what are 5 reasons for a business plan

14 Reasons Why You Need a Business Plan

Female entrepreneur holding a pen and pointing to multiple sticky notes on the wall. Presenting the many ways having a business plan will benefit you as a business owner.

10 min. read

Updated May 10, 2024

There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.

A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.

A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.

Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?

Good questions. Here’s every reason why you need a business plan.

1. Business planning is proven to help you grow 30 percent faster

Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The process of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed.

You don’t have to just take our word for it. Studies have proven that companies that plan and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience cash flow crises that threaten to close them down.

2. Planning is a necessary part of the fundraising process

One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.

Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture.

A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality.

Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money.

3. Having a business plan minimizes your risk

When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations.

As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans.

Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.

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4. Crafts a roadmap to achieve important milestones

A business plan is like a roadmap for your business. It helps you set, track and reach business milestones.

For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.

In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.

And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.

5. A plan helps you figure out if your idea can become a business

To turn your idea into reality, you need to accurately assess the feasibility of your business idea.

You need to verify:

If there is a market for your product or service
Who your target audience is
How you will gain an edge over the current competition
If your business can run profitably

A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.

Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.

6. You’ll make big spending decisions with confidence

As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase.

These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.

7. You’re more likely to catch critical cash flow challenges early

The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your cash flow statement is one of the three key financial statements you’ll put together for your business plan. (The other two are your balance sheet and your income statement (P&L).

Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills.

8. Position your brand against the competition

Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:

What is your competition doing well? What are they doing poorly?
What can you do to set yourself apart?
What can you learn from them?
How can you make your business stand out?
What key business areas can you outcompete?
How can you identify your target market?

Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete.

9. Determines financial needs and revenue models

A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind.

Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business.

Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.

10. Helps you think through your marketing strategy

A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers.

Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc.

Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.

11. Clarifies your vision and ensures everyone is on the same page

In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there.

Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.

12. Future-proof your business

A business plan helps you to evaluate your current situation and make realistic projections for the future.

This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.

Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.

By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.

You’ll also be in a better position to seize opportunities as they arise.

Further Reading: 5 fundamental principles of business planning

13. Tracks your progress and measures success

An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.

By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.

Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.

14. Your business plan is an asset if you ever want to sell

Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale.

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Writing your business plan

By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one.

Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools and business plan templates out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.

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

Table of Contents

6. You’ll make big spending decisions with confidence
7. You’re more likely to catch critical cash flow challenges early

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The importance of a business plan

Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.

Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.

What is a business plan?

A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.

Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success. ‍

Why is a business plan important?

A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.

Business plans typically include detailed information that can help improve your business’s chances of success, like:

A market analysis : gathering information about factors and conditions that affect your industry
Competitive analysis : evaluating the strengths and weaknesses of your competitors
Customer segmentation : divide your customers into different groups based on specific characteristics to improve your marketing
Marketing: using your research to advertise your business
Logistics and operations plans : planning and executing the most efficient production process
Cash flow projection : being prepared for how much money is going into and out of your business
An overall path to long-term growth

What is the purpose of a business plan?

A business plan is like a map for small business owners, showing them where to go and how to get there. Its main purposes are to help you avoid risks, keep everyone on the same page, plan finances, check if your business idea is good, make operations smoother, and adapt to changes. It's a way for small business owners to plan, communicate, and stay on track toward their goals.

10 reasons why you need a business plan

I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.

The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.

To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.

1. To help you with critical decisions

The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.

Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.

Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.

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2. To iron out the kinks

Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.

3. To avoid the big mistakes

Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.

According to data from CB Insights , some of the most common reasons businesses fail include:

No market need : No one wants what you’re selling.
Lack of capital : Cash flow issues or businesses simply run out of money.
Inadequate team : This underscores the importance of hiring the right people to help you run your business.
Stiff competition : It’s tough to generate a steady profit when you have a lot of competitors in your space.
Pricing : Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.

The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!

Get a jumpstart on your business plan by creating your own cash flow projection .

4. To prove the viability of the business

Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.

Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.

A graphic showing you a “Business Plan Outline.” There are four sections on the left side: Executive Summary at the top, Company Description below it, followed by Market Analysis, and lastly Organization and Management. There was four sections on the right side. At the top: “Service or Product Line.” Below that, “Marketing and Sales.” Below that, “Funding Request.” And lastly: “Financial Projections.” At the very bottom below the left and right columns is a section that says “Appendix.

A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.

Want to prove there’s a market gap? Here’s how you can get started with market research.

5. To set better objectives and benchmarks

Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.

6. To communicate objectives and benchmarks

Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.

Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.

7. To provide a guide for service providers

Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.

8. To secure financing

Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.

Learn what you need to get a small business loan.

9. To better understand the broader landscape

No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.

10. To reduce risk

Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.

Business plan FAQs

How does having a business plan help small business owners make better decisions.

Having a business plan supports small business owners in making smarter decisions by providing a structured framework to assess all parts of their businesses. It helps you foresee potential challenges, identify opportunities, and set clear objectives. Business plans help you make decisions across the board, including market strategies, financial management, resource allocation, and growth planning.

What industry-specific issues can business plans help tackle?

Business plans can address industry-specific challenges like regulatory compliance, technological advancements, market trends, and competitive landscape. For instance, in highly regulated industries like healthcare or finance, a comprehensive business plan can outline compliance measures and risk management strategies.

How can small business owners use their business plans to pitch investors or apply for loans?

In addition to attracting investors and securing financing, small business owners can leverage their business plans during pitches or loan applications by focusing on key elements that resonate with potential stakeholders. This includes highlighting market analysis, competitive advantages, revenue projections, and scalability plans. Presenting a well-researched and data-driven business plan demonstrates credibility and makes investors or lenders feel confident about your business’s potential health and growth.

Understanding the importance of a business plan

Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.

Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.

Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.

The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.

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11 Reasons Why You Need a Business Plan

Back to Business Plans

Written by: Carolyn Young

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

Edited by: David Lepeska

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

Published on February 20, 2023 Updated on December 11, 2023

New business owners have so much to do to prepare for the launch of your business, which is why so many decide not to write a business plan. Many entrepreneurs think they don’t need one because they’re not looking for funding.

But this is the wrong approach. Every new business should have a business plan, not only to guide its operations, but also so that its owner is fully prepared to face the challenges ahead. There are actually many reasons – and lucky for you, they’re all laid out in this handy guide.

1. Testing Viability

When you write your business plan , you’ll be thinking through every aspect of your business, creating a financial plan, and doing a great deal of research, including market research . Part of your research is testing the market to see if people will buy your product.

You can use online surveys and in-person focus groups. If you find out there’s no market for what you’re offering, you’ve done so early without wasting time and money. You’ll also research your industry and may find rapid decline or change that could make your product obsolete.

Finally, when crafting a financial plan, you’ll project sales, costs, and profit. It’s possible that your business model is too costly to make money. At this point, you may be able to pivot to make your business financially viable, or you may have to go back to the drawing board.

The point is, the process of creating a business plan helps ensure your business is viable, helping you avoid building a business that’s destined to fail.

2. Setting Goals

Writing your business plan forces you to set goals, both short-term and longer-term. You’ll set milestones you plan to meet by certain dates, then create strategies to get there. Your financial projections will also give you sales goals, helping shape your sales strategy.

If you’re hiring employees, you can use your business plan to set their individual goals and perhaps a reward system.

3. Reducing Risk

Research for your business plan can put you on alert for potential risks, enabling you to craft strategies to mitigate those risks. For example, part of your financial plan will be a cash flow projection statement. You may find that at some point your cash on hand will be too low for the company to operate, so you can make a plan to better manage cash flow.

4. Knowing Your Market

In order to create an effective marketing strategy, you need to know your target market – their demographics, their needs and wants and product choices. You should also know where to find them. Are they on Facebook or TikTok? Then you can create messaging that resonates with your target market and put it on the most relevant marketing channels.

Your business plan will include a detailed target market analysis, which will give you the information about your customers that you’ll need.

