferences of their potential customers, and the most effective marketing strategies.

Moreover, research provides entrepreneurs with an understanding of customer spending habits and the overall demand for the product.

This knowledge enables entrepreneurs to tailor their business plan to meet the needs of the target market and increase the likelihood of success.

Another critical aspect of the research and analysis stage is evaluating the competition. An analysis of the existing businesses in the industry helps entrepreneurs identify potential rivals.

It also provides insights into the strengths and weaknesses of competitors, their marketing strategies, and the types of products or services they offer.

This information empowers entrepreneurs to develop unique value propositions and competitive advantages that will differentiate their business from others in the market.In summary, research and analysis are the foundation of a successful business plan.

It provides entrepreneurs with a clear understanding of the market, target audience, and competition.

This information enables entrepreneurs to create a comprehensive plan that outlines the steps required to establish and run a profitable business.

Conducting thorough research and analysis is essential to increase the chances of success and minimize the risks associated with starting a new business.

Step 2: Develop A Strategic Plan

The second step in the business planning process is to develop a strategic plan. This is a critical step that involves identifying goals and objectives for the company, as well as the strategies and tactics that will be used to achieve them.

A strategic plan should include a detailed analysis of the company’s strengths, weaknesses, opportunities, and threats. This information can be obtained through market research, customer surveys, and other methods.

Once this analysis is complete, the company can begin to develop a plan for achieving its goals. This should include a detailed description of the company’s products or services, its target market, and its competitors.

It should also include a plan for marketing and sales, as well as financial projections for the next few years.

An important component of the strategic plan is the identification of key performance indicators (KPIs) that will be used to measure the success of the plan.

These KPIs should be specific and measurable, and should be reviewed regularly to ensure that the plan is on track.

The strategic plan should also consider the company’s resources, including its human capital, financial resources, and technological infrastructure. It should identify any gaps in these resources and make recommendations for how they can be filled.

Ultimately, the strategic plan should be a living document that is reviewed and updated regularly. As the company grows and changes, the plan should be adjusted accordingly to ensure that it remains relevant and effective.

Step 3: Create A Business Plan

Step 4: implement the plan.

The actual implementation of a business plan involves executing each step of the strategy. The effectiveness of the plan heavily relies on the satisfaction of the plan’s objectives, the use of realistic timelines, and the deployment of adequate resources.

The business’ management will need to generate functional plans to ensure that resources are allocated optimally. Timelines must also be established for every step of the process to monitor progress and adjust the plan if necessary.

Good communication with all stakeholders is essential to successful implementation. The plan must be communicated to all employees, contractors, and vendors.

The resources, including personnel and funding, must be aligned with the plan. Efficient coordination is necessary to ensure that everyone is working towards the same end goal.

Performance measurement is crucial, as adjustment to the plan may be necessary to achieve the intended outcomes.

Technology and software may also be necessary in executing specific strategies, which should be included in the plan.

Addressing challenges and roadblocks along the way may also require flexible thinking and adapting the plan accordingly.

Therefore, the process of implementing a business plan involves evaluating the plan’s success and adaption of the plan to current business operations.

By successfully implementing the plan, the business can achieve its desired outcome and ultimately achieve its end goal.

Step 5: Monitor And Review

After implementing a business plan, monitoring and reviewing are crucial steps to ensure success. This stage is vital because it allows a business owner to determine if their strategies are working effectively or if changes need to be made.

It is an opportunity to observe the strengths and weaknesses of a business, discover any financial or operational problems, and measure progress toward established goals.

Monitoring includes tracking financial performance, sales figures, production levels, and customer satisfaction rates.

Reviewing involves analyzing the data gathered from monitoring activities and implementing changes to improve the business.

Monitoring and reviewing also help with business planning, providing entrepreneurs with a basis for decision-making.

Ongoing tracking and analysis can identify potential areas of growth, new opportunities, and potential risks.

Keeping current with industry trends, competitive analysis, and customer feedback can be included in the monitoring and review process.

By identifying and addressing challenges, a business can stay ahead of the competition and improve operations, products, and services.

Regular reviews act as a preventative measure for changes in the market or industry. Real-time optimization can be applied to marketing campaigns, cost structures, sales techniques, and more.

By consistently monitoring and reviewing, a business owner can take immediate corrective action instead of waiting until it’s too late.

Additionally, reviewing allows for continual improvement by providing insight into potential opportunities for growth and increased profitability.

A monitoring and review system should be established as part of the overall plan. This should include setting benchmarks and metrics, as well as scheduling regular reviews of progress toward established goals.

Once the system is in place, the focus should shift towards utilizing data gathered from monitoring and review activities.

This data should be analyzed, identifying areas that require changes and taking action to implement those changes.

In conclusion, monitoring and reviewing are important elements to ensure the continued success of a business.

Through monitoring and reviewing activities, entrepreneurs can gain a better understanding of their business operations and optimize accordingly.

By utilizing data and implementing changes, businesses can ensure long-term profitability and sustainable growth.

Types Of Business Plans

Startup business plan.

A startup business plan is an essential document that outlines the road map for a new business venture.

It is a comprehensive document that typically includes an executive summary, market analysis, company description, product or service offerings, marketing and sales strategies, financials, and a timeline.

The purpose of the business plan is to help entrepreneurs map out their goals and objectives, identify potential roadblocks, and develop strategies to overcome them.

By creating a startup business plan, entrepreneurs can gain a better understanding of their customers, competitors, and market trends.

In addition, they can use the plan to secure funding from investors or financial institutions, to communicate their vision to potential employees, and to develop a clear and concise strategy for scaling the business.

A well-crafted startup business plan is a crucial component of launching a successful new business venture.

Internal Business Plan

The Internal Business Plan is a critical component of the overall business plan. It outlines the internal strategies and tactics that a company will use to achieve its objectives.

This plan is developed by the management team and guides the day-to-day operations of the company. The Internal Business Plan addresses the company’s marketing, operations, financial, and human resources objectives.

A key part of the plan is developing a clear understanding of the company’s competitive advantage and how it will use this advantage to successfully compete within the marketplace.

The Internal Business Plan is also used to assess the company’s progress toward its goals and to make adjustments to the plan as needed.

This plan is different from the Strategic Business Plan which addresses the direction and overall vision of the company, while the Internal Business Plan is focused on the day-to-day operations.

A successful Internal Business Plan is critical to any start-up business as it provides a roadmap for the company to follow and helps create a culture of accountability and focus on achieving the company’s objectives.

Strategic Business Plan

A strategic business plan is a vital component of any successful business. It outlines a company’s overall direction, goals, and objectives over the long term.

A strategic business plan is not just a document, but rather a roadmap that guides a company’s decision-making processes.

It involves conducting a thorough analysis of a company’s market, competition, resources, and capabilities to create a unique value proposition.

The strategic business plan enables a company to position itself in the market and differentiate itself from competitors. The plan should also outline specific actions that need to be taken to achieve the desired objectives.

The strategic business plan typically includes the mission statement, which defines the company’s purpose, values, and culture.

It should also identify the target market and customer segments, as well as the channels and strategies used to reach them.

The plan should also analyze the competitive landscape, identifying strengths, weaknesses, opportunities, and threats (SWOT) to the business.

One of the critical components of a strategic business plan is setting clear and measurable goals and objectives over the long term.

These should be specific, measurable, achievable, relevant, and time-bound (SMART). The goals and objectives should align with the company’s mission statement and vision, and support the overall strategy.

The strategic plan should also outline the tactics and actions that will be taken to achieve these goals, as well as the timeline and resources required.

Another important element of a strategic business plan is the financial plan. This should include a detailed budget, sales forecast, cost of goods sold, cash flow projection, and profit and loss statement.

The financial plan should also consider contingencies and risk management strategies.

A well-executed strategic business plan can significantly benefit a company’s growth and success.

It provides a clear roadmap for decision-making, enabling a company to make informed and strategic choices.

It also helps to align all stakeholders around a common vision and direction, which can improve employee engagement and motivation.

Finally, a strategic business plan enhances a company’s credibility and reputation, which can attract investors, customers, and partners.

Operations Business Plan

The Operations Business Plan is a crucial component of any business plan, as it details the necessary steps to achieve operational efficiency and success.

This subsection focuses on the day-to-day running of the business, outlining the processes and procedures that will be followed, including production, logistics, inventory management, customer service, and more.

A well-crafted Operations Business Plan should provide clear guidance on how the company will meet its goals, reduce costs, and optimize processes.

One of the key elements of an Operations Business Plan is the production plan, which outlines the processes and resources needed to manufacture products or deliver services to customers.

This plan should include production schedules, quality control measures, and contingency plans in case of unexpected delays or problems.

Additionally, inventory management is crucial to ensure that the business has the appropriate amount of goods on hand, minimizing waste and avoiding shortages.

Another important aspect of an Operations Business Plan is logistics, covering the transport of goods and services from the company to the customers.

Logistics might include shipping, delivery, or other transportation-related activities that can affect the efficiency and effectiveness of the business.

Customer service is also a critical component, ensuring that customers feel valued and satisfied with their interactions with the company.

Efficient operation requires effective management, and an Operations Business Plan should outline the organizational structure of the company, including roles and responsibilities of staff members.

Clear communication and collaboration among team members are essential to ensuring that the business runs smoothly and effectively.

Overall, a well-conceived Operations Business Plan is a fundamental component of an effective business plan.

By addressing the day-to-day operations and processes needed for a business to function, this plan helps ensure that the company can operate effectively, minimize waste, and achieve its goals.

Feasibility Business Plan

One of the most critical components of a successful business launch is creating a feasibility business plan.

This type of plan focuses on determining whether a business idea is practical and worth pursuing.

At its core, a feasibility plan looks at the market demand for a product or service, analyzes the competition, examines potential revenue streams, and evaluates the resources required to bring the idea to fruition.

The plan should also outline the risks and challenges associated with the business, as well as any legal and regulatory considerations that may impact its viability.

During the feasibility analysis, entrepreneurs should identify their target audience and understand their behavior and needs.

This analysis is crucial in determining the market demand for the product or service. At the same time, businesses must determine how they will differentiate themselves from the competition.

It’s important to analyze your competition’s strengths and weaknesses, identify opportunities, and determine how to leverage them to create a competitive advantage.

Another critical aspect of the feasibility analysis is identifying potential revenue streams. Businesses need to consider the various ways they can generate income and determine which ones are the most viable.

They should also consider potential expenses, such as marketing and advertising, rent, utilities, and employee salaries.

Once revenue and expenses have been identified, businesses can create financial projections to determine their profitability and whether their business idea is economically sound.

Resource allocation is another essential consideration in a feasibility business plan. Entrepreneurs need to determine what resources they will require to launch and sustain their business.

This includes financial resources, such as startup capital and ongoing funding, as well as human resources, such as employees and contractors.

Businesses must also consider the resources required for production, such as equipment, raw materials, and supplies.

Finally, it’s essential to identify and understand the risks and challenges associated with launching and running a business.

This includes legal and regulatory concerns, such as permits and licenses, as well as other challenges, such as technological advancements or changes in the market.

By identifying and evaluating these risks, businesses can create contingency plans and ensure they have the resources and expertise needed to overcome potential obstacles.

In conclusion, creating a feasibility business plan is an essential first step in launching a successful business.

It provides a comprehensive overview of the business idea, evaluating its potential and risks, and determines whether it is a sound investment.

By conducting a thorough analysis of the market demand, competition, potential revenue streams, resource allocation, and risk and challenges, entrepreneurs can make an informed decision and pursue their business idea with a greater level of confidence and success.

Growth Business Plan

Growth Business Plan is a vital component for businesses that have survived their initial stages and are looking to scale up their operations.

This type of plan focuses on strategies that can be implemented to facilitate growth and increased profitability.

One of the primary concerns of a Growth Business Plan is identifying new areas for expansion, such as new products, markets, or services.

It also involves assessing current operations to determine how they can be optimized and scaled efficiently.

The first step to creating a Growth Business Plan is conducting a market analysis to gain a comprehensive understanding of industry trends, consumer demands, and emerging opportunities.

This involves collecting and analyzing data from various sources such as industry reports, competitor analysis, and consumer feedback.