5. Allocating Funds

Your business plan can tell you the most effective use of your funds at any given time. For example, you may find that it’s better to spend money on marketing rather than filling a certain job role. As you go through financial planning, these things should become clear, as you’ll have sales projections and cost projections. You’ll be able to find pain points and may decide to cut certain costs or reallocate funds.

6. Determining Funding Needs

Calculating startup costs will be part of your financial planning process, so you’ll know how much you need to launch and when you may need more funding. This will allow you to make fundraising plans, whether you have to tap into your own assets or attract financing.

7. Attracting Capital

If you try to obtain a loan or seek investment capital, a business plan is a must. Entrepreneurs are never handed money if they haven’t done their due diligence and laid out a robust strategy and vision. Lenders want to be confident the business will have enough income to repay the loan, while investors are looking for significant growth within a few years.

Either way, a compelling business plan is absolutely essential.

8. Attracting Partners

At some point you might want to bring in a partner, either for added funding or certain skills. Entering into a business relationship, particularly in a startup, is risky. Potential partners, just like investors, will want to see the research and strategy in your business plan.

9. Attracting Talent

Similarly, you may want to hire a top executive, such as a Chief Financial Officer (CFO). That person will be taking a huge risk and is unlikely to do so unless they can see how the business will succeed.

10. Having a Roadmap

A business plan is also just what the name says – it’s a plan for your business, a roadmap to success. The plan proves you’re not just figuring out as you go. Even so, remember that a business plan is a dynamic document that can evolve over time.

11. Learning

Creating a business plan early in the startup process helps you think through every aspect of your business. You’ll learn a great deal as you research and write your plan, and that invaluable knowledge could be the difference between success and failure.

Writing a useful business plan takes a great deal of time, research, and commitment, and that’s precisely the point!

Whether or not you’re looking to attract funding, crafting a business plan is one of the key early steps in preparing to launch a business . Doing so will help you to determine the viability of your idea and develop strategies to be successful.

Launching your business without a plan is like driving unfamiliar roads without a GPS-backed map: you’ll likely be lost in no time. So be sure to take the time to write a strong, informed business plan – and remember that the harder you work on it, the more likely your success!

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10 reasons why you need a business plan

A business plan is more than a document. It's the GPS for your entrepreneurial journey. In Australia, where the landscape of business is vast and diverse, a solid business plan is your roadmap to success. Let's explore why planning is critical and uncover some top reasons why you need a business plan.

A business plan is more than a document. It’s the GPS for your entrepreneurial journey. In Australia, where the landscape of business is vast and diverse, a solid business plan is your roadmap to success. Let’s explore why planning is critical and uncover some top reasons why you need a business plan.

What is a business plan?

A business plan is the foundational narrative of your company, setting out your vision and the strategic steps needed to reach your goals. Think of it as the blueprint for your enterprise’s journey from concept to market presence, detailing operations, marketing, and day-to-day processes.

Effective communication underpins success, and a business plan operates as the central channel through which the mission and strategies are related to stakeholders, aligning the entire team.

Financial health is pivotal, and your business plan acts as a fiscal guide, forecasting and managing your economy. This forward-thinking document offers investors and financial institutions a clear view of your business’s potential, thereby aiding in securing funding.

Additionally, a business plan assesses your idea’s feasibility, providing a clear-headed view of your business’s place in the market and its chances for success, while clearly defined milestones within the plan help track progress and facilitate necessary adjustments.

Read also: A step-by-step guide to creating a business model

Adaptability remains key within the ever-shifting business landscape, and your plan must evolve accordingly. As a risk mitigation tool, it allows for strategic buffers against potential challenges, ensuring your business stays resilient in the face of change.

Ultimately, a business plan is more than just a document; it’s the roadmap that directs your company from its aspirational state to a thriving, adaptive, and strategic organisation.

A comprehensive business plan thus sits at the heart of any business, providing the necessary guidance and structure to navigate the complex and ever-changing landscape of commerce. Whether you are just starting out or have engaged in commerce for years, revisiting and refining your business plan should be a priority to stay competitive and achieve long-term success.

You can read more about business plans at the Australian Government’s website.

Why planning is important in business

Planning is essential for any successful business. It sets clear goals, creating a unified vision that everyone can work towards. Effective use of limited resources is a critical part of planning, ensuring financial and human assets are used where they will have the most impact.

Risk management is also a key benefit of planning, preparing businesses to deal with potential challenges proactively. It shapes a competitive strategy, enabling a business to stand out in the market and quickly respond to changing trends.

Operational efficiency stems from good planning, streamlining processes to ensure optimal outcomes. This guides decision-making and supports financial health with robust forecasting.

Planning is inseparable from growth, providing a roadmap for expansion. It unites teams behind common objectives and establishes benchmarks to measure progress.

Ultimately, planning prepares a business for the future, turning long-term vision into actionable reality. It’s the cornerstone of a resilient, thriving business.

Why is planning important for a business?

Embarking on a business adventure without a plan is like setting sail without a map. A business plan isn’t merely a formality; it’s the compass that guides your journey to success. Here are 10 reasons why taking the time to develop a solid business plan is a critical step for any Australian companies poised for success:

1. Roadmap for growth

Embarking on business growth without a strategy is like setting out on an Australian outback adventure without a map – you might enjoy some random sights, but you’ll unlikely hit your intended landmarks. A business plan is that strategic map that will guide you through various terrains of the business world, laying out each milestone you want to reach along the way.

2. Securing Funding

Just as a well-crafted presentation can capture an audience, a thorough and insightful business plan can captivate investors or lenders. This document not only showcases your business’s potential but demonstrates your dedication and the serious thought you’ve invested in ensuring its success, thereby increasing your chances of getting the financial backing you need.

3. Understanding Your Market

Understanding your market is about knowing the tastes and preferences of your customers. A business plan involves conducting market research, understanding customer demographics, and analysing competitor strategies – all of which are essential ingredients in developing a product or service that meets the market’s demands.

4. Risk management

In business, you may experience some unexpected risks. Your business plan provides a framework for identifying these potential risks early on, from market shifts to operational hiccups, allowing you to develop risk management strategies that could save time, money, and maybe even your company.

5. Clarifying direction

It’s essential for every member of the team to pull in the same direction, knowing what the common objectives are. A defined business plan offers clarity, ensuring that the team’s efforts are coordinated and that every action contributes to the collective goals, embodying true teamwork spirit.

6. Setting priorities

Businesses often face the dilemma of choosing where to focus their efforts. A well-prioritized plan lays out not just what to tackle immediately, but also what can wait. This allows for a more productive allocation of time and resources, ensuring you address the things that’ll propel your business forward first and foremost.

7. Decision-making

The fewer uncertainties you have when making business decisions, the better. With a solid plan in place, decision-making is less about gut feeling and more about strategic choice. This can make the decision process far quicker and more effective, with reference points and insights directly from your business plan.

8. Attracting talent

Ambitious and skilled individuals are drawn to organisations with a clear vision and robust plan. A detailed business plan does not only impress potential investors but can also entice top talent to your team, those who are eager to participate in a visionary venture.

9. Measuring performance

A business plan sets out the key performance indicators that help you monitor your business’s health, gauge success, and pinpoint areas for improvement.

10. Adaptability

A static plan is of little use in a dynamic business environment. As such, a good business plan is designed to be revisited and revised. It allows you to pivot your strategies in response to market changes or internal business shifts, keeping your business agile and responsive to the ever-evolving demands of commerce.

In the end, your business plan is a statement of intent and a detailed guide for turning aspirations into reality. It’s more than a document; it’s the strategic backbone of your business, supporting every step you take towards achieving your goals. Whether you’re refreshing an existing company or starting from scratch, remember that a sturdy plan today lays the groundwork for tomorrow’s triumphs. So, grab your pen, chart your course, and let’s see your Australian business not just meet the challenges ahead, but thrive amidst them. Happy planning!

Read also: How to start a business in Australia

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In the dynamic landscape of entrepreneurship, having a solid business plan is often considered the cornerstone of success. Whether you’re launching a startup or seeking growth opportunities for an established enterprise, a well-thought-out business plan can be your guiding light. From attracting investors to providing a roadmap for your business’s future, here are five compelling reasons why having a business plan is essential:

Clarity of Vision and Direction: A business plan serves as a blueprint for your venture, outlining your goals, strategies, and the steps needed to achieve them. By articulating your mission, vision, and values, you gain clarity on what you aim to accomplish and how you plan to get there. This clarity is invaluable, especially in the early stages of a business when uncertainty is high. With a defined direction, you and your team can align your efforts towards common objectives, minimizing wasted resources and maximizing productivity.

Additionally, a well-defined business plan helps you anticipate challenges and opportunities, enabling you to pivot and adapt as needed. It serves as a roadmap that keeps you focused on your long-term objectives while navigating the inevitable twists and turns of the business landscape.

Securing Funding and Investment: Whether you’re seeking funding from investors, applying for a loan, or pitching to potential partners, a comprehensive business plan is essential. Investors and lenders want to see evidence of a viable business opportunity and a clear strategy for generating returns on their investment. Your business plan acts as a persuasive tool, demonstrating your understanding of the market, your target audience, and your competitive advantage.

A well-crafted financial section within your business plan, including revenue projections, expense forecasts, and cash flow analysis, provides potential investors with the confidence that you have a realistic grasp of your financials. Moreover, it showcases your commitment to prudent financial management, instilling trust and credibility in your business venture.

Setting and Achieving Goals: Goal-setting is fundamental to business success, and a business plan facilitates this process by helping you set specific, measurable, achievable, relevant, and time-bound (SMART) goals. By breaking down your long-term vision into actionable objectives, you create a roadmap for progress and growth. Whether it’s expanding into new markets, increasing market share, or launching innovative products, your business plan serves as a tool for tracking your progress and holding yourself accountable.

Moreover, regularly revisiting and revising your business plan allows you to adapt to changing market conditions, capitalize on emerging opportunities, and address potential threats. It’s a dynamic document that evolves alongside your business, guiding your decision-making and ensuring that you stay on course towards your desired outcomes.

Effective Communication and Alignment: A business plan is not only a strategic document for internal use but also a communication tool for external stakeholders. Whether it’s your team members, investors, suppliers, or customers, a well-articulated business plan helps convey your vision, goals, and strategies to all relevant parties. It ensures that everyone is on the same page regarding the direction and priorities of the business.

Moreover, a business plan fosters transparency and accountability within your organization. By clearly defining roles, responsibilities, and expectations, it minimizes misunderstandings and promotes teamwork and collaboration. When everyone understands their contribution to the broader vision, they are more motivated and empowered to work towards shared goals.

Mitigating Risks and Maximizing Opportunities: Every business venture involves inherent risks, from market volatility to competitive pressures. A business plan enables you to identify and assess these risks proactively, developing strategies to mitigate their impact and safeguard your business’s sustainability. By conducting a thorough market analysis, understanding your competitors, and identifying potential challenges, you can position your business to weather storms and capitalize on opportunities.

Furthermore, a business plan encourages strategic thinking and innovation, prompting you to explore new market segments, product offerings, or revenue streams. It provides a framework for evaluating different scenarios and making informed decisions based on data and analysis. In a rapidly changing business environment, the ability to adapt and innovate is crucial for staying ahead of the curve and sustaining long-term success.

In conclusion, a business plan is not just a document; it’s a strategic tool that drives success and sustainability in today’s competitive marketplace. From providing clarity of vision to securing funding, setting goals, facilitating communication, and managing risks, the benefits of having a well-crafted business plan are manifold. Whether you’re a budding entrepreneur or a seasoned business owner, investing time and effort into developing a comprehensive business plan is a decision that can pay dividends for years to come.

Work with a professional business plan writer today with Go Business Plans . Join the ranks of thousands of satisfied business owners who trust us with their business planning needs. With our experienced team of business plan writers and consultants, we’ve successfully assisted over 3,000 clients in launching and expanding their businesses. Whether you’re just starting out or seeking growth opportunities, we’re here to guide you every step of the way. Contact us at (855) 840-5451 or fill out our contact form to schedule your free consultation .

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7 Solid Reasons to Write a Business Plan

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7 Solid Reasons to Write a Business Plan (And How)

Last Updated: May 2, 2024 By TRUiC Team

The term “ business plan ” is used a lot like sugar-- it can make anything sound tastier. "Strategy" is also so overused and over-marketed that it’s become hard to nail down a useful definition.

Strategy, in this context, refers to the what-to-do and how-to-do-it of achieving your business goals. And while using the lingo is one thing, actually doing the planning and strategizing is another. Many startups today suffer because their plan isn’t clear or thorough enough to guide the business. Instead their team’s too busy creating products, rallying troops and hunting for clients-- and creating a winning strategy sounds like a lot of fluff when there’s “real” work to be done, right?

Without a clear strategy even the savviest solopreneur gets tossed around and distracted from what really leads to success. That said, let’s get to what you clicked for – brain food & actionable steps. Here are seven reasons to write a business plan and some guidance on getting started. Enjoy!

Recommended: Business planning software can help you write a professional business plan that will lead you to success.

Reasons To Write a Business Plan

1. increase the odds of success.

Building a business is something to be taken seriously. Tons of startups fail simply because the business owners/managers fail to think things through before plunging into the unknown. We don't want that to be you.

Business requires strategy, proper allocation of resources, refined approaches and squeaky-clean priorities. If you want your business to succeed and grow over time, creating a business plan is a no-brainer!

2. Secure Funding

Funding, funding, funding. Every business needs it and there never seems to be enough lying around. Bottom line, you have almost ZERO chance of getting funds from traditional sources like these without a thorough business plan:

Banks & Lending Institutions
Angel/Private Investors & Venture Capitalists
CrowdFunding Platforms like KickStarter or GoFundMe

All of these folks are going to want to see your business plan before they'll take you seriously.

Put yourself in this position, mentally: pretend you only have a week to prep your business plan before presenting it to an angel investor who's ready to hand you six-figures of debt-free funding. Would you feel confident in what you have to show them? Are you ready?

3. Valuation Purposes

You can’t know how much a business is worth at first glance. Maybe it seems to be doing great on the outside, but the truth is in the numbers-- in its financial health.

This is why banks and investors don’t really care what comes out of your mouth, they just want to see your business plan and skip to the numbers. How are things adding up? What’s the current estimated value and the projected valuation over x number of years?

Your business plan should have all these questions answered, and laid out in a well-formatted document with neat graphs, charts, snippets of info, etc.

4. Market Your Brand

A business needs a solid customer-base to grow, and in most cases you'll need to have a business plan before you can gain a solid audience. You need to create a concrete, hardcopy roadmap to guide you to your destination. Of course, there'll be plenty of unexpected obstacles to deal with along the way-- but without the map, you’ll be completely lost.

A business plan will help you market your business by deepening your understanding of your:

Marketing Budget
Core Pitch & Value Propositions
Targeting & Demographic Data
Competition & Market Analysis

Unless you have an incredible photographic memory and mind-blowing IQ, odds are you can't keep all this information organized in your mind-- especially if you're trying to run a business at the same time. Modern business planning software is simply essential.

5. Communicate Goals

Let’s say it’s time for your business to expand, to do some hiring and outsourcing.

You want passionate individuals. You want folks with similar work ethic. You want team members that will align with your brand’s culture and help it evolve-- but how to find them?

Your business plan is one concise document you can splice however you want and share with whomever you want. It'll help attract the right talent by spelling out your mission, defining your brand story, and communicating your company culture!

6. Set Management & Employee Objectives

A legitimate business plan includes specific objectives to keep the team and management on target. You don’t need to be super precise here, but rather set some general milestones and leave the micro-management to cloud-based tools like Slack, Google Docs, email, etc.

7. Provide Direction

For most entrepreneurs, a business plan is a pivot-point later on in their brand's development-- once it's absolutely necessary to have one. But why wait? Instead of delaying your concrete planning until after you’ve created a huge mess, hop aboard and update your methodology now.