The goal is to identify untapped markets, potential partnerships, and new revenue streams that can be leveraged to facilitate growth.

The second step is to assess the existing organizational structure to determine if changes need to be made to support growth.

This includes hiring additional staff, expanding the physical infrastructure, or investing in new technology.

A comprehensive growth strategy must also address potential risks and challenges that may arise during the scaling process, such as changes in consumer behavior, supply chain disruptions, or regulatory changes.

Another critical aspect of a Growth Business Plan is financial planning. This involves conducting a financial analysis of the company’s operations to identify areas where cost savings can be realized and new revenue streams can be generated.

The plan must also include a detailed financial forecast that outlines revenue projections, cash flow forecasts, and budgets for capital expenditures.

Ultimately, a successful Growth Business Plan must articulate a clear and comprehensive strategy that establishes a roadmap for scaling up operations while maintaining profitability.

The plan must be flexible enough to adapt to changes in the market, consumer behavior, or the regulatory environment while also being prudent in managing risks associated with growth.

Clear communication of the plan to all the stakeholders of the business is necessary for flawless execution of the expansion efforts.

Exit Business Plan

One important aspect of business planning that is often overlooked is the Exit Business Plan. This subsection of a business plan outlines the steps that the company will take in the event that it needs to close down or be sold.

This can be an important consideration for investors and stakeholders, as it can help them understand the potential risks and rewards associated with their investment.

The Exit Business Plan should include a thorough analysis of the company’s financials, including any outstanding debts or liabilities, as well as projections for future revenue and expenses.

It should also outline the company’s strategy for selling its assets or winding down its operations, including any legal or regulatory considerations that may come into play.

Another important aspect of the Exit Business Plan is succession planning. This involves identifying key personnel who will be responsible for ensuring a smooth transition in the event of an exit, and outlining their roles and responsibilities.

It may also involve identifying potential buyers or partners who could take over the company, and developing a strategy for negotiating a sale or merger.

Ultimately, the purpose of the Exit Business Plan is to minimize risk and maximize value for all stakeholders involved.

By planning for the possibility of an exit from the outset, companies can be better prepared to handle unforeseen circumstances and minimize the potential impact on their investors and employees.

Summary Of Business Planning

Business planning is an essential component of any successful enterprise. It serves as a roadmap for achieving business objectives, providing a framework for decision-making, and establishing accountability.

Through the process of business planning, a company can identify its strengths and weaknesses, capitalize on opportunities, and mitigate risks.

When developing a business plan, it is essential to consider a variety of factors, such as market trends, competitive analysis, financial projections, and growth strategies.

Although it can be challenging to predict the future, a comprehensive business plan can help a company navigate the uncertainties of the marketplace, establish credibility with stakeholders, and secure funding.

The process of creating a business plan can also reveal gaps in knowledge or resources, providing an opportunity for further research or collaboration.

As businesses continue to evolve and adapt to changing market conditions, a robust business plan can serve as a foundation for future growth and success.

Future Outlook Of Business Planning

The future of business planning is promising and exciting. As technology continues to advance, businesses are able to gather more data and better understand their customers, which can inform their strategic planning.

With the increasing use of artificial intelligence and machine learning, businesses can gather insights faster and with greater accuracy. This allows for more precise forecasting and strategic decision-making.

Another relevant trend is the growing popularity of sustainability-focused business planning. Many companies are recognizing the importance of sustainability, given the impact of climate change and the increasing demand for sustainable products and services.

This approach to planning involves looking beyond short-term profits and considering the long-term impact of a business’s actions on the environment and society.

Moreover, the trend toward remote work and decentralized teams is changing how businesses approach planning. Virtual collaboration tools, such as video conferencing and online project management platforms, have made it easier for teams to work effectively from anywhere in the world.

This allows businesses to tap into talent pools globally, which can lead to more diverse and innovative ideas.

Finally, the future of business planning involves adapting to the changing needs of customers, who are increasingly looking for personalized and convenient experiences. Businesses that can offer this are likely to thrive, while those that fail to adapt may fall behind.

This means incorporating customer feedback into planning and investing in technologies, such as chatbots and personalization engines, that can help businesses provide more targeted and relevant experiences to their customers.

Implementing Recommendations

After conducting a thorough examination of Business Planning, it is clear that several recommendations must be made to ensure successful implementation of a business plan.

Firstly, businesses must ensure that every employee is included in the planning process. All departments within the company must have clear communication channels, as collaboration is essential to the success of the plan.

Secondly, businesses should regularly collect and analyze data relevant to their operations. This data can be used to improve and adjust plans as necessary.

Thirdly, businesses must regularly review their business plans and make necessary alterations to keep their plan relevant and up-to-date.

Finally, businesses should always have contingency plans in place. This will help them prepare for unexpected circumstances and better navigate potential risks.

In conclusion, businesses must remain flexible and adaptable in their planning to achieve success, and implementation of the above recommendations will enable them to do so.

Business Planning: FAQs

1. what is business planning.

Business Planning is the process of creating a roadmap for a business’s future. It comprises various steps, including identifying company objectives, conducting a market analysis, determining financial projections, and outlining strategies to achieve goals.

2. Who Needs A Business Plan?

Business planning is essential for any business, irrespective of its size, stage of operations, or industry. Entrepreneurs, startups, and established businesses that want to scale their operations and increase their profitability require a comprehensive and well-structured business plan.

3. Why Is Business Planning Important?

It ensures that a business has a clear direction and vision, helps identify potential opportunities, mitigates challenges, and reduces risks. Furthermore, it plays a crucial role in securing financing, attracting investors, and keeping the organization focused and accountable for its actions.

4. What Should My Business Plan Include?

A comprehensive business plan should include an executive summary, company overview, market analysis, products and services description, marketing and sales strategy, financial projections, organization structure, and operational plan.

5. How Often Should I Update My Business Plan?

Business plans aren’t static documents and should be updated regularly to reflect changes in the market, business evolution, and goals. A business plan should be reviewed annually and updated as needed to ensure that it remains effective and relevant.

6. Can I Write My Own Business Plan?

Yes, although it may be challenging to develop a comprehensive and effective business plan without prior experience. However, there are several resources and tools available, including templates, guides, software, or seeking the services of a business consultant.

Learn how to make passive income online

I've put together a free training on *How We Used The Brand New "Silver Lining Method" To Make $3k-$10k/mo (profit) With Just A Smart Phone In As Little As 8 Weeks …

About the author 

Mike Vestil

Mike Vestil is an author, investor, and speaker known for building a business from zero to $1.5 million in 12 months while traveling the world.

Session expired

Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.

Table of Contents

What is a business plan, the advantages of having a business plan, the types of business plans, the key elements of a business plan, best business plan software, common challenges of writing a business plan, become an expert business planner, business planning: it’s importance, types and key elements.

Every year, thousands of new businesses see the light of the day. One look at the  World Bank's Entrepreneurship Survey and database  shows the mind-boggling rate of new business registrations. However, sadly, only a tiny percentage of them have a chance of survival.   

According to the Bureau of Labor Statistics, about 20% of small businesses fail in their first year, about 50% in their fifth year.

Research from the University of Tennessee found that 44% of businesses fail within the first three years. Among those that operate within specific sectors, like information (which includes most tech firms), 63% shut shop within three years.

Several  other statistics  expose the abysmal rates of business failure. But why are so many businesses bound to fail? Most studies mention "lack of business planning" as one of the reasons.

This isn’t surprising at all. 

Running a business without a plan is like riding a motorcycle up a craggy cliff blindfolded. Yet, way too many firms ( a whopping 67%)  don't have a formal business plan in place. 

It doesn't matter if you're a startup with a great idea or a business with an excellent product. You can only go so far without a roadmap — a business plan. Only, a business plan is so much more than just a roadmap. A solid plan allows a business to weather market challenges and pivot quickly in the face of crisis, like the one global businesses are struggling with right now, in the post-pandemic world.  

But before you can go ahead and develop a great business plan, you need to know the basics. In this article, we'll discuss the fundamentals of business planning to help you plan effectively for 2021.  

Now before we begin with the details of business planning, let us understand what it is.

No two businesses have an identical business plan, even if they operate within the same industry. So one business plan can look entirely different from another one. Still, for the sake of simplicity, a business plan can be defined as a guide for a company to operate and achieve its goals.  

More specifically, it's a document in writing that outlines the goals, objectives, and purpose of a business while laying out the blueprint for its day-to-day operations and key functions such as marketing, finance, and expansion.

A good business plan can be a game-changer for startups that are looking to raise funds to grow and scale. It convinces prospective investors that the venture will be profitable and provides a realistic outlook on how much profit is on the cards and by when it will be attained. 

However, it's not only new businesses that greatly benefit from a business plan. Well-established companies and large conglomerates also need to tweak their business plans to adapt to new business environments and unpredictable market changes. 

Before getting into learning more about business planning, let us learn the advantages of having one.

Since a detailed business plan offers a birds-eye view of the entire framework of an establishment, it has several benefits that make it an important part of any organization. Here are few ways a business plan can offer significant competitive edge.

• Sets objectives and benchmarks: Proper planning helps a business set realistic objectives and assign stipulated time for those goals to be met. This results in long-term profitability. It also lets a company set benchmarks and Key Performance Indicators (KPIs) necessary to reach its goals. 
• Maximizes resource allocation: A good business plan helps to effectively organize and allocate the company’s resources. It provides an understanding of the result of actions, such as, opening new offices, recruiting fresh staff, change in production, and so on. It also helps the business estimate the financial impact of such actions.
• Enhances viability: A plan greatly contributes towards turning concepts into reality. Though business plans vary from company to company, the blueprints of successful companies often serve as an excellent guide for nascent-stage start-ups and new entrepreneurs. It also helps existing firms to market, advertise, and promote new products and services into the market.
• Aids in decision making: Running a business involves a lot of decision making: where to pitch, where to locate, what to sell, what to charge — the list goes on. A well thought-out business plan provides an organization the ability to anticipate the curveballs that the future could throw at them. It allows them to come up with answers and solutions to these issues well in advance.
• Fix past mistakes: When businesses create plans keeping in mind the flaws and failures of the past and what worked for them and what didn’t, it can help them save time, money, and resources. Such plans that reflects the lessons learnt from the past offers businesses an opportunity to avoid future pitfalls.
• Attracts investors: A business plan gives investors an in-depth idea about the objectives, structure, and validity of a firm. It helps to secure their confidence and encourages them to invest. 

Now let's look at the various types involved in business planning.

Become a Business and Leadership Professional

• Top 10 skills in demand Business Analysis As A Skill In 2020
• 14% Growth in Jobs Of Business Analysis Profile By 2028

Business Analyst

• Industry-recognized certifications from IBM and Simplilearn
• Masterclasses from IBM experts

Post Graduate Program in Business Analysis

• Certificate from Simplilearn in collaboration with Purdue University
• Become eligible to be part of the Purdue University Alumni Association

Here's what learners are saying regarding our programs:

Assistant Consultant at Tata Consultancy Services , Tata Consultancy Services

My experience with Simplilearn has been great till now. They have good materials to start with, and a wide range of courses. I have signed up for two courses with Simplilearn over the past 6 months, Data Scientist and Agile and Scrum. My experience with both is good. One unique feature I liked about Simplilearn is that they give pre-requisites that you should complete, before a live class, so that you go there fully prepared. Secondly, there support staff is superb. I believe there are two teams, to cater to the Indian and US time zones. Simplilearn gives you the most methodical and easy way to up-skill yourself. Also, when you compare the data analytics courses across the market that offer web-based tutorials, Simplilearn, scores over the rest in my opinion. Great job, Simplilearn!

I was keenly looking for a change in my domain from business consultancy to IT(Business Analytics). This Post Graduate Program in Business Analysis course helped me achieve the same. I am proficient in business analysis now and am looking for job profiles that suit my skill set.

Business plans are formulated according to the needs of a business. It can be a simple one-page document or an elaborate 40-page affair, or anything in between. While there’s no rule set in stone as to what exactly a business plan can or can’t contain, there are a few common types of business plan that nearly all businesses in existence use.  

Here’s an overview of a few fundamental types of business plans. 

• Start-up plan: As the name suggests, this is a documentation of the plans, structure, and objections of a new business establishments. It describes the products and services that are to be produced by the firm, the staff management, and market analysis of their production. Often, a detailed finance spreadsheet is also attached to this document for investors to determine the viability of the new business set-up.
• Feasibility plan: A feasibility plan evaluates the prospective customers of the products or services that are to be produced by a company. It also estimates the possibility of a profit or a loss of a venture. It helps to forecast how well a product will sell at the market, the duration it will require to yield results, and the profit margin that it will secure on investments. 
• Expansion Plan: This kind of plan is primarily framed when a company decided to expand in terms of production or structure. It lays down the fundamental steps and guidelines with regards to internal or external growth. It helps the firm to analyze the activities like resource allocation for increased production, financial investments, employment of extra staff, and much more.
• Operations Plan: An operational plan is also called an annual plan. This details the day-to-day activities and strategies that a business needs to follow in order to materialize its targets. It outlines the roles and responsibilities of the managing body, the various departments, and the company’s employees for the holistic success of the firm.
• Strategic Plan: This document caters to the internal strategies of the company and is a part of the foundational grounds of the establishments. It can be accurately drafted with the help of a SWOT analysis through which the strengths, weaknesses, opportunities, and threats can be categorized and evaluated so that to develop means for optimizing profits.

There is some preliminary work that’s required before you actually sit down to write a plan for your business. Knowing what goes into a business plan is one of them. 

Here are the key elements of a good business plan:

• Executive Summary: An executive summary gives a clear picture of the strategies and goals of your business right at the outset. Though its value is often understated, it can be extremely helpful in creating the readers’ first impression of your business. As such, it could define the opinions of customers and investors from the get-go.  
• Business Description: A thorough business description removes room for any ambiguity from your processes. An excellent business description will explain the size and structure of the firm as well as its position in the market. It also describes the kind of products and services that the company offers. It even states as to whether the company is old and established or new and aspiring. Most importantly, it highlights the USP of the products or services as compared to your competitors in the market.
• Market Analysis: A systematic market analysis helps to determine the current position of a business and analyzes its scope for future expansions. This can help in evaluating investments, promotions, marketing, and distribution of products. In-depth market understanding also helps a business combat competition and make plans for long-term success.
• Operations and Management: Much like a statement of purpose, this allows an enterprise to explain its uniqueness to its readers and customers. It showcases the ways in which the firm can deliver greater and superior products at cheaper rates and in relatively less time. 
• Financial Plan: This is the most important element of a business plan and is primarily addressed to investors and sponsors. It requires a firm to reveal its financial policies and market analysis. At times, a 5-year financial report is also required to be included to show past performances and profits. The financial plan draws out the current business strategies, future projections, and the total estimated worth of the firm.

The importance of business planning is it simplifies the planning of your company's finances to present this information to a bank or investors. Here are the best business plan software providers available right now:

• Business Sorter

The importance of business planning cannot be emphasized enough, but it can be challenging to write a business plan. Here are a few issues to consider before you start your business planning:

• Create a business plan to determine your company's direction, obtain financing, and attract investors.
• Identifying financial, demographic, and achievable goals is a common challenge when writing a business plan.
• Some entrepreneurs struggle to write a business plan that is concise, interesting, and informative enough to demonstrate the viability of their business idea.
• You can streamline your business planning process by conducting research, speaking with experts and peers, and working with a business consultant.

Whether you’re running your own business or in-charge of ensuring strategic performance and growth for your employer or clients, knowing the ins and outs of business planning can set you up for success. 

Be it the launch of a new and exciting product or an expansion of operations, business planning is the necessity of all large and small companies. Which is why the need for professionals with superior business planning skills will never die out. In fact, their demand is on the rise with global firms putting emphasis on business analysis and planning to cope with cut-throat competition and market uncertainties.

While some are natural-born planners, most people have to work to develop this important skill. Plus, business planning requires you to understand the fundamentals of business management and be familiar with business analysis techniques . It also requires you to have a working knowledge of data visualization, project management, and monitoring tools commonly used by businesses today.   

Simpliearn’s Executive Certificate Program in General Management will help you develop and hone the required skills to become an extraordinary business planner. This comprehensive general management program by IIM Indore can serve as a career catalyst, equipping professionals with a competitive edge in the ever-evolving business environment.

What Is Meant by Business Planning?

Business planning is developing a company's mission or goals and defining the strategies you will use to achieve those goals or tasks. The process can be extensive, encompassing all aspects of the operation, or it can be concrete, focusing on specific functions within the overall corporate structure.

What Are the 4 Types of Business Plans?

The following are the four types of business plans:

Operational Planning

This type of planning typically describes the company's day-to-day operations. Single-use plans are developed for events and activities that occur only once (such as a single marketing campaign). Ongoing plans include problem-solving policies, rules for specific regulations, and procedures for a step-by-step process for achieving particular goals.

Strategic Planning

Strategic plans are all about why things must occur. A high-level overview of the entire business is included in strategic planning. It is the organization's foundation and will dictate long-term decisions.

Tactical Planning

Tactical plans are about what will happen. Strategic planning is aided by tactical planning. It outlines the tactics the organization intends to employ to achieve the goals outlined in the strategic plan.

Contingency Planning

When something unexpected occurs or something needs to be changed, contingency plans are created. In situations where a change is required, contingency planning can be beneficial.

What Are the 7 Steps of a Business Plan?

The following are the seven steps required for a business plan:

Conduct Research

If your company is to run a viable business plan and attract investors, your information must be of the highest quality.

Have a Goal

The goal must be unambiguous. You will waste your time if you don't know why you're writing a business plan. Knowing also implies having a target audience for when the plan is expected to get completed.

Create a Company Profile

Some refer to it as a company profile, while others refer to it as a snapshot. It's designed to be mentally quick and digestible because it needs to stick in the reader's mind quickly since more information is provided later in the plan.

Describe the Company in Detail

Explain the company's current situation, both good and bad. Details should also include patents, licenses, copyrights, and unique strengths that no one else has.

Create a marketing plan ahead of time.

A strategic marketing plan is required because it outlines how your product or service will be communicated, delivered, and sold to customers.

Be Willing to Change Your Plan for the Sake of Your Audience

Another standard error is that people only write one business plan. Startups have several versions, just as candidates have numerous resumes for various potential employers.

Incorporate Your Motivation

Your motivation must be a compelling reason for people to believe your company will succeed in all circumstances. A mission should drive a business, not just selling, to make money. That mission is defined by your motivation as specified in your business plan.

What Are the Basic Steps in Business Planning?

These are the basic steps in business planning:

Summary and Objectives

Briefly describe your company, its objectives, and your plan to keep it running.

Services and Products

Add specifics to your detailed description of the product or service you intend to offer. Where, why, and how much you plan to sell your product or service and any special offers.

Conduct research on your industry and the ideal customers to whom you want to sell. Identify the issues you want to solve for your customers.

Operations are the process of running your business, including the people, skills, and experience required to make it successful.

How are you going to reach your target audience? How you intend to sell to them may include positioning, pricing, promotion, and distribution.

Consider funding costs, operating expenses, and projected income. Include your financial objectives and a breakdown of what it takes to make your company profitable. With proper business planning through the help of support, system, and mentorship, it is easy to start a business.

Our Business And Leadership Courses Duration And Fees

Business And Leadership Courses typically range from a few weeks to several months, with fees varying based on program and institution.

Get Free Certifications with free video courses

Business and Leadership

Business Analysis Basics

Data Science & Business Analytics

Business Intelligence Fundamentals

Learn from Industry Experts with free Masterclasses

From Concept to Market - How to Excel at Product Management in 2024 with SP Jain Program

Ascend the Product Management Career Ladder in 2024 with UC San Diego

Career Information Session: Find Out How to Become a Business Analyst with IIT Roorkee

Recommended Reads

Business Intelligence Career Guide: Your Complete Guide to Becoming a Business Analyst

Corporate Succession Planning: How to Create Leaders According to the Business Need

Top Business Analyst Skills

Business Analytics Basics: A Beginner’s Guide

Financial Planning for Businesses Across the Globe

How to Become a Business Analyst

Get Affiliated Certifications with Live Class programs

• PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

Go to homepage business.govt.nz business.govt.nz

Business.govt.nz, in association with, planning to do business online.

Whether you ’re setting up a new e-commerce business or shifting online, careful planning can make sure your offer hits the spot. Here’s an intro to doing business online.

Success depends on planning

Planning is the key to setting up a great e-commerce business. You need to define your ideal customers and work out how your products and services are unique.

It’s important to:

• know how you compare to other businesses in the market
• set realistic prices
• check if people really want what you’re selling
• set a budget
• choose where to sell.

Good planning is worth it — it means a higher chance of success.

Define your ideal customers

Build up a picture of your ideal customers to tailor your offer to the people most likely to buy from you.

Start by learning about your real customers, then create customer personas. Personas don’t represent any single customer but help you picture them all clearly when planning your business. Using personas can help you:

• refine your products and services
• engage better with customers and boost sales.

Learn about your existing customers

If you’re already running a business, you might know quite a bit about your customers. Now’s the time to learn more, eg from a chat at the point of sale or in-depth interviews. You could use a survey to ask what your customers want, or what other businesses or products they consider alongside yours.

Observing customers directly can tell you even more about how they behave. You can learn about their lifestyles and buying patterns, about cultural trends, and about the factors that affect their buying behaviour.

Sales data can help. The top 10% of your customers may generate 50% of your revenue, so learning more about them is worthwhile. Other data can give you new insights too.

Learn about your potential customers

If you’re starting a business, delve into what people want from similar e-commerce businesses. Read online reviews, check what products people search for, spot when there’s “buzz” around something new. When setting up a new online store, look at others who have something in common with you. You might learn what their customers care about, the basic things every store offers, and how each store stands out.

If you’re thinking about exporting, you’ll also need to identify a market and find out about customers there. Even if the culture is similar to New Zealand’s, there will be differences. Those differences might not matter much, or they might. Find out if they’ll shape how much people want your products or services:

• Visit the country.
• Talk to people who are likely to become your customers.
• Look at your competition.
• Get expert advice.

Do the research

Create personas

Personas sum up your ideal customers. Once you know more about your different local and over seas customers, organise them into groups. Think about what each group needs and who to target.

Create a persona to represent each group. For example:

• urban professionals aged 40+
• young families struggling to organise busy lives on a budget.

“Young families struggling to organise busy lives on a budget” is not a catchy name. So create a fictional person who represents that group. For example, name that family’s mum Ara and use your insights to decide she works full time with unpredictable shifts. Ara also has to organise her kids for school and sports activities while keeping a keen eye on the household budget.

Add details.

Don’t stop at a basic summary. Fill in the details using insights from surveys, conversations or other customer research. Find out what people like Ara worry about, what they wish for and how they carry out their day-to-day lives. For example, maybe Ara sticks to her budget and doesn’t spend spontaneously on things that catch her eye online. Or maybe Ara saves up for a treat once a week.

Pictures and catchphrases can be a good way to remind you of each persona. These can help you think about other characteristics when tailoring your offer to what customers need. Some business owners post personas on a wall to look at when designing products, pricing and promotions, and working on strategy.

Add detail to your personas

• Busy young mum, lives in Christchurch
• “Thrifty and nifty”… tight budget, gets treats once a week
• Buys clothing twice a year, summer and winter.

Values:  her local community, tech skills

Motivated to: do tasks quickly, save money

Anxious about: wasting her spare time

Represents 25% of my customers and 15% of my sales.

• Urban professional, lives in Auckland
• 50+ with assets, spends spontaneously
• Buys clothing every month, both online and in-store.

Values: good ethical production, brand loyalty

Motivated to: be seen as eco-friendly, support New Zealand made

Anxious about: keeping up with trends

Represents 10% of my customers and 50% of sales.

• University student, lives in Taranaki
• Medium budget, spends enthusiastically
• Buys clothing every season, looks for sale.

Values: hanging out with friends, living life to the fullest

Motivated by: sport,  sharing and inspiring others

Anxious about: authenticity to a cause or movement

Represents 25% of my customers and 20% of my sales.