This doesn't have to be as scary as it sounds. Over the last decade a few companies have totally revolutionized the conventional notion of business planning. Business plan software like LivePlan and Enloop are super streamlined and user-friendly. They make it easy for anyone to start strategizing!

How To Get Started

1. write it down.

It sounds like a no-brainer, but most people don’t do it. Start by simply writing down your strategy, even if you're a team of one.

There are several benefits to having a written strategy. It'll help you become more clear on why you do what you do. It'll help you craft your 30-second elevator speech. Most importantly, it will solidify your strategy in your mind and allow you execute it more thoughtfully!

2. Make Copy Crystal Clear

This is where a lot of companies need the most improvement. The average strategy is too vaguely worded: “We will be the best in class…” “Provide superior service…” “To be the [insert favorite business cliché here].”

A winning strategy has to be specific. If your strategy is to grow by 25 percent in the next 12 months, detail how you plan to make that happen. What niche and communication channels will you use? Which will you avoid? You need to be able to communicate the what and the how.

3. Leverage Strengths

Your strategy should capitalize on what you already do well. Define 3-6 of your company's strengths and make sure your strategy aligns with them.

For example, an event planner would naturally be adept with contract negotiation, schedule planning and coordinating minute details. On the other hand, real estate, maintenance and transportation might be outside the realm of their strengths, and thus should not be part of their business strategy.

4. Regularly Review Plans

I know of a CEO who reviews his business plan every week to make sure his actions are aligned. Every quarter he makes minor adjustments; every year he pulls his team together to renew their strategy. By constantly reevaluating your strategy, you can keep it fresh and applicable.

That said, in a startup it can be tempting to change your plan too quickly. If you made a diligent effort to craft a smart and specific strategy, be patient and give it time to work.

5. Eliminate Distractions

Don’t allow yourself or your team to lose sight of your goals in pursuit of the latest shiny object. If you’ve put the time and effort into creating an effective strategy, stick to it and let it filter what you choose to pursue and what you let pass by.

Review your strategy and determine whether it's specific enough. If you believe it is, I challenge you to have the courage to let it direct your actions.

Need Help? Try Software

1. liveplan.

We believe LivePlan is the best business planning software on the market. For between $11.66 and $19.95 per month (depending on whether you buy the annual or monthly plan) you get access to their incredible collaboration features, 10 beautiful optimized themes, and much more. They’re also fully compatible with most devices!

Provided you have the data, with LivePlan you'll be able to build a pitch-ready business plan in record time.

Enloop is also another safe, reliable option if you’re looking for high-quality business plan software.

Their free version can be buggy, but it'll help you get a sense of their services before committing to a paid plan (ranging from $9.95 to $39.95 per month). It'll introduce you to some of their awesome features, like their Performance Score, Multi-Currency Support, Financial Ratio Analysis and Interactive PDF Creation.

Meet the Authors

Larry Nicholson is an accredited small-business consultant and the founder and principal of BluPrint Consultants. His work involves providing guidance and management, product and service assessment, due diligence, leadership, and strategic planning advice to entrepreneurs, business owners, and leadership teams.

Aaron Armour, co-founder of Armour Martin Consulting , has been managing teams for more than 15 years, some as large as 200 employees. He has managed business units with as much as $36 million in revenue and projects with $50 million budgets. Aaron is passionate about helping managers lead their employees and thrill their clients.

The Top 5 Benefits of Having a Business Plan

Whether you’re starting a small business or exploring ways to expand an existing business, a Business Plan is an important tool to help guide your decisions. An effective Business Plan is a roadmap to success, providing clarity on all aspects of your business, from marketing and finance, through to operations, products, services, people and how you will be better than your competitors.

The purpose of a business plan is to help articulate a strategy for starting or changing your business. It defines how you will achieve your most important business objectives. A good Business Plan should help you to sleep at night if you are a business owner.

For existing businesses, a business plan should be updated annually as a way to guide growth and navigate expansion into new markets. Your plan should include explicit objectives for hiring new employees, what structure you will have, what products and services your business will provide, how you will promote them and how you will finance business operations.

If you are considering starting a business, a Business Plan can help you to check the viability of a business before investing too much time or money in it. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results.

The Benefits of Having a Business Plan:

1. Increased Clarity

A business plan can bring clarity to the decision-making process regarding key aspects of the business such as capital investments, leases, resourcing, etc. You can't do everything. A good Business Plan will help you identify business critical priorities and milestones to focus on.

2. Creation of a Marketing Roadmap

Marketing is an important aspect of a business plan. It helps to define your target market(s), target customers and how you will promote and place your product / service to these markets / customers.

3. Support for Funding

Whether you’re seeking credit from a bank or capital from investors, a business plan that answers questions about profitability and revenue generation is often required.

4. Helps to Secure Talent

For a business to succeed, attracting talented workers and partners is vital. Part of a business plan’s purpose is to help bring in the right talent, at the right time. Staff want to understand the vision, how the business will achieve its goals, and how they can contribute to this in their own roles.

5. Provides Structure

A business plan provides structure and defines business management objectives. It becomes a reference tool to keep the business on track with sales targets and operational milestones. When used properly and consulted regularly, it can help measure and manage your priority areas of focus.

Download your Business Plan template for $49.99 + GST here.

Many people engage us as business coaches to take a weekly / fortnightly step-by-step approach to the development of their own Business Plans, with the added benefit of our expertise and guidance throughout the process. In this way, you learn the essential aspects of running a successful business, while crafting your very own business plan over 8-12 weeks.

If you would like more information about how to create an effective Business Plan for your business, with our guidance, then please don't hesitate to contact Business Agility. We are business coaches who are former CEOs and MDs. We know what it takes to be successful in business.

5 Reasons to Double Down and Draft a Business Plan, Plus Tips for How to Do It There are plenty of good and necessary reasons for savvy entrepreneurs to invest time and energy to write a memorable business plan. Here are my top five.

By Tom Walker Edited by Jessica Thomas Nov 26, 2020

Opinions expressed by Entrepreneur contributors are their own.

These days, you just don't hear that much about business plans. The feeling from some corners of this industry — entrepreneurs and investors—seems that business plans have lost their snap, but I simply don't agree.

There are plenty of good and necessary reasons for savvy entrepreneurs to invest time and energy to write a memorable business plan. Here are my top five.

1. A well-thought-out business plan is a roadmap that becomes a living, breathing document for turning your vision into a real company with paying customers

Your business plan is the opportunity to demonstrate crisply that you understand your market, that you can solve a big problem for your customers and that your solution presents a value proposition that decision-makers will buy.

Writing a business plan is like catching a fish or painting a room. Most of the work is in the preparation. Ask questions. Drill down on the competition. Become a relentless scenario planner to identify likely outcomes and points of failure. From day one, be disciplined about collecting, protecting and organizing what you learn.

The genesis of your plan might well be scribbling on scratchpad or a Sharpie sketch on the back of a baseball program from a slow game. Your plan's foundation will be hard evidence of market validation from surveys and interviews with actual customers. The proof of the solution will be technical validation from impartial technical reviews and pilot prototypes. How you'll achieve it will be demonstrated through the experience and credentials of you, the founding team and your advisory board.

Related: 3 Apps to Help You Write a Business Plan

2. Writing the business plan gets everyone on the team on the same page

The rigor of "writing it down" creates a unique opportunity for you, your co-founders and the rest of your founding team to work together to express the business's intentions and hammer out the details to make that happen. There is no better process for proving to yourselves (and eventually to others) that your big idea can become a profitable company.

You can make plan-writing less cumbersome — there are plenty of useful tools and templates that manage the mechanics of producing a document, but don't believe it when someone tells you they can write your business plan. This is not work you can delegate. Put down your business plan in your own words and voice. Don't tackle it all at once. Divide the project into sections; write and rewrite something on it every day — trade drafts with other members of your team and advisors. Marketing reads products and technology. Finance reads market development and strategy. Technologists and product developers read the executive summary.

Accurately express your assumptions, expectations and rationale for the business for the next five years. This is the plan that you and your team are signing up to deliver. By putting it down, you are committing to it. It becomes the measure of your business performance.