Understand customer journeys

Building customer personas helps you think about someone’s journey towards buying your product — and craft relevant messages at each step. A customer journey involves four basic steps: researching, shortlisting, choosing and buying. You can also think about:

• what triggers a customer to start researching in the first place
• how you can follow up a sale to encourage loyalty.

These steps can look very different depending on your brand and product, and the market you’re selling in. For example, your customers may:

• carefully compare alternatives online, wanting to see details and specifications
• look out for your latest products and services
• be under pressure and trying to solve a problem with as little fuss or cost as possible.

It’s easier to attract customers if you understand the rational and emotional ways they behave. For example, a customer may need your product to solve a problem, or want it because they aspire to a certain lifestyle. After a sale, customers may move on quickly because their problem is solved. Or they may continue thinking about your brand as they enjoy their purchase. Finding out the specific details of your customer journeys will help you meet their needs with your products and the buying process.

It may help to get professional advice or training to deeply understand customer journeys for your business.

Improve customer journeys

Identify your unique selling point

A unique selling point is whatever sets your business apart from your competitors. It’s a statement that nudges customers to buy your product. You need to answer their ‘Why you?’ question.

A strong unique selling point helps you:

• attract more customers
• build customer loyalty
• outperform your competition.

Unique won’t count for much if you focus on something your customers don’t care about. Think about your ideal customer. Choose which of their needs to solve, or which desires to satisfy. Identify the different stages of your ideal customer’s journey.

Be bold but true

A specific, bold and accurate claim stands out more than a vague statement. For example, you could say your product lasts longer than competitors, rather than just saying you sell high-quality products. 

You might say “Our customers demand the best and that's why they hire us”. If you have a high-quality service that’s reliably faster than your rivals, you could say “The best results — with you by next week.” A claim like this shows you believe in what you do, and are enthusiastic about it.

It’s important to live up to your claims with real-world performance.

Walk the talk

A slogan is one way to get your unique selling point across online. But your actions make or break your unique selling point.

Apply it to all areas of your business, from your returns and exchanges policy to your supply chain. Look at every way your customers encounter you, so your whole business lives up to the claims you make.

Luxury in a moment

Aroha runs a busy cafe that focuses on luxury bagels. They’re delicious and quick to prepare. They have such a good reputation that Aroha’s ready to build an online presence to help her business grow.

To identify her unique selling point, Aroha asks 20 regular customers what they love the most about her bagels. She gets a range of answers, but one thing comes through strong. People love to treat themselves without spending too much of their precious lunch hour in a queue. One customer summed up his experience as ‘quick decadence’.

Aroha decides to build on this unique selling point with improved branding, an online ordering system, and workplace delivery.

She also thinks about related products such as branded keep cups and bagel-shaped lunch boxes. Most importantly, she comes up with a slogan: “Make your workday decadent”.

Start with a basic version

After you research your customers and identify your point of difference, test your assumptions.

Begin your online business with a simple set-up — this is known as your minimum viable product (MVP). It’s the first working version, with just enough features and products to satisfy potential customers and let you collect feedback. Don’t spend a lot of time and money building something perfect, only to launch and find out you’ve misjudged the market.

You won’t reach every potential customer with your minimum viable product. But you’ll test your vision and see if other people share it.

Starting with the minimum viable product may achieve one or more wins:

• Launch your business or idea quickly.
• Test your assumptions. If you are wrong, stop or change track.
• Learn what problems you still need to solve or what features you need to add.
• Understand your customers and what they want.
• Build your reputation.
• Avoid pouring effort and money into something that won’t work.
• Attract investors if your idea is good.

Identify your minimum viable product

Your minimum viable product will depend on what you sell.

For a range of natural beauty products, it might be a single webpage selling a multi-purpose moisturiser. Once you gain a few customers, ask them what other products they most want. Develop your range accordingly and add more products to your online store.

For a new app, it might be a simple prototype with just the core features and no fancy graphics or extras. Or a video with visual mock-ups and a voiceover explaining what the app will do. Even this might be enough to test interest and attract funding.

Your minimum viable product must:

• show enough potential to attract interest
• have enough immediate value that people will use it, buy it, or invest in it
• let you gather feedback that helps you build on your idea.

Think small but have a big vision. Ask yourself:

• What’s your riskiest assumption?
• What’s the minimum you can do to test it?

Click and collect bagels

Aroha starts with the minimum viable product to test her idea of an online bagel business. She opens an online account with a click and collect app. This lets people order bagels from their phone and pick up in store. She tells all her regular customers about it.

For a couple of months, Aroha collects stats on which items people are ordering using the app. When people come in to pick up their orders, she asks:

• how far away they work
• whether they’re interested in a delivery service
• what other café items they’d like to order using the app.

Aroha finds people love being able to order ahead — it gives them more time to enjoy their luxury lunch. And they’d like her to add a greater range of drinks to the app. No one’s interested in the delivery service, so she parks that idea.

Aroha also notices online customers often buy a local brand of cola along with a bagel. She creates a combo deal, with packaging design to match. She creates two prototype designs to test out on her regulars, then gathers feedback on which they like best. She only invests in the new packaging once she’s sure it’s worth it.

Confirm customers need what you sell

Where you sell your product or service can influence who finds it and buys it. Selling online might mean your own e-commerce website, using a shared marketplace such as Trade Me, or both. And different products might target customers in different regions.

Choose your online platform

Use your minimum viable product to check if customers will buy what you want to sell. All new e-commerce business owners should do this type of research. Even if your product is the best in its market, you won’t get far if it’s not what customers need. Spend time learning what problem your customer wants to solve and how your product or service helps them. This will vary from market to market.

Customers also expect other things from any product they buy or service they use. For example, they expect a service to start and finish on time, to be easy to book and pay for, and to put right any problems. Customers might take these features for granted, but not providing them is an instant fail.

Sell something and get feedback. Ask why people bought it and what they think of it, either in person or online. Real customer feedback is worth more than trying to put yourself in the customer’s shoes.

Research existing demand. Explore Google Trends for the keywords people use when looking for what you sell.

Google Trends (external link) — Google

Measure your success. Collate positive and negative feedback, assess how well your business shows up in searches, and examine your website analytics.

Refine your product or service. Use customer feedback and your other research to develop the next version or add more features. Keep building, measuring, and adapting in response to what’s working.

Testing the market

Once Aroha’s sure that people love ordering her bagels online, she creates her own branded website. At first, she keeps the website simple. She invests in a photo shoot of her luxurious bagels and lets people order just these and drinks online, along with bagel gift cards.

Next, Aroha showcases her bagel-shaped lunch boxes. She puts a prototype on her shop counter, and adds a video to her website. She asks people to show interest using an online poll and a feedback form. She also checks they are willing to pay enough that she can cover costs and make a small profit.

Once 100 people show interest, she knows it’s worth producing lunch boxes and selling them online.

Little by little, Aroha adds bagel-related products to her website. By testing the market with each new product, she hopes to slowly grow her local bagel business into a national merchandise sensation.

Understand your marketing mix

Every product has its own mix of characteristics that make up its identity and give it a position in the market. This is often called your marketing mix. Knowing where you, and your competitors, fit into the market is the key to standing out online and winning sales.

One way to look at these characteristics is to break them down into four areas.

Product — what the customer needs from your product or service, how they use it, whether it’s basic or full of features, and how it’s different from competing products.

Place — where customers typically go to buy this type of product, and the advantages or disadvantages of focusing on e-commerce.

Choose where to sell

Price — eg, aiming to be cheapest or charging more because you offer more value.

Promotion — eg the best way to reach the customers you’re targeting, such as choosing the online channel where they’re most likely to see your marketing.

Advertising to online customers

This combination of product, place, price, and promotion is one way to define your marketing mix.

To set your prices, you need to understand your customers, know your competitors, and accurately evaluate what you offer.

Selling online means customers may also learn online about your brand, product, and pricing. This makes it easy for them to compare options. If customers compare your product against a list of competitors, they may pick the cheapest seller they trust. If your product has characteristics that set it apart, customers will expect pricing to match.

The right approach to pricing helps make the most of your business. Setting the right prices for individual products plays a part in your sales numbers, profits, and how people think about your brand.

Your pricing strategy needs to help you find the sweet spot that offers the most value for everyone involved:

• You make money from each sale after accounting for all your costs.
• Your customers can afford your product or service and feel they get value from buying it.
• Your suppliers and other collaborators get value from working with you.

Customers need to discover your product  or service before they can buy it. Promote your business in a place that fits your ideal customers, eg online directories, Google Maps, or social media.

When selling online, you still need to tailor your products and services to where most of your customers are. For example, meet local tastes with products and services that stack up well next to local competitors. And build up your local profile and reputation in the region you want to focus on.

Advertising to online customers  

Selling online means you can focus on where your customers are. Also consider where to locate the rest of your operations. For example, you might want to deliver far and wide, so need access to a fast courier service. Or you might manufacture locally to fit a “buy local” trend or to keep an eye on your processes and quality.

Location, location, location

If you don’t get orders from overseas, great! Just remember that selling overseas is exporting, even if you don’t intend to export. And carrying out a service for someone overseas is exporting too. Check Customs requirements. Think about protecting your intellectual property too, as different countries treat intellectual property differently.

What you need to know about exporting

Set your budget

Setting up online costs money, so set a budget.

As well as costs involved in creating what you sell, consider website fees, design or technical help, and advertising. You’ll likely need the majority of your budget for digital marketing.

Four popular ways to set your budget are:

• spend to cover tasks and achieve objectives
• limit yourself to what feels affordable
• spend based on sales
• spend to match competitors.

Spending to cover tasks and achieve objectives is the most logical method of budgeting, as long as you can get the planning sorted. For example, you might want to identify 200 potential customers, show 300 people a video about your brand on social media, or give an introductory discount on the first 10 sales of your new product.

If you know what you want to achieve, you can set a marketing budget to cover it. For example, making your video might cost $500, and promoting it online to reach 300 viewers might cost a further $60. If the budget looks too steep, you can revise your targets.

Target your marketing dollars on activities that boost your takings the most. You can usually expect:

• up to 80% of revenue from pay-per-click adverts, eg Google Ads
• 40–80% to eventually come from making content easy to find, using search engine optimisation
• 10–30% from email marketing
• 0–10% from social media marketing.

Google Ads are good for a new online business because you see results straight away. You’ll also learn what keywords customers are using to find you, helping you develop your content so you rank higher in search results.

Make web content easy to find

Using Google Ads

Selling other people’s products: dropshipping

You don’t necessarily need a unique product or service to start an online business. It’s possible to make money by offering a select range of other people’s products. You don’t store, handle, or deliver the products — instead you focus on marketing and customer service. This is called dropshipping.

When a customer buys from your online store, the order forwards to your dropshipping supplier. They then package and deliver the product.

You make money by charging customers more for the product than your supplier charges you. Because you don’t have to keep products in stock, it’s a low-cost way to start a business. It can also be a useful addition to an existing business, letting you test customer interest in new products.

Dropshipping is simple in principle, but do your research before you start. You need to make good decisions, such as what to sell and which suppliers to partner with. Read Shopify’s guide to get a good overview.

The ultimate guide to dropshipping (external link) — Shopify

References to specific businesses

At times business.govt.nz refers to specific businesses to make our resources more effective and easier to understand. We do this on the advice of our independent expert partners, including the New Zealand Business Performance Panel. However, we do not endorse any third-party private-sector businesses.

We appreciate your feedback

"Rate this" is required

You must enable JavaScript to submit this form

How to write an operational plan for an online business

Table of Contents

Current position

Opportunities, measuring progress, operate finances effectively with countingup.

To run an online business, you’ll need to set goals and strive to achieve them. An operational plan helps you lay out all of your tasks needed to reach your objectives. The online market can be profitable for businesses, but success relies on your ability to scale up and grow. There are plenty of reasons to be ambitious about your company, but having a plan makes you more likely to be successful.

This guide discusses what you need in an operational plan for your online business, including:

The first section to include in your operational plan is your budget . It is an estimation of money coming into the business and how much you’ll spend. Budgeting allows you to be more aware of your money and only focus your spending on things to create revenue. Set your budget over a specific period – months, quarters or years. 