Related: Business Plans: A Step-by-Step Guide

3. Writing a business plan shines a bright light on potential opportunities and vulnerabilities you might have missed

As you analyze the industry- and customer-specific data and knowledge you have assembled over the months, you have been working on your startup and expect to have a new perspective. You might discover things you had forgotten if that didn't register. Reviewing interview notes and survey results, you might see market patterns that you haven't identified before. Something might have changed in the economy, the industry or competition that marks certain prior responses as new opportunities or red flags.

4. Memorable business plans tell a good story — that story is the basis of your brand

Stories get people's attention and help them remember the facts. There's a classic archetype in fiction known as the hero's journey. It could just as well be called the entrepreneur's journey, and it's a perfect structure for telling your company's story. Like every hero's journey, every entrepreneur's business plan starts with a problem that must be solved. The startup team hears the call. Aided by mentors and allies and thwarted by enemies, the team tackles and masters ordeals to gain a reward.

Think of the many and varied occasions when you need and want to tell your company's story. There's your three-line elevator pitch — for everyone from your Uncle Chad to each potential investor you ever meet. There's the slightly longer version, for when a reporter or industry expert interviews you for a feature or a blog. There is a more detailed narrative to attract a business partner. Then, there's the coveted investor pitch, a laser-focused and well-crafted blend of data and story that delivers the facts and builds connections and trust with your audience. Every version of this story originates from the executive summary of your formal business plan.

Related: Let Your "Story' Frame Your Business Plan

5. Investors base their decisions for present and future funding on the business plan

Write a business plan that clearly and succinctly answers the questions investors want to ask. The top line is, why should someone invest in you? Investors invest in people first, then technology. Tee up the market problem and your solution from the customer's view. What are your achievements so far? How much money do you need, and how do you plan to use it? The most effective business plans tie milestones to capital.

Aim for a two-page, detachable executive summary and a 10-page plan, plus financials. Investors make fast decisions. If you don't capture their attention in the first three paragraphs of the executive summary, they will move on. Keep in mind that the best way to have your business plan read by a potential investor is to be referred by someone they know and trust.

Napkins are for catching spills, not for writing business plans. A viable business plan is never one and done. Once complete, it will time to update it again. A thoughtful and well-crafted business plan creates a strong first impression, demonstrates your credibility and evolves into a working document that guides your business from starting up through scale.

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President & CEO of Rev1 Ventures

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When you think about “writing a business plan,” what comes to mind? I know—it’s not exactly the most exciting part of launching a business. In fact, as “lean startups” proliferate and entrepreneurs conduct business in hoodies and flip-flops, the business plan may seem as outdated as a horse and buggy.

Entrepreneurs buzzing with excitement about their great new business ideas rarely want to sit down and spend weeks or months writing a business plan. As an impatient entrepreneur myself, I totally relate to this reluctance. Particularly if you’ve worked in an industry for a while—for example, you’re a software engineer and want to start your own software company—you may feel it’s redundant to write a business plan. You already know everything you need to know…right?

Another common misconception: “I don’t need a business plan, because I’m not looking for financing.” It's true that lenders and investors definitely want to see a business plan. And technically, if you’re not seeking money from outside sources, you don’t need a business plan to show others.

But the real reasons to write a business plan have nothing to do with other people: They have to do with you.

Doing some pre-startup homework and crafting a business plan now will make your life post-startup so much easier.

Here are 5 reasons every entrepreneur should write a business plan.

1. it forces you to think through all aspects of your startup..

Entrepreneurs generally focus primarily on the “big idea”—less on its execution. While the nuts and bolts aspects of a startup, such as setting up an accounting system, may not be spine-tingling, they’re essential. While writing a business plan, you are forced to consider how you’ll run every aspect of your business—marketing, managing, financing, and more. In fact, the very areas you’re tempted to skim over are usually the places where you need to really drill down. The business plan gives your startup a blueprint for success.

2. It highlights potential problems.

Would you rather uncover a major flaw in your business concept during the planning stage, or when you’ve already spent money on a location, inventory, and hiring? By spotlighting possible obstacles, your business plan lets you plan how to work around them.

3. You’ll be prepared for anything.

Even if you’re not actively seeking financing, what if an opportunity arises for someone to invest in your startup or otherwise help you launch? If your business plan is ready to go, you can hand it over and impress them. If it’s not, you’ll have to stall while you scramble to write your plan—leaving the impression your idea wasn’t well thought-out to begin with. Think like a Boy Scout and be prepared.

4. It will help you explain your concept.

Looking for vendors, business partners, or even employees for a business that doesn’t yet exist is a challenge. A business plan can help people visualize your future business and decide whether or not they want to be involved.

5. There is plenty of help out there.

Yes, a business plan involves some grunt work, such as market research and financial projections. But technology has made the planning process so much easier that there’s no excuse for skipping it. If you want in-person help, the experts at SCORE can walk you through the process of writing a business plan step-by-step. Also, read SCORE’s Business Plan Resources Page for tons of tools, templates, blogs, and webinars.

Business Plan Template for a Startup Business To increase your odds of a successful business startup, download this step-by-step business plan template you can use to plan for your new business.

Lean Business Planning for Better Management Discover the simplicity and ease of lean business planning, powerful approach to planning for any business—existing, startup or in the planning stage.

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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Why and How to Write a Business Plan

Many who take on the business world do so with just an idea. But without proper strategic planning, your new venture is bound to fail. The first step in the right business direction is to write a business plan.

What is a Business Plan?

A business plan is a formally drafted document that mainly consists of three things:

The goals of the business.
How you plan to achieve these goals.
The timeline for achieving these goals.

Your business plan should be your roadmap to success, with practical and actionable steps.

Why Does Every Entrepreneur Need One?

There are many reasons why every entrepreneur needs a business plan for their business, regardless of service, product, or industry. These are the most important reasons:

A Business Plan Acts as a Guide

A business plan is like your playbook. And just like any good sportsman knows, you’ll need to adjust the plan according to what’s happening in the actual match. However, it’s a very good starting point when it comes to strategic planning .

It’s a Look into the Future (But Just 3-5 Years)

To many, the thought of planning out an entire business in a business plan can be quite daunting. Yet, that’s just because they don’t understand that you don’t need to plan and project out a business’s entire existence.

A business plan should only entail between 3-5 years into the future. Furthermore, you should break down your business plan into smaller pieces. What is the plan for sales, marketing, operations etc.? Thus, a business plan in reality isn’t just one massive document containing a big, overarching strategy, but rather a document consisting of multiple mini-plans.

It Helps You Reach Your Goals

You can’t reach your goals if you don’t know what they are. That’s why it’s important to be as detailed as possible when you write a business plan. Besides, you should ensure that each business milestone has a specific date attached to it.

A Business Plan Can Get You Funding

The first thing a bank or investor will ask you, when you’re pitching a business idea for funding, is your business plan. A business plan brings peace of mind that you’ve thought this business through, you’ve done your strategic planning and that the business is a viable one. It will also assure investors that they will see a return on their investment. Therefore, you should keep all this type of essential information in mind when you write a business plan.

How to Write a Business Plan

As mentioned earlier, to write a business plan is not really so hard. It’s merely working your way from point A to Z while doing your strategic planning. To make life a little easier, we’ve compiled this nifty step-by-step guide to help you write a business plan:

1. Write Your Executive Summary

This is the overview of your business that will dictate whether anyone even digs further into your business plan in the first place. To say that this is an important part of your business plan would be an understatement. Please note that your Executive Summary should not be longer than one page and should include the following:

Your business concept (what the business does)
Goals & vision (what you would like to achieve)
Product/Service description & differentiation (your offering & why it’s different from the other offerings out there)
Your target market
Your marketing strategy
The current financial state of the business
The predicted future financial state of the business (projections)
The request (this is only for when you’re providing a business plan to the bank, investors or potential partners and need to lay out your expectation/requirements from them)
The team (who is currently involved in the business & who you are looking to recruit)

2. Write a Company Introduction

This is where you reveal the core of your business and why it exists. This introduction should include the following information:

What the company is officially registered as (partnership, sole proprietorship etc.)
In which industry you’re operating in
The basic business model
The business’s vision, mission and value proposition
A brief overview of the company’s history (if any)
The business’s objectives (long and short term)
The personnel and their individual salaries

3. Do a Proper Market Analysis

This section should dive into the depths of your target market. Who is your potential customer? How big is your target audience? What does the competition look like? Where do you see your company’s position in this landscape? This section will need a lot of research, a thorough SWOT and competitive analysis and well-informed guesses.