When you are using a budget, first consider how you can create a surplus – which is when you’re left with more money than expected. That could be a result of more sales than anticipated, for example. Second, think about how to balance your budget – which is meeting all costs. Thirdly, understand how to avoid a deficit, which is when your costs have exceeded your budget. 

A deficit could hurt your ability to continue operating. For example, if your costs go over expectations for the month, you may not have enough for the following month, making you unable to pay a supplier. To be aware of your budget, you can use an accounting tool like Countingup. It’s a current business account with built-in accounting software. The app features cash flow insights, which shares the incoming and outgoing of your business. 

Another section to include in your operational plan, is your business’s current position. It’s essential to be aware of where you are, before moving forward. One way to look at your current position is through SWOT analysis . This method pinpoints your strengths, weaknesses, opportunities and threats.

Even if your business has not been long-running, you can likely see some key strengths. It’s essential to recognise what they are, so you can keep doing what works. For example, suppose you often gather positive customer reviews. In that case, you may decide to encourage more people to fill them out.

Your weaknesses are just as important as your strengths. You’ll likely have business areas to improve through your objectives. Looking at how you operate overall, decide where you’d benefit from change. For example, if you have been on social media for months but still have a low number of followers, then you may want to rethink the content you put out.

As a business, your current position helps you identify key opportunities to take advantage of in future. For example, you could sell an online service and see the potential of VR to improve what you offer customers.

Also, look at possibilities that could become threats to your business. Those might be important to consider when deciding on improvement strategies, as you can set up ways to avoid them. For example, say there’s the threat of a competitor selling a similar product. You can patent your next one so competitors would face repercussions for stealing the design.

The goals of your business can be the primary things your operation is going to achieve for you. This section commits to a vision of where the company is heading in the future. It can include your long-term goals, but it’s just as essential to consider short-term ones. 

Your operational plan can set up short, medium and long-term goals for your business. Having a dedicated aim for the future first, may help break those down into smaller ones. For example, the goal of being the biggest supplier in the UK for hair products is ambitious. Still, without short term goals, you’ll never work towards it.

Short term goals can include giving yourself targets like growing your sales. A medium-term goal could be to offer more products. Then a long term goal can be the overarching idea for the future of your business. Breaking down what you would like to do makes the strategy more manageable.

The business strategy to help reach your goals is another important section of your operational plan. This section helps to set up the actions and activities you want to take on. Everything you decide to do can follow your current budget position. Keeping those other sections in mind helps you stay realistic but purposeful.

Your strategy can address how you see the business achieving your goals and which steps to take. For example, to get more customers, your strategy can decide which channels to use for digital marketing. Every decision will be unique to your business and its specific goals. 

Consider the risks you may face. Similar to the threats you currently have, you could see more problems by changing the way you operate. By assessing possibilities, you can better face them. For example, your strategy might include launching an IOS app. But, if Apple changes their system before development ends, last minute changes could put you over budget.

An operational plan can provide something to look back on and compare your success . To do that, include a section on measuring progress. Choose figures that can be checked quickly and routinely. Another way of measuring progress is by assigning a timescale to achieve each goal. 

For example, you can aim to reach 100 sales a week in three months. After one month, look at how close you are and if anything needs to change. By the third month, if you haven’t reached your goal, come back to your operational plan and find a new strategy.

Aside from helping you stick to your budget, by having a Countingup business current account, you can also track the progress of your financial goals. 

Its expense categorisation feature lets you sort costs, which allows you to separate different areas of the business financially. Suppose you want to increase your profit by keeping expenses low. In that case, you can access all of the information and compare the attention you need to give to each section of the business.

Start your three-month free trial today. 

Find out more here .

• Counting Up on Facebook
• Counting Up on Twitter
• Counting Up on LinkedIn

Related Resources

Bookkeeping and accounting tips for hairdressers.

As a self-employed hairdresser or salon owner, bookkeeping and accounting can be hard

What expenses can you claim as a childminder?

Being a childminder can be a great way to earn extra income or

How to get more clients as a freelance makeup artist

Whether you’re a professional makeup artist, a bridal makeup artist or a student

How to start a supported living business

Starting a supported living business is a challenging, but incredibly rewarding, way to

How To Start A Vending Machine Business In The UK

Starting a business is a great way to become your own boss and

How to start a dog daycare business

If you think dogs are a treat to be around, you’re not alone.

How to start a babysitting business

If you love spending time with children and offer to babysit for family,

How to start a cat sitting business

Did you know that 24% of the UK population own a cat? That’s

Money laundering regulations for estate agents

In December 2020, the government issued the National risk assessment of money laundering

How to become a freelance bookkeeper

If you enjoy balancing books and organising business finances, becoming a freelance bookkeeper

How to sell jewellery designs to companies 

Do you enjoy creating unique jewellery designs? If so, you might want to

How to become a self-employed labourer

Do you enjoy working with your hands and like the idea of being

START YOUR JOURNEY

1. Beginning Your Journey

--> Why Start an Online Business

--> --> --> Planning Your Business

--> Setting up Your Home Office

2. Focusing on You

--> Stop Procrastinating

--> Keeping Mentally Fit

--> Keeping Healthy

--> Keeping Physically Fit

--> Work Life Balance

3. Setting up Your Online Business

--> Legal Set Up

--> Start Setting up Your Online Business

--> Accounting Set Up

--> Insurance Set Up

--> Banking Set Up

4. Choosing What and How to Sell

--> Selecting Your Niche

--> Selecting Your Business Model

--> Overview of the Different Business Models

--> Ecommerce

--> Professional Blogger

--> YouTube

--> Membership Site

--> Fulfillment By Amazon

--> Authority Site

--> Amazon Affiliate

--> Advertising

--> Drop Shipping

--> Lead Generation

--> Affiliate Marketing

5. Buy or Build a Website

--> Buying an Existing Website

--> Build Your Own Website

--> Sort Your Domain and Hosting

--> Setting Up Wordpress

--> Creating Your Content

--> Posting Your Content

6. It's all About the Product

--> Pricing Your Product Correctly

--> Digital Product Creation

--> Physical Product Creation

7. Branding Your Business

--> Creating Your Brand

8. Setting up Your Business Tech

--> Choose Your Website Hosting

--> Why Use a VPN

--> Choose Your Software

9. Monetize Your Business

--> Monetize Your Online Business

10. Getting Customers

--> How To Find Your Dream Customers

--> How To Do SEO

--> How To Drive Traffic

--> How To Market Your Online Business

11. Getting Connected with People

--> How to Stay Connected in Your Business

12. Growing Your Business

--> How to Grow Your Business

--> Business Growth Through Outsourcing

13. The Exit

--> Preparing to Sell Your Business

--> After the Business is Sold

The Importance of Ongoing Business Planning for Your Online Business in 2023

Going in blind and relying on Lady Luck may work out in everyday life, but it's a significant risk when it comes to online business. Whether you’re starting an online small business or running a blog, you need to map out your trajectory and develop a business plan.

Market analysis, eyeing the competition, revenue projections, and setting long-term goals are the makings of a successful business. If this seems a bit overwhelming, you’ve come to the right corner of the internet. This article will discuss the importance of ongoing business planning and why every entrepreneur can benefit from developing one.

Do You Even Need a Plan?

Simply put, a business plan is a type of document that outlines a company's future goals. It helps define your objectives and determine the pros and cons of different strategies. The entire process can also lead to important discoveries. For example, it can provide insight into success enhancement opportunities and help the company achieve its full potential.

Seasoned online business owners will tell you that having a business plan is crucial for any up-and-coming entrepreneur. It outlines the practical steps required to see your business idea through without making too many detours or errors in judgment. Not to mention, it can help you achieve short- and long-term goals faster. When it comes to talent acquisition for the healthcare industry , a business plan can be even more beneficial. This is also a highly competitive industry, and having a solid plan in place can give you a competitive edge.

Even the best business idea can be rendered worthless if you’re unable to develop, execute, and implement a strategy. For example, let’s say you want to raise money from institutional investors or banks. You’ll need a well-written business plan that will convince them your company is worthy of funding. Keep in mind the document should cover all the logistics of your endeavor but still be easy to comprehend. Otherwise, it’ll be hard to acquire an initial investment to get your online business off the ground.

What Are the Benefits of a Business Plan?

So, what are the benefits of coming up with a detailed online business plan? Well, you'd be surprised how many issues can be quickly resolved or even avoided with a substantial mark-up. Here are some scenarios where online business planning can act as a saving grace.

• It helps you respond to the arrival of new competing products with efficiency
• If the production sector needs a technical update, you can adapt quickly
• You can take care of a new client base's demands with more precision
• It enables you to hone the necessary skill set of your employees

In other words, a business plan is more than just a lens. It also serves as a means of expressing your vision to partners, administrators, and staff by illustrating the steps to its realization. But, mainly, it adds professionalism to a startup company that can lead to more opportunities.

It Helps You Make Hard Decisions

Entrepreneurship is often a never-ending practice of making decisions and dealing with crises. Being your boss means that sometimes you won't have the luxury to weigh all the implications of a particular decision before you have to make it. That’s where a detailed business plan can come in handy.

The importance of ongoing business planning means that creating a business plan can help you predict the outcome of choosing a particular path. Since it forces you to sit down and consider all the aspects of your online business venture upfront, you’re more likely to identify potential curveballs. You'll need to develop marketing strategies based on the kind of goods or services you'll provide, which can lead to asking difficult questions. But after doing so, you can devote more time to find well-researched and informative solutions right off the bat. Furthermore, strategic thinking helps you determine how those decisions will affect your overall plan.

And even if you end up losing the actual document right after you finish, the process of writing it down will undoubtedly help. It will allow you to think about your goals in more concrete terms and thus identify flawed thinking in your approach.

It Increases Your Chance of Success

Although nothing can guarantee a successful launch, many initial hiccups can be predicted with a well-constructed online business plan.

According to CB Insights , a tech market data platform, the following are some of the most common causes for failed startups.

• There isn't a market for the services or products you provide
• You experience cash flow problems or just run out of resources too soon
• Your team is inadequate. This emphasizes the importance of recruiting the best people to assist you in running the business
• The competition is too abundant.  When you have many business rivals in your preferred niche, it's challenging to make a consistent profit
• The pricing rates are off-putting. Some entrepreneurs set their prices too high or too low for their goods or services, leading to eventual failure

Entrepreneurship often comes with a lot of risks. However, curveballs become more manageable after your idea is put to the test with a well-thought-out business plan. Establishing revenue and cost forecasts, determining logistics and operational planning, and creating a comprehensive view of the competition and business environment will help mitigate the danger of a potentially precarious venture. In addition, a business plan will help you understand your competitors and the chosen industry and determine customer tastes and behavioral patterns.

It Facilitates Communication Between Coworkers

You can't always be there to call all the shots, whether you're leading a team of 100 or running a blog with a friend. Let your partners or employees know they can refer to the business plan when making important decisions. A mission statement can help them figure out what to do next if they can't get a response from you. Sharing your vision with your colleagues means everyone will be on the same page regarding short-term and long-term goals.

Also, if you’re pursuing outside funding, most banks require you to provide a business plan. After all, they have to make sure investing in your business will be profitable in the long run.

What Is the Importance of Business Planning? How Is It Helping the Organization in Terms of Profitability?

What do you hope to achieve in the future, and how can those personal aspirations change the trajectory of your company? For long-term success, your personal and professional visions need to complement each other. A good online business plan can help you determine your future more precisely. A genuinely effective plan is based on a recognizable, overarching element that provides a clear goal.

Furthermore, company owners claim that regularly reevaluating your business plan is likely to increase sales, income, and marketing effectiveness. The majority of entrepreneurs point to “sales revenue” as the most likely sector to benefit from strategic planning . A high-quality business plan is much more likely to predict significant profits and sales revenue increases, especially in the first year.

As mentioned, a business plan is a mechanism for communicating with financial institutions to obtain investment capital. It can also persuade people to join the business, receive credit from suppliers, and reel in new clients.

How Does Planning Affect Your Online Business?

A successful company is based on a solid foundation established, in part, through preparation and analysis. Formulating a business plan is without a doubt one of the essential steps for launching an online business.

It will assist you in developing concrete targets and goals for your online shop and determine the steps needed to achieve them. In addition, by writing a business plan, you will learn more about the industry you wish to enter. That includes choosing the right niche and assessing potential buyers, product demand, and competition.

Furthermore, for a company to truly prosper, it must stand out from the crowd. Therefore, a business plan necessitates the development of a Value Proposition and a Unique Selling Proposition. It's typically done based on the research you did before you began writing your proposal.

What's the Difference Between Business Planning and Strategic Planning?

While a strategic plan can be considered a type of business plan, there are a few key differences. First, in the corporate sector, the terms strategic plan and business plan are often interchangeable. Simply put, a strategic plan is used to manage an established organization's future path, while business plans work better for startups.

The two plans also encompass different periods. A strategic plan is used to make predictions for the next three to five financial years, while a business plan mainly focuses on short-term goals. Additionally, a strategic plan usually gives the company direction. It specifies the action you need to take to get it from where you are to where you want to be. A business plan serves more as a framework that will help shape the company vision.

Having a business plan is more tactical. It’ll help you evaluate whether a particular business opportunity is even feasible. On the other hand, a strategic plan focuses on gaining a sustainable competitive edge.

Understanding the gap in the scale of a strategic and a business plan is another way to explain the distinction. A corporate-driven strategy plan is often used to kick off the annual preparation process for larger companies with several divisions and a diverse product listing. Smaller businesses and startups often rely solely on a business plan to formulate the logistics on paper, secure capital, and begin operations. Many small companies, particularly startups, never even establish a strategy.

Need Some Software to Help You Build a Business Plan?

If you're running an online business and you need a hand in creating a business plan, we have a solution for you –  LivePlan . This is leading business plan software that helps you simplify your business planning, budgeting, forecasting, and performance tracking. 

Why We Like LivePlan:  

• It has a library of more than 500 sample business plans to match every industry or niche 
• They offer step-by-step expert guidance and instructions to guide your online business from the very first day 
• The automatic financials let you create financial forecasts without hassle 
• It contains industry benchmarks and performance dashboards that lets you keep track of your performance as well as that of your competitors.  

Try Not to Wing It

Virtually all types of online businesses can benefit from a well-structured business plan. Not only will it help you pick the right niche, but it will communicate your vision with more efficiency. It can also lead to several important revelations regarding your personal and professional path.

The most significant advantage of constructing a business plan lies in the ability to adapt. Whether it’s financial trouble or countering a rival company's moves, you can always come out on top if you have a strategy to fall back on. We know the bold types will try to wing it, but a savvy entrepreneur knows the importance of ongoing business planning.

Previous Step

Want our Tips and Tricks?

Copyright 2024. Emily and Blair.

Want More Online Tips?

Sign up to receive our weekly email with the latest episode release, tips and freebies.

Do you REALLY need a business plan?

The top three questions that I get asked most frequently as a professional business plan writer will probably not surprise you:

• What is the purpose of a business plan – why is it really required?
• How is it going to benefit my business if I write a business plan?
• Is a business plan really that important – how can I actually use it?

Keep reading to get my take on what the most essential advantages of preparing a business plan are—and why you may (not) need to prepare one.

The importance, purpose and benefit of a business plan is in that it enables you to validate a business idea, secure funding, set strategic goals – and then take organized action on those goals by making decisions, managing resources, risk and change, while effectively communicating with stakeholders.

Let’s take a closer look at how each of the important business planning benefits can catapult your business forward:

1. Validate Your Business Idea

The process of writing your business plan will force you to ask the difficult questions about the major components of your business, including:

• External: industry, target market of prospective customers, competitive landscape
• Internal: business model, unique selling proposition, operations, marketing, finance

Business planning connects the dots to draw a big picture of the entire business.

And imagine how much time and money you would save if working through a business plan revealed that your business idea is untenable. You would be surprised how often that happens – an idea that once sounded so very promising may easily fall apart after you actually write down all the facts, details and numbers.

While you may be tempted to jump directly into start-up mode, writing a business plan is an essential first step to check the feasibility of a business before investing too much time and money into it. Business plans help to confirm that the idea you are so passionate and convinced about is solid from business point of view.

Take the time to do the necessary research and work through a proper business plan. The more you know, the higher the likelihood that your business will succeed.

2. Set and Track Goals

Successful businesses are dynamic and continuously evolve. And so are good business plans that allow you to:

• Priorities: Regularly set goals, targets (e.g., sales revenues reached), milestones (e.g. number of employees hired), performance indicators and metrics for short, mid and long term
• Accountability: Track your progress toward goals and benchmarks
• Course-correction: make changes to your business as you learn more about your market and what works and what does not
• Mission: Refer to a clear set of values to help steer your business through any times of trouble

Essentially, business plan is a blueprint and an important strategic tool that keeps you focused, motivated and accountable to keep your business on track. When used properly and consulted regularly, it can help you measure and manage what you are working so hard to create – your long-term vision.

As humans, we work better when we have clear goals we can work towards. The everyday business hustle makes it challenging to keep an eye on the strategic priorities. The business planning process serves as a useful reminder.

3. Take Action

A business plan is also a plan of action . At its core, your plan identifies where you are now, where you want your business to go, and how you will get there.

Planning out exactly how you are going to turn your vision into a successful business is perhaps the most important step between an idea and reality. Success comes not only from having a vision but working towards that vision in a systematic and organized way.

A good business plan clearly outlines specific steps necessary to turn the business objectives into reality. Think of it as a roadmap to success. The strategy and tactics need to be in alignment to make sure that your day-to-day activities lead to the achievement of your business goals.

4. Manage Resources

A business plan also provides insight on how resources required for achieving your business goals will be structured and allocated according to their strategic priority. For example:

Large Spending Decisions

• Assets: When and in what amount will the business commit resources to buy/lease new assets, such as computers or vehicles.
• Human Resources: Objectives for hiring new employees, including not only their pay but how they will help the business grow and flourish.
• Business Space: Information on costs of renting/buying space for offices, retail, manufacturing or other operations, for example when expanding to a new location.

Cash Flow It is essential that a business carefully plans and manages cash flows to ensure that there are optimal levels of cash in the bank at all times and avoid situations where the business could run out of cash and could not afford to pay its bills.

Revenues v. Expenses In addition, your business plan will compare your revenue forecasts to the budgeted costs to make sure that your financials are healthy and the business is set up for success.

5. Make Decisions

Whether you are starting a small business or expanding an existing one, a business plan is an important tool to help guide your decisions:

Sound decisions Gathering information for the business plan boosts your knowledge across many important areas of the business:

• Industry, market, customers and competitors
• Financial projections (e.g., revenue, expenses, assets, cash flow)
• Operations, technology and logistics
• Human resources (management and staff)
• Creating value for your customer through products and services

Decision-making skills The business planning process involves thorough research and critical thinking about many intertwined and complex business issues. As a result, it solidifies the decision-making skills of the business owner and builds a solid foundation for strategic planning , prioritization and sound decision making in your business. The more you understand, the better your decisions will be.

Planning Thorough planning allows you to determine the answer to some of the most critical business decisions ahead of time , prepare for anticipate problems before they arise, and ensure that any tactical solutions are in line with the overall strategy and goals.

If you do not take time to plan, you risk becoming overwhelmed by countless options and conflicting directions because you are not unclear about the mission , vision and strategy for your business.

6. Manage Risk

Some level of uncertainty is inherent in every business, but there is a lot you can do to reduce and manage the risk, starting with a business plan to uncover your weak spots.

You will need to take a realistic and pragmatic look at the hard facts and identify:

• Major risks , challenges and obstacles that you can expect on the way – so you can prepare to deal with them.
• Weaknesses in your business idea, business model and strategy – so you can fix them.
• Critical mistakes before they arise – so you can avoid them.

Essentially, the business plan is your safety net . Naturally, business plan cannot entirely eliminate risk, but it can significantly reduce it and prepare you for any challenges you may encounter.

7. Communicate Internally

Attract talent For a business to succeed, attracting talented workers and partners is of vital importance.

A business plan can be used as a communication tool to attract the right talent at all levels, from skilled staff to executive management, to work for your business by explaining the direction and growth potential of the business in a presentable format.

Align performance Sharing your business plan with all team members helps to ensure that everyone is on the same page when it comes to the long-term vision and strategy.

You need their buy-in from the beginning, because aligning your team with your priorities will increase the efficiency of your business as everyone is working towards a common goal .

If everyone on your team understands that their piece of work matters and how it fits into the big picture, they are more invested in achieving the objectives of the business.

It also makes it easier to track and communicate on your progress.

Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.

8. Communicate Externally

Alliances If you are interested in partnerships or joint ventures, you may share selected sections of your plan with the potential business partners in order to develop new alliances.

Suppliers A business plan can play a part in attracting reliable suppliers and getting approved for business credit from suppliers. Suppliers who feel confident that your business will succeed (e.g., sales projections) will be much more likely to extend credit.

In addition, suppliers may want to ensure their products are being represented in the right way .

Professional Services Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, including attorneys, accountants, and other professional consultants as needed, to make sure that everyone is on the same page.

Advisors Share the plan with experts and professionals who are in a position to give you valuable advice.

Landlord Some landlords and property managers require businesses to submit a business plan to be considered for a lease to prove that your business will have sufficient cash flows to pay the rent.

Customers The business plan may also function as a prospectus for potential customers, especially when it comes to large corporate accounts and exclusive customer relationships.

9. Secure Funding

If you intend to seek outside financing for your business, you are likely going to need a business plan.

Whether you are seeking debt financing (e.g. loan or credit line) from a lender (e.g., bank or financial institution) or equity capital financing from investors (e.g., venture or angel capital), a business plan can make the difference between whether or not – and how much – someone decides to invest.

Investors and financiers are always looking at the risk of default and the earning potential based on facts and figures. Understandably, anyone who is interested in supporting your business will want to check that you know what you are doing, that their money is in good hands, and that the venture is viable in the long run.

Business plans tend to be the most effective ways of proving that. A presentation may pique their interest , but they will most probably request a well-written document they can study in detail before they will be prepared to make any financial commitment.

That is why a business plan can often be the single most important document you can present to potential investors/financiers that will provide the structure and confidence that they need to make decisions about funding and supporting your company.

Be prepared to have your business plan scrutinized . Investors and financiers will conduct extensive checks and analyses to be certain that what is written in your business plan faithful representation of the truth.

10. Grow and Change

It is a very common misconception that a business plan is a static document that a new business prepares once in the start-up phase and then happily forgets about.

But businesses are not static. And neither are business plans. The business plan for any business will change over time as the company evolves and expands .

In the growth phase, an updated business plan is particularly useful for:

Raising additional capital for expansion

• Seeking financing for new assets , such as equipment or property
• Securing financing to support steady cash flows (e.g., seasonality, market downturns, timing of sale/purchase invoices)
• Forecasting to allocate resources according to strategic priority and operational needs
• Valuation (e.g., mergers & acquisitions, tax issues, transactions related to divorce, inheritance, estate planning)

Keeping the business plan updated gives established businesses better chance of getting the money they need to grow or even keep operating.

Business plan is also an excellent tool for planning an exit as it would include the strategy and timelines for a transfer to new ownership or dissolution of the company.

Also, if you ever make the decision to sell your business or position yourself for a merger or an acquisition , a strong business plan in hand is going to help you to maximize the business valuation.

Valuation is the process of establishing the worth of a business by a valuation expert who will draw on professional experience as well as a business plan that will outline what you have, what it’s worth now and how much will it likely produce in the future.

Your business is likely to be worth more to a buyer if they clearly understand your business model, your market, your assets and your overall potential to grow and scale .

Related Questions

Business plan purpose: what is the purpose of a business plan.

The purpose of a business plan is to articulate a strategy for starting a new business or growing an existing one by identifying where the business is going and how it will get there to test the viability of a business idea and maximize the chances of securing funding and achieving business goals and success.

Business Plan Benefits: What are the benefits of a business plan?

A business plan benefits businesses by serving as a strategic tool outlining the steps and resources required to achieve goals and make business ideas succeed, as well as a communication tool allowing businesses to articulate their strategy to stakeholders that support the business.

Business Plan Importance: Why is business plan important?