4. Draw a Basic Outline of the Management and Organization Structure

This is usually better to understand in the form of an organizational chart. It is also a good idea to add a few paragraphs on each team member, detailing the role they play and what they bring to the table. This ensures the growth of the business .

5. Create a Detailed List of All Products and Services

Describe your products and services (adding pictures is also a good idea when it comes to products). Describe what they entail, pricing, what makes them profitable and any other USP they might have.

6. Do Proper Customer Segmentation

This is where you start diving into greater detail regarding the target audience you already established. Everything from their age, income, location etc.

7. Draw Up Your Marketing Plan

This should be simple, so everyone understands, but detailed enough to be measurable. Things to include should be:

The product or service you’re planning on launching
The date of the launch
The revenue goal
All actions tied to reaching this goal, including their deadlines

8. Draw Up Your Logistics & Operations Plan

In this section, you need to lay out the following details:

These will obviously differ depending on whether your business is product or service-based.

9. Declare Your Financials

This is one of the most important sections when you write a business plan, especially when you’re looking for investment or funding. You should include the following information here:

An income statement
A balance sheet
A cash flow statement

There is no one way to write a business plan. However, if you really don’t know where to start, you can search for free templates online or purchase business plan software . This helps you to write a business plan in a way that’s generally understood and accepted by official institutions and professionals. Generally, there are three types of business plans: The traditional, the lean (which is basically a shorter version of the traditional) and the non-profit (these usually have add-on sections).

If you would like to get more helpful business advice and free resources, go to the Consultport Home Page .

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Nine reasons why you need a business plan

Building a great business plan helps you plan, strategize and succeed. Presented by Chase for Business .

Making the decision to create a new business is an exciting yet stressful experience. Starting a business involves many tasks and obstacles, so it’s important to focus before you take action. A solid business plan can provide direction, help you attract investors and ensure you maintain momentum.

No matter what industry you plan on going into, a business plan is the first step for any successful enterprise. Building your business plan helps you figure out where you want your business to go and identify the necessary steps to get you there. This is a key document for your company to both guide your actions and track your progress.

What is the purpose of a business plan?

Think of a business plan like a roadmap. It enables you to solve problems and make key business decisions, such as marketing and competitive analysis, customer and market analysis and logistics and operations plans.

It can also help you organize your thoughts and goals, as well as give you a better idea of how your company will work. Good planning is often the difference between success and failure.

Here are nine reasons your company needs a business plan.

1. Prove your idea is viable

Through the process of writing a business plan, you can assess whether your company will be successful. Understanding market dynamics, as well as competitors, will help determine if your idea is viable.

This is also the time to develop financial projections for your business plan, like estimated startup costs, a profit and loss forecast, a break-even analysis and a cash flow statement . By taking time to investigate the viability of your idea, you can build goals and strategies to support your path to success.

A proper business plan proves to all interested parties—including potential investors, customers, employees, partners and most importantly yourself — that you are serious about your business.

2. Set important goals

As a business owner, the bulk of your time will mostly likely be spent managing day-to-day tasks. As a result, it might be hard to find time after you launch your business to set goals and milestones. Writing a business plan allows you to lay out significant goals for yourself ahead of time for three or even five years down the road. Create both short- and long-term business goals.

3. Reduce potential risks

Prevent your business from falling victim to unexpected dangers by researching before you break ground. A business plan opens your eyes to potential risks that your business could face. Don’t be afraid to ask yourself the hard questions that may need research and analysis to answer. This is also good practice in how your business would actually manage issues when they arise. Incorporate a contingency plan that identifies risks and how you would respond to them effectively.

The most common reasons businesses fail include:

Lack of capital
Lack of market impact or need
Unresearched pricing (too high or low)
Explosive growth that drains all your capital
Stiff competition

Lack of capital is the most prevalent reason why businesses fail. To best alleviate this problem, take time to determine how your business will generate revenue. Build a comprehensive model to help mitigate future risks and long-term pain points. This can be turned into a tool to manage growth and expansion.

4. Secure investments

Whether you’re planning to apply for an SBA loan , build a relationship with angel investors or seek venture capital funding, you need more than just an elevator pitch to get funding. All credible investors will want to review your business plan. Although investors will focus on the financial aspects of the plan, they will also want to see if you’ve spent time researching your industry, developed a viable product or service and created a strong marketing strategy.

While building your business plan, think about how much raised capital you need to get your idea off the ground. Determine exactly how much funding you’ll need and what you will use it for. This is essential for raising and employing capital.

5. Allot resources and plan purchases

You will have many investments to make at the launch of your business, such as product and services development, new technology, hiring, operations, sales and marketing. Resource planning is an important part of your business plan. It gives you an idea of how much you’ll need to spend on resources and it ensures your business will manage those resources effectively.

A business plan provides clarity about necessary assets and investment for each item. A good business plan can also determine when it is feasible to expand to a larger store or workspace.

In your plan, include research on new products and services, where you can buy reliable equipment and what technologies you may need. Allocate capital and plan how you’ll fund major purchases, such as with a Chase small business checking account or business credit card .

6. Build your team

From seasoned executives to skilled labor, a compelling business plan can help you attract top-tier talent, ideally inspiring management and employees long after hiring. Business plans include an overview of your executive team as well as the different roles you need filled immediately and further down the line.

Small businesses often employ specialized consultants, contractors and freelancers for individual tasks such as marketing, accounting and legal assistance. Sharing a business plan helps the larger team work collectively in the same direction.

This will also come into play when you begin working with any new partners. As a new business, a potential partner may ask to see your business plan. Building partnerships takes time and money, and with a solid business plan you have the opportunity to attract and work with the type of partners your new business needs.

7. Share your vision

When you start a business, it's easy to assume you'll be available to guide your team. A business plan helps your team and investors understand your vision for the company. Your plan will outline your goals and can help your team make decisions or take action on your behalf. Share your business plan with employees to align your full staff toward a collective goal or objective for the company. Consider employee and stakeholder ownership as a compelling and motivating force.

8. Develop a marketing strategy

A marketing strategy details how you will reach your customers and build brand awareness. The clearer your brand positioning is to investors, customers, partners and employees, the more successful your business will be.

Important questions to consider as you build your marketing strategy include:

What industry segments are we pursuing?
What is the value proposition of the products or services we plan to offer?
Who are our customers?
How will we retain our customers and keep them engaged with our products or services and marketing?
What is our advertising budget?
What price will we charge?
What is the overall look and feel of our brand? What are our brand guidelines?
Will we need to hire marketing experts to help us create our brand?
Who are our competitors? What marketing strategies have worked (or not worked) for them?

With a thoughtful marketing strategy integrated into your business plan, your company goals are significantly more in reach.

9. Focus your energy

Your business plan determines which areas of your business to focus on while also avoiding possible distractions. It provides a roadmap for critical tradeoffs and resource allocation.

As a business owner, you will feel the urge to solve all of your internal and customers’ problems, but it is important to maintain focus. Keep your priorities at the top of your mind as you set off to build your company.

As a small business owner, writing a business plan should be one of your first priorities. Read our checklist for starting a business, and learn how to take your business from a plan to reality. When you’re ready to get started, talk with a Chase business banker to open a Chase business checking or savings account today.

For Informational/Educational Purposes Only: The views expressed in this article may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.

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Five reasons you need a business plan

Research has shown that those with a business plan are more likely to:

Secure funding – 36 per cent were successful with a plan compared to only 18 per cent without a plan; and
Increase business – 64 per cent saw growth in a 12-month period compared to 43 per cent who stayed the same, decreased or closed altogether.