The importance of a business plan lies in it being a roadmap that guides the decisions of a business on the road to success, providing clarity on all aspects of its operations. This blueprint outlines the goals of the business and what exactly is needed to achieve them through effective management.

Sign up for our Newsletter

Get more articles just like this straight into your mailbox.

Related Posts

Recent Posts

JavaScript seems to be disabled in your browser. You must have JavaScript enabled in your browser to utilize the functionality of this website.

• Success Story
• Free Mobile App(Shopify)

Blog » Magento » Benefits of Having An Online Business Or Moving Business Online

Benefits of Having An Online Business Or Moving Business Online

• Small Medium Business

Running short of time? Get PDF of the blog in your mail.

Enter your Name:

Enter your E-mail:

According to research by Statista , “E-Commerce has grown up to 300% within the last few years and is expected to make 17.5% of global retail sales by the end of 2021”. No doubt, we are living in the era of digitalization, where being online is essential. The importance of online business is extremely high for the success of a business. There has been a high surge in the number of internet users within the past twenty years. The boundless world of the internet has made it possible for businesses to sell their services across the globe and there are numerous benefits of having an online business.

Image Source: Statista

Data in the above image clearly shows the importance of online business and how the benefits of having a website can help your business by increasing its sales.

As a result, many big companies and small businesses found their way online. What do you think the reason is? The main advantage of having an online business is to increase brand awareness and customer engagement. Scroll down to see how the benefits of having a website can accelerate the sales of your business. In the end, I am sure you won’t be able to deny the importance of online business.

Also read: Things You Must Know Before You Start An Ecommerce Business

Avail flat 20% OFF on Magento Marketplace solutions in our ongoing Holiday Season Sale. Offer is only valid till the end of 2022, so hurry and setup an online business at affordable rates! 

Benefits Of Having An Online Business

As a business, you must grab all opportunities that can profit you. Your online presence as a business can actually help your business reach out and connect with its audience at a global level. Because all those places where your physical store can’t reach, your online website can.

There are times when the customers might want to visit your website first, to have a look at your services, products, and reviews, before visiting your physical store. Now think, what if you don’t have an online presence, I mean no online store? Well, there are high chances that you end up losing your potential customer. I’m sure you won’t want that!

There are countless benefits to having an online business. In this blog, I’ve listed down all those reasons that justify why your business needs to be online. Let’s begin!

1.  Low Operating Costs

 Moving your business online does not require any kind of warehouse, inventory, transportation vehicles, or staff. The shift is so smooth that all you have to do is sell the same product that you sell at your offline store to a wide base of customers. Let me tell you how!

With the help of an online business, you can simply have products sent directly to the customers via suppliers. That means, it is not necessary to have your own inventory in order to operate an online business. Not just this, the direct delivery of products from suppliers to clients also reduces the shipping time. As a result, it makes your customers happy and less paperwork makes the operations hassle-free.

If you’re located in Calgary, Calgary movers can be a great resource for moving your inventory to a new location or for storage.

You have two choices: You can either hire a designer and can get your website designed by spending a significant amount of money or you can make use of a free platform like WordPress. You can easily design your website with the help of WordPress themes which are low-cost and easily accessible.

In case you are just about to start your business then going online is the best option for you. Because, in comparison to opening a physical store, an online store requires significantly lesser money. Neither do you need to spend money on utilities and maintenance of your store, (good quality images are a must-have on online websites)

You can also try social media marketing when your business moves online. Social media marketing has been helping a lot of companies in occupying more and more customers as well as expanding their reach.

Also Read: Steps To Take Your Offline Business Online

2.  24/7 Availability

Without the internet, it is next to impossible for your business to provide its services for 24 hours. With the help of an online website, you can let your customers visit and know about your services at any time from any corner of the world. This can not be possible with an offline business. Your clients and customers can read about your products and place orders as per their convenience.

Imagine how beneficial it can be for your business to provide its services for a longer period of time and even during the holidays! It is just like making money even when you sleep because the internet is there for you. In order to maximize the profit, your business must be available to those buyers as well who prefer online shopping over offline.

Also, here we are talking about moving your business online which does not mean that you are closing your traditional business. So ultimately having an online website for your business will increase your lead and sales in the market.

3.  Better Customer Support

Let me tell you one fact, the internet was made for business and if you are an opportunist you must leverage the online world. The undeniable advantage of having an online business is that it enables you to answer the queries of your customers and resolve their problems without consuming much of your time. So with the internet, you can simply have better customer support for your potential customers. What you can do is simply create a video including instructions or a guide that can help customers get the answers to their questions. And the best part, you can simply make use of that video for years!

Other than this, you can also set a customer support section on your online website. It will assist your customers at any time.

The online business enables you to provide your customers with the exact information they want. It saves both the time of you and your customers as they can simply go through a video so the number of calls and messages about the product query will simply be reduced by itself. Out of the numerous proven benefits of having a website for your business, the most important one is that helps you get to connect with your audience at any time and anywhere.

Also Read: Why Should You Shift To Ecommerce?

4.  Boundless Business

One fact about brick-and-mortar stores that you cannot deny is: they cannot reach a worldwide audience. Traditional stores are limited to a local audience only but that’s not the same in the case of online stores. And here I’m about to introduce other benefits of having a website.

The importance of online business is that it enables you to connect with customers across the globe. This may sound rude to you, but if you are not thinking about the growth of your business then you are actually not doing business. Going online with your business can be considered to be a part of growth for your business.

By creating an online presence your business simply becomes available to the customers even when it is closed. One great benefit of having an online business is having a greater audience pool. This will directly result in an increase in sales and revenue.

So in a nutshell, your online business is having the whole world as its audience. In case you don’t want to sell your products to a global audience due to increased shipping costs or any other reason, you can still continue to deliver your services across your country.

5.  Feasibility to Operate From Anywhere

Having an online business enables you to operate and handle it from any corner of the world. This great benefit of having an online business lets you have the freedom to operate your business from anywhere by not just being stuck to a physical location.

You can easily conduct your online business from anywhere all you need is a solid internet connection. Also with reduced paper, works, and virtual databases, managing a business has never been easier than this. With the help of detailed sales and product information online, you will be simply able to keep a record of all the activities and purchase orders. You can simply make use of various online service providers to manage purchasing, billing, order fulfillment, and payments for your online business. Among the different benefits of having an online business, the feasibility to operate your business from anyone is the favorite of online business owners.

Also Check: Why it is the right time to take your business online?

From successfully building your business online from scratch and taking it to the next level, team Cedcommerce does it all. We provide a wide variety of solutions and services which ensure the smooth operation of your entire selling campaign. Our expert service includes – eCommerce website development , PWA solution , store speed optimization , migration from one platform to another , custom extension development , consultation service ,  digital marketing, and SEO , building personalized solutions based on seller’s need , theme customization , and much more.

More than 11,000 sellers from all around the world trust CEDCOMMERCE solutions and services. So what’s stopping you? Get in touch with us to know more .

The Bottom Line

There might be several benefits of having an online business but one thing is for sure you have to make the same efforts that you do in your offline business. By efforts, I’m referring to the marketing and advertising of your online business.

Take Your Offline Business Online Today!

In the current scenario, the importance of online business cannot be ignored. Turning a blind eye to the benefits of having an online business, is just like saying no to the growth of your business. So, don’t waste time any further and leverage what the internet has to offer your business!

The pandemic has brought about a transformation in the shopping preferences of consumers. Furthermore, customer demand around the holiday season is also at an all-time high. You can now transform online selling with Marketplace solutions and Magento extensions to get into the festive spirit.

To receive personalised guidance for your business idea, talk to our experts.

Kaufland API Upgrade: What are the Next Steps for Sellers...

Author: mohsin.

Posted on: March 22, 2023

Highlights of CedCommerce Experts – A Kickass Shopify Store Developer...

Author: cedcommerce.

Posted on: January 19, 2023

Best Products To Sell On Amazon This Winter!

Author: abhinandan banerjee.

Posted on: December 19, 2023

Name * Email *

Why Planning Is Important (Explained)

By: Author Paul Jenkins

Posted on May 4, 2022

Categories Business , Productivity

When it comes to planning, most people think of things like schedules and organization. While these are important aspects of effective planning, there’s much more to it than that! Good planning can help you achieve your goals and dreams by keeping you on track and focused – in business, and in life. Here are just a few reasons why planning is so important.

Why Planning Is Important

Plans are important. Although they may seem like an onerous mechanism designed to burden you with strict regulations and stressful deadlines, the planning process can actually be a liberating force that opens your mind to new possibilities and helps you put your ideas into action.

If you stay flexible and dynamic enough, planning can become a way of life. Your plans will change depending on the situation – and like life itself, they won’t always work out the way you hoped. But if you know how to adapt at all times, there’s no reason things can’t turn out for the best.

Planning is important in business and management because it gives companies a firm structure for their future so that their activities are consistent and organized.

Planning is also important in education because it helps students study for exams or complete assignments and learn more about certain subjects by preparing them with easy-to-understand information before the actual exam takes place.

Why Is Strategic Planning Important in an Organization?

Planning is critical for any business. In most cases, companies that don’t have a mission and vision are doomed to fail – because, without goals, there are no targets or actions to guide the company.

Without a plan, it’s almost like you’re flying blind in the dark or playing without a net – which can lead to unpredictable results. And remember, we all know what happens when you shoot in the dark: You usually hit something hard.

So … why is strategic planning important?

Because it enables organizations to achieve their strategic goals and achieve them well. It helps them prioritize and allocate resources effectively – leading to greater efficiency and a higher standard of living for all.

Of course, it takes time to create an effective plan, but when it’s done well, every organization benefits from having it in place as soon as possible, even if there are no immediate benefits at first glance.

Planning Is a Way to Stay Goal-Oriented

Setting goals is one of the most important things you can do as a business leader because they help you stay focused. Planning allows you to create a good structure and keep your team on task.

Once you’ve set your goals, it’s time to develop a plan that will help you achieve those goals.

A good business plan gives direction to your business and serves as a source of inspiration for everyone involved in your business. It provides an overview of what’s going on in the business and how it plans to achieve its goals.

If you don’t have this kind of clarity, it’s much harder for your employees to know what their specific jobs are or how they contribute to the company’s overall mission.

Your business planning doesn’t have to fill several volumes and require a group presentation before it’s approved by all the managers in your organization-you can quickly create it on your own or with a handful of members of your team who’ve relevant experience in the field (or all by yourself if you’re ambitious).

Even though large companies use complex planning methods, that doesn’t mean small companies have to. Even if you just write down a few key points about why certain strategies are effective and what results they’re likely to produce, it can be easier to write down an idea like this when you’re trying to figure out which avenues are worth pursuing next.

Long-Range Plans Provide the Guidance Needed to Meet the Goals of An Organization

For organizations to survive and thrive, they must make good long-term plans. Otherwise, their goals won’t be achieved or they’ll not be able to keep up with the rapid changes the world is currently experiencing.

For plans to be effective, they must be aligned with an organization’s goals.

In addition, a plan is only complete if there are measures to track progress. Long-term planning requires good communication within an organization so that everyone involved understands what needs to be done and how it fits into the big picture.

For example, if you were in charge of a mail delivery company, your plan might include hiring new employees who’ve good interpersonal skills so they can better deal with customers and solve problems that arise. If you include too much detail in your plan or try to cover too many areas without focusing on what’s most important to the success of your business, you could run out of time and resources before you get anything done.

Whether you’re running a small business from home or a large company with thousands of employees around the world, being able to plan for the future will help you keep up with growing demands and changing trends.

Without thoughtful, long-term planning, a business won’t be able to survive in today’s fast-paced global marketplace. Good planning is critical when dealing with organizational change.

It Helps an Organization Meet Its Objectives and Missions

Most companies have a mission statement, sometimes more than one. But what does it mean?

A mission statement is the reason for a company’s existence. It describes what the company wants to achieve and what values guide its behavior. Mission statements usually begin with the words “Our mission is…” or “The mission of [company name] is…”. They’re meant to be inspirational, visionary, and even poetic.

Mission statements are often confused with corporate goals.

A corporate goal describes how you’ll achieve your mission. For example, “Increase our sales by 30% over 2 years” would be a goal of the chief executive officer (CEO) of a chain of toy stores who wants to grow his business.