But these aren’t the only advantages to having one, here are my top ten reasons you need an up-to-date business plan:

Vision – Your vision is an important part of your business. What you see your business potentially becoming is just as important as how you see your business right now. A business plan gives you the opportunity to clarify and express your vision in a way that others can understand and relate to.
Money – Not knowing which things to spend money on, spending money now when you should be saving it for a bigger project coming up later. Not knowing your monthly expenses or how much your income targets should be are all ways you can lose money without a proper plan. Your financial plan is an essential component of your business plan and a realistic estimation of your future projections can help guide your decision-making.
Customers – Similarly attracting the right customers doesn’t happen by chance either. A key component of your business plan should include identifying your audience. Knowing your ideal customer and things about them such as who they are, what they like, where they live, what makes them tick are the kind of things that your business plan should help you identify. Understanding your niche has benefits that flow onto other areas of your business including product design, your marketing message and even your advertising budget. Trying to appeal to everyone by not knowing or understanding who your real audience is, can be both costly and a waste of time and resources.
Success – A successful business is what we’re all striving for, but how can a business achieve success if they haven’t defined what success will look like for them? If they’re waiting for the day they’ll become a millionaire, without a clear map of the steps they’ll need to take to become one, they may as well just keep waiting. On the other hand, if they’ve mapped out exactly how much they need to make each day and how many products they’ll need to sell to make one million dollars and the resources and team they’ll need to do that then they have a far better chance of reaching that goal. Having a plan allows you to know what questions to ask, what goals to strive for and what needs to happen on a daily, weekly, monthly or annual basis to grow your business. As Confucius says “Man who plans for nothing, gets what he planned for.”
Health and wellbeing – If you don’t run the business, the business will run you. With no clear boundaries around your time and always more work to do, it’s easy to get into the habit of working almost 24/7. This “workaholic” lifestyle eventually starts affecting your health, your relationships with friends and family and ironically even impacts negatively on your business. This is not how your relationship with your business should be; your business should be like a friend who helps you not a burden who takes the best of you. A healthy and balanced life is an important part of having a successful business and knowing what you want for your life should be a part of your business plan too.

Katy Garner, co-founder of The Women’s Business School, The Business Mothers Collective and AusMumpreneur Network

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5 Good Reasons to Develop a Business Plan for Practice Ownership

If you have a goal of practice ownership, developing a business plan can help determine the viability of your new venture . A well-designed business plan details the practice’s financial structure and day-to-day operations. This may help show whether or not you have a realistic roadmap for success based on your carefully considered ideas on developing and managing your business.

Here are five reasons why developing a business plan can be important:

1) Helps you achieve your goals

Sitting down and actually writing out your plan — thinking, dreaming, researching, and documenting your objectives — may increase the likelihood of reaching your business and career goals. In addition, by creating a business plan you begin to understand your healthcare practice’s place in the market. This helps determine the necessary actions to improve and grow your business.

2) Helps you to be proactive

Developing a business plan for your healthcare practice can show the potential risks within the market so you can develop strategies to respond . Rather than simply reacting as changes come along, this gives you a defined roadmap to follow to guide you toward your goals. Your business plan helps you respond to changes and fluctuations in your business.

Without this written plan when changes arise, you may feel like you are floundering without an end in sight or a guideline to respond to unforeseen circumstances , such as a significant drop in the market, or new technology opportunities.

3) Functions as a communications tool

As a business owner, you may need to borrow funds or hire service providers at some point in your career. Your business plan helps communicate your business objectives to lenders, contractors, and equipment vendors who may need to understand your practice vision.

The business plan introduces you and your practice. It shows your lender that you have the personal know-how and professional means to help ensure practice success. It demonstrates that you have a solid grasp on the local market and outside influences impacting your future practice.

Your well-developed business plan may help provide the financial rationale the lender needs to approve lending funds for your practice purchase or start-up based on historical or projected performance.

4) Provides a competitive edge

A documented vision or plan for your healthcare practice shows you are prepared for the future . You are ready to take on the competition. Your business plan should detail your marketing plans to announce your opening, attract new patients, and grow your practice. It may also give you a jump-start on potential new competition .

5) Forms the basis for an exit strategy

Thinking about the future and selling your practice or retiring, your business plan helps potential buyers see your vision and gives them a roadmap. It shows how the practice evolved, whether it met expectations, and if you achieved your vision for the future of the practice. If you sell your practice before fully implementing and achieving your practice goals, the business plan may serve as a helpful guideline for future practice owners.

There are many more reasons to establish a business plan including sharing your vision with others, establishing a framework to attract new associates or investors, and providing a foundation for practice valuation . Careful formulation of a business plan allows you to focus on the future of your practice and ultimately may help shape your success.

If you don’t already have one, consider getting started working on your business plan today.

The team at LenDRgroup Consulting cares about the long-term success of your healthcare practice . We get to know you and your business in order to customize our practice financing and business consulting services to meet the needs of your practice and your career.

Our lending platform consists of 300+ dental and healthcare-specific lenders . It was developed with the purpose of helping dentists, veterinarians, and physicians. Let us help you achieve practice ownership and eliminate your practice financing obstacles!

To date, we have helped hundreds of healthcare professionals like you start, expand, and grow their practices. LenDRgroup Consulting recognizes and understands your business needs and can help you avoid costly mistakes . So, let’s get started.

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Five Reasons for a Business Plan

Many entrepreneurs subsist in small offices pondering how to obtain the next client. The problem emanates from a lack of planning. Given that 98% of most business fails in the first five years and the odds decrease marginally in the proceeding years, planning is the best means to ensure financial feasibility.

There are a multitude of reasons to develop a plan; here is the top five:

1. Developing a plan takes the information from your head and produces a structured format to ensure your business has feasibility. A business plan enables a proprietor to streamline operations and delete tangential items.

2. If you want to obtain venture capital you must have a formal plan. No lender will provide any money without one.

3. Planning enables entrepreneurs to gain focus. Too many get mired in reviewing capital and income yet the most imperative part of planning and often forgotten – customers. Entrepreneurs must develop an acquisition and retention plan.

4. To a certain degree a formal business plan assists in producing goals and standards. The business plan helps to produce entrepreneur accountability.

5. Business planning helps to develop buzz. Review any business plan and a significant portion of the plan resides with marketing. Planning forces entrepreneurs to choose a target market, integrated marketing communications to create value and tactical activities to grow brand. Producing this vital plan helps with budgets and prioritization.

Two vital components for business growth are passion and conviction. Yet the best business will fail without proper planning and development. Take the time to visit a consultant, business college or community incubator to help develop your plan. The investment of time and money might just be the tools needed to give your business foundation and the kick start needed to thrive.

Republished with author's permission from original post .

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Legal Templates

Home Business Business Plan

Business Plan Templates

Use our template to make an investment-worthy business plan.

Updated December 8, 2023 Written by Sara Hostelley | Reviewed by Brooke Davis

A business plan is a document outlining a company’s operations, strategies, goals, and objectives. It’s crucial to guide you through each stage of starting and growing your business.

Templates (8)

What is a business plan, why is a business plan essential, components of a business plan, how to write a business plan, business plan sample.

Below, you can find free business plan templates for specific business types. You can also find more in-depth information on writing a plan for your business, whether it’s a food truck, restaurant, real estate business, or another entity:

Create a detailed plan that lays out the details of how your business will achieve it's objectives.

Traditional Business Plan

Create a simplified version of a traditional business plan.

One-Page Business Plan

Create a Non-Profit Business Plan and learn how to write one.

Create a Daycare Business Plan and learn how to write one.

Create a Restaurant Business Plan and learn how to write one.

Create a Real Estate Business Plan and learn how to write one.

Real Estate

Create a Food Truck Business Plan and learn how to write one.

A business plan is a document detailing how a business, whether it’s a new or existing company, will achieve its goals and objectives. It guides you through every step of starting and running a company.

A business plan can be the foundation of your business, serving as a written roadmap that covers all aspects of how to structure, run, and grow your business. You can also refer back to it as your business progresses to track its growth and success.