The CEO might say to his team, “Our mission is to increase sales by 30% over time. To achieve that goal, I want us all to focus on selling more toys.” Although the goal may follow from a discussion of the mission, these are different things, and goals don’t always have to follow directly from an organization’s stated purpose.

The Importance of Strategic Planning

What’s strategic planning?

Strategic planning may sound like a highfalutin term from the business world or something only large corporations need to worry about, but a strategic planning process is actually something every organization can use.

Let’s take online publishing, as an example.

The concept itself is pretty simple: you look at your team and your goals, and then design either a written plan or a visual graphic – the best way to achieve those goals. This way, you can identify what’s working and what could be better in clear steps.

Strategic Planning to Support and Engage Your Audience

The first step in strategic planning is to figure out who your audience is and where they’re going.

Once you’ve done that, you can tailor your content to their interests (and keep them engaged by avoiding the most common social media marketing mistakes). For example, if one of your followers likes Game of Thrones, they might also be interested in posts about medieval weaponry.

Next, think about how you can best communicate with these people.

Do you create short videos? Longer blog posts? Or do you want to set up an email list so people can get information from just one place? If it helps you organize things, take note of how often and when certain posts are optimal – maybe Facebook Live works best in the morning, or maybe Twitter conversations thrive on Tuesday evenings.

Also, think about how much time each strategy will take – some tactics require more energy than others!

Then, once you’ve got everything planned out and all the details ready to go, don’t forget to document it all somewhere. A masterful strategic plan should have some sort of record so everyone knows exactly why things are happening the way they are!

An Effective Business Plan Provides a Roadmap for Success

An effective business plan aims to achieve one or more of the following goals:

• To help attract investors by showing that your company is stable has lots of potential and will yield a high return on investment
• To help you secure financing by providing lenders with financial information about your business
• To guide the management team as they make day-to-day decisions about how to run their business and conduct the organizational activity
• To help you anticipate challenges so you can better manage them as they arise

Of course, if businesses didn’t need plans, it wouldn’t be a bad thing! Having a plan can take time away from other important tasks, like running your business and making money for yourself.

However, most large companies in the United States have written formal business plans that outline their goals for the future and methods for achieving them.

Therefore, it’s safe to assume that if professional businesses include formal plans in their operations, small businesses can benefit from planning as well-at least enough to provide an outline for success but not necessarily an exhaustive guidebook to managing every aspect of their company on a daily basis or down to the last decimal point in Excel spreadsheet projections.

Why Is Planning Important in Management?

Planning is an essential part of management. It helps the company set goals for the future, sets a course to sail from the present into the future, and helps keep things organized and efficient as time passes.

Most organizations will have at least one project manager dedicated to this job.

Planning also sets the course for communication and decision-making within an organization. Daily planning and effective project management ensure that everyone knows what needs to be done and when it needs to be done, helping the business run more smoothly from day to day.

Finally, project planning helps with accountability- when you’re not just making decisions off the cuff, you’ve concrete records of how those decisions have impacted your business (or personal life) in the past, which can help you make better decisions in the future.

A plan may seem like a dull affair at times, but once you realize that it pays off over time, it becomes one of your most valuable tools for staying in control of your situation.

What Should Be Included in a Business Plan

A business plan is a document that clearly communicates the mission, purpose, and goals of your business. The first and most important section of the business plan is the executive summary. This is what investors will read to decide if they want to invest in your business.

To get where you want to go, there are some important things to consider:

• First, how does your business or idea fit into the world?
• What is the business idea?
• What makes it special and different?
• Then, who are your customers or clients?
• What problems do they have that your service or product can provide a solution for?
• You should also take a look at the competition – who’s doing the same thing?
• How is your business better than theirs?

Business Plans Help Facilitate Communication, Establish Priorities, and Set Smart Goals

Planning is important, and your business plan should be the foundation for it. This document lays out your company’s organizational goal, priorities, goals, and strategies (both short and long term) so that everyone involved can work toward the same goal. It also ensures that nothing falls through the cracks.

Good communication is at the heart of good planning, and the implementation of a plan:

• It helps you communicate with others about what your business does and how it does it. Collaboration is an effective way to make smart decisions, improve productivity and quality of work, and increase the success of your business.
• It sets priorities for your team . You can create a plan based on several possible goals that are most important to you – such as increasing revenue or improving customer service – or based on industry standards or benchmarks, such as industry-specific revenue goals.
• It helps you plan your human resource management and the effective funneling of innovative ideas.
• For each goal, you’ll specify exactly what results you want to achieve and by when. You can then use milestones to track progress against those expectations. This gives you insight into where you stand and allows you to re-evaluate if you need to make adjustments.
• This allows you to be flexible with your goals, leaving room for changes that depend on circumstances such as seasonal demands or economic changes beyond your control. While you’ll keep an eye on key performance indicators to make sure no one strays too far from their goals, having some wiggle room gives you more opportunity to adjust when things go wrong and seize opportunities when something unexpected happens that could bring great new value to your organization (or rather, “your” organization).
• In short, a plan helps keep everyone working together toward a common goal while leaving room for spontaneous developments along the way.

Proper Planning for All Areas of Your Business Can Help You Achieve Your Goals

Planning is important in every area of your life, but especially in business. When you create a good plan, you think about the future you want to achieve and lay out steps to get there. It’s the roadmap to ensuring you meet important goals.

In planning, you ask yourself questions and think honestly about what’ll help you achieve your goals. When you have a plan, you’re prepared for unexpected difficulties.

What Is a Business Plan and Why Is It Important?

• by Web Admin
• August 8, 2022
• Online Business

There are many different business plans, and each has its own purpose. That said, all business plans aim to help businesses create a roadmap for success.

Benjamin Franklin said, “By failing to prepare, you are preparing to fail.”

Having a business plan can help you prepare by thinking through key elements of your business and creating strategies to help align your business.

This article will give a brief overview of what a business plan is and why it is important to help Filipino business owners, like you, get started. Let’s dive in!

What Is a Business Plan?

A business plan is a document that outlines the goals and objectives of a business, as well as the strategies needed to achieve them. It can help you assess the risks and opportunities associated with starting a new business and can be used to attract investors or secure loans.

Who Needs a Business Plan?

A business plan is essential for entrepreneurs who are starting a new business. 

Without a business plan, it would be very difficult to make a case for why an entrepreneur’s business idea is worth investing in. A well-crafted business plan can also help entrepreneurs stay organized and focused on their goals.

So, to sum it up: if you’re starting a new online business in the Philippines, you need a business plan.

Why Do You Need a Business Plan?

A business plan is important because it provides a roadmap for your online business. It can help you identify potential challenges and opportunities, and help you make decisions that will help your business grow. A business plan can also be used to track progress and measure success.

What Do You Need to Include in a Business Plan?

There is no one-size-fits-all answer to this question, but here are some important things to include in your business plan:

• Executive Summary. This is a high-level overview of your business plan, including your goals and objectives.
• Company Overview. This is a brief description of your company, including its history, products or services, and target market.
• Management and Organization. This is where you’ll state your company’s legal structure, ownership profile, and description of your management team.
• Market Analysis. This is where you’ll describe your target market and how you plan to reach them.
• Competitive Analysis and Strategy. This is where you’ll analyze your competition and what they’re doing well (or not so well).
• Products and Services. This is where you will give a detailed description of how your products and services can help solve your target customers’ problems.
• Marketing and Sales Plan. This is your plan for getting customers and making sales.
• Logistics and Operations Plan. This is your plan for how your business will run on a day-to-day basis.
• Financial Plan. This is where you’ll include your financial projections, such as your income statement and balance sheet.
• Exit Plan. This is your plan for moving your business forward and allowing for a seamless transition to its new growth stage, direction, or leadership.

5 Reasons Why a Business Plan Is Important

Creating a business plan can seem like a lot of work, but it’s worth it if you’re serious about starting a business. 

Why is it so important for Filipino entrepreneurs and business owners to have a solid business plan? Here are just a few reasons:

Create Milestones

A business plan can help you track your progress and measure your success. 

By setting goals and outlining the steps you need to take to achieve them, a business plan can help you stay on track and make sure your business is heading in the right direction. 

Additionally, a business plan can be used to track your progress over time, allowing you to see how well your business is doing and make necessary adjustments. 

Measuring your success is also important, and a business plan can help you do that by setting benchmarks and tracking your progress towards them.

Attract and Evaluate Potential Partnerships 

A business plan can help you attract partners by demonstrating your understanding of the market and what you offer. It can also show your commitment to your business and give potential investors or partners a sense of what you are trying to achieve.

By having a clear plan in place, you can make sure that any potential deals will be beneficial to your business. You can also use your business plan as a tool to negotiate better terms with potential partners. 

If you’re thinking about partnering with or merging with another company, it’s important to create a business plan that outlines the potential benefits and risks of the partnership or merger.

Assess Risks and Opportunities

When starting a new business, it’s important to have a plan in place that can help assess the risks and opportunities involved. 

A business plan can help you anticipate potential challenges and outline strategies for overcoming them. It can also help you identify potential opportunities and assess the feasibility of pursuing them. 

By taking the time to create a business plan, you’ll be better equipped to make informed decisions about your new venture and give yourself the best chance for success.

Have a Solid Foundation

A business plan helps align your team and shows them a roadmap of how you’ll get from point A to point B.

Aligning your team’s priorities will boost your efficiency. You want them to understand your bigger objectives, so everyone’s on the same page. By having their support from the start, it’s easier to track and share progress.

If your team recognizes how their work contributes to the business as a whole, they’ll be more invested in attaining your goals. 

Bottom line: Transparency helps everyone plan and prioritize, connecting tactical effort to income.

Approach Investors

If you are trying to get funding from a lender, be sure to include detailed financial information in your business plan. This will show them that you are capable of repaying the loan. 

Investors will also want to see financial information, as well as how you will use the money and what your repayment schedule will be.

Your business plan should be tailored to the specific lender or investor you are trying to impress. Be sure to do your research and understand what they are looking for before you start writing. 

The more thorough and well-written your business plan is, the more likely you are to get the funding you need.

Importance of Business Plan FAQs

What is the most important part of a business plan?

The Executive Summary is considered the most important because it ties everything in your business plan, showing how your business will succeed in a concise statement.

Is a business plan necessary to start an online business?

To give your online business a greater probability of success, you need to have a solid strategy by knowing your company, market, industry, and competition.

How important is a proposal for an eCommerce business?

Business plans help eCommerce businesses turn their visions into practical action plans, so they can make informed decisions and help secure funding from investors.

Creating a business plan is not a one-time task – it should be revisited and updated regularly to reflect the changing needs of your company. 

As your business grows and changes, your plan should evolve along with it. So don’t be afraid to make changes to your plan as needed. 

The most important thing is that you have a plan in place and are using it to make informed decisions for your business.

Related articles:

• How Does SDR Outsourcing Work?
• How to Apply for an SSS Business Loan
• What are the Tax Obligations of Online Businesses

Prosperna, Your Partner to eCommerce Success

Prosperna is an all-in-one eCommerce platform for Philippine businesses. We are on a mission to empower 100,000 Philippine MSMEs with simple and affordable eCommerce solutions.

In fact, we are super passionate about helping Philippine MSMEs we’re giving you a free account forever! 

Want to start selling online? Create your free-forever Prosperna account now.

Access our eCommerce Secrets for FREE!

• First Name *
• Last Name *
• Phone Number *
• Email Address *
• Yes, I would like to receive marketing communications regarding Prosperna products, services, and events. I can unsubscribe at any time. * Yes, I would like to receive marketing communications regarding Prosperna products, services, and events. I can unsubscribe at any time. * Agree
• Do Not Fill This Out

Dennis Velasco

Dennis Velasco is the CEO and Founder of Prosperna, an all-in-one eCommerce platform for Philippine businesses. As a technology evangelist at heart, Dennis is super passionate about helping MSMEs "level the playing field" with technology. Feel free to connect with him on Facebook and LinkedIn .

Leave a comment Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Effective Techniques to Maximize Profits When Selling Digital Products Online

Benefits of Starting an Ukay-Ukay Business

What is a website address?