In addition to being a helpful document internally, a business plan is also vital for a company to communicate its success to external parties that may influence its future success.

Consider some of the main reasons why large and small business owners alike use business plans:

1. Use As a Roadmap

A business plan sets specific, measurable, and time-bound goals. Having these goals helps you track progress, evaluate performance, and adjust as necessary.

By laying out goals, you have a clear and attainable plan of action with the ability to see and monitor your progress.

2. Plan Strategies For Potential Challenges

A business plan can help you think objectively about your business’s key elements and inform your decision-making as you move forward.

A detailed plan can provide a semblance of control over a potentially cumbersome process. Formulating a plan can improve your ability to make choices and decisions for yourself and the business. This approach is much better than suddenly making a critical decision without time to evaluate or haphazardly letting others decide for you.

3. Get Funding or Bring on New Business Partners

An accurate business plan is essential whether or not you need to secure a business loan. Investors and lenders often require a business plan before they commit capital. A solid plan demonstrates your commitment, viability, and potential return on investment.

Create a business plan that grabs the attention of potential investors and provides them with enough structure and confidence that they will move forward and grant funding and support to your business.

You can use your business plan to highlight how the proposed business will be successful and profitable.

4. Discover Any Weaknesses

A business plan includes a strengths, weaknesses, opportunities, and threats (SWOT) analysis that helps identify potential risks and challenges. It is essential to allocate resources and demonstrate monthly profit or loss. By recognizing these elements early, you can develop strategies to mitigate or address them.

5. Analyze the Market and Competition

Market research within the plan helps you better understand your target audience, competition, and industry trends. This knowledge is crucial for making informed business decisions.

By learning about your competition, you can help make your goods or services stand out and help validate your business idea.

You should update a business plan as you go, altering your goals as necessary and being mindful of any changes of direction in your business.

A typical business plan includes the following sections:

Executive Summary
Management Team
Products and Services
Customers and Marketing
SWOT Analysis

Our business plan template includes all of the above, so you won’t have to worry about missing out on essential sections.

Step 1 – Create an Executive Summary

An executive summary is the first section of a traditional business plan, serving as the first impression of your business. Please give a brief overview of your company, including its mission, key goals, and a snapshot of your financial projections.

You can skip this step if you’re writing a lean business plan for a startup. Instead, replace it with a few sentences outlining the problem your startup aims to solve and the solution you will provide.

Executive Summary Example:

Market research indicates there are a growing number of dog owners in Tallahassee who want to train their animals. Consumer surveys indicate that most consumers don’t have the time or resources to train their animals themselves.

Consumers have also expressed a desire for combined dog walking and training services to help discipline their animals.

Pawsitive Strides Canine Coaching & Walks provides a convenient service for customers with furry friends and disposable incomes.

Tips for Writing an Executive Summary

Define a problem in your market and state how your business will solve it.
Limit your executive summary to one page.
Use a tone appropriate for your audience.

Step 2 – Describe Your Company’s Team

A professional business plan will include a statement about your company’s team and management.

Describe your startup’s legal structure. After that, you can insert a chart to show the hierarchical structure of your company. Show and name your C-suite executives, management team, and key employees. Include short biographies and links to their resumes and LinkedIn profiles to give the reader a complete picture of your staff’s qualifications.

If you have a smaller staff, you can highlight the founder and CEO and your staff members who perform the services or create your business’s products.

Example for Company’s Team Statement:

Jamie Clayton, Founder and CEO

Board-certified veterinarian.

Pawsitive Strides Canine Coaching & Walks’s dog walkers and trainers

14 full-time staff members.
26 part-time staff members.
All staff members have the Certified Professional Dog Trainer-Knowledge and Skills Assessed (CPDT-KSA) credential from the Certification Council for Professional Dog Trainers.

Tips for Writing about Your Company Management and Team

Include any roles you’d like to hire to grow your company, if applicable.
Highlight expertise and awards one to show your staff’s capabilities.

Step 3 – Summarize Market Analysis and Potential

Your business plan must also thoroughly analyze your target market and customer base. The goal here is to show that you understand your market and target audience and that there is a viable market for your business.

Market Analysis Example:

Pawsitive Strides Canine Coaching & Walks’s ideal customer is a dog owner between the ages of 25 and 65 with a high disposable income. They’re ideally a working professional or have recently retired from the workplace. They love their dog (or dogs) and want them to be well-behaved and have an outlet for all their energy.

Market research shows that Pawsitive Strides Canine Coaching & Walks has ample opportunities in the Tallahassee area:

The total revenue for dog walking services in the U.S. increased from $900 million in 2019 to $1.1 billion in 2023.
Dog ownership has increased by 20% over the last five years.
Online search volume for “dog walkers in Tallahassee” is up by 10% since last year.
19% of Tallahassee’s residents have a household income of $125,000 or more (compared to the average of 5% across the U.S.).

Tips for Writing a Market Analysis

Use reliable sources for acquiring data.
Conduct consumer surveys to hear from people in your target area.
Focus on the demand in your area and the growth potential.
Include revenue and expense projections based on market data.

Step 4 – Describe Your Product or Service

Describe the products and services you offer. Pinpoint the value they provide to current and future customers and share your plans for research and development.

The main goal of this section is to convince the reader and yourself that your business is viable and that you have enough resources, time, and energy to achieve your goals.

Product Description Example:

Pawsitive Strides Canine Coaching & Walks isn’t an ordinary dog walking service. When a customer signs up for our monthly subscription plan, we have one of our certified dog walkers go to their house 12 times a month on a schedule that works for them.

Our dog walker takes their dog on a 30-minute walk and corrects their behavior. Their dog learns how to walk on a leash calmly and be around cars and people. Not only does the dog get some exercise and fresh air, but they also learn discipline, meaning the customer doesn’t have to worry about training their dog in this sense.

Tips for Writing a Product/Service Description

Highlight cross-sell and upsell opportunities, if applicable.
Emphasize what distinguishes you from other companies providing similar services/products.
Include details for updating your offerings in the future.

Step 5 – Plan Your Marketing Strategy

Discuss the brand vision you want to cultivate, the metrics you’ll track, and the channels you’ll use to reach your target audience. Outlining how you plan to collect and retain customers will help you experience growth in the long term.

Marketing Strategy Example:

Pawsitive Strides Canine Coaching & Walks will focus on social media and direct mail marketing as its two main forms of advertising. We’ll track customer referrals to determine how many current customers are satisfied with our services.

On our social media platforms, including Instagram and Facebook, we’ll track our audience growth rate, bounce rate, and click-through rate.

Tips for Writing a Marketing Strategy

Add the budget/resources you have, if applicable.
Create strategies for marketing to different segments within your main target audience.

Step 6 – Conduct SWOT Analysis

Organizations use SWOT analyses to determine how closely a business will adhere to its growth trajectories. This analysis involves looking at a company’s SWOTs, which are:

Strengths: Strengths are things your company does well. Examples include having a unique selling proposition, standout brandings, or human resources, like your employees and C-class executives.
Weaknesses: These barriers prevent your project or company from reaching certain milestones. Examples include financial limitations, a shortage of skilled professionals, and unclear selling propositions.
Opportunities: These positive external factors could give you a competitive edge. For instance, if you’re a manufacturer and the federal government cuts tariffs, you can export your products into a new market to boost market share and sales.
Threats: These are events, competitors, and situations that pose a risk to your company and the goals you’ve set for it. Typical threats include negative media coverage, changing customer demands, emerging competitors, and new rules and regulations.

SWOT Analysis Example:

Appeals to people who don’t have the time or resources to train their pets.
Low startup costs.
Finding enough certified employees to meet the anticipated demand.
Dealing with aggressive animals may be challenging for newer employees.

Opportunities

Offering multiple subscription packages for customers who want more frequent training sessions for their pets.
BehaviorBuddies is a dog walking service in Bradfordville that may take away customers.

Tips for Writing a SWOT Analysis

Be honest with your business’s weaknesses and threats.
Capitalize on opportunities you find through market analysis.

Step 7 – Develop a Strategy for Operations

Your business plan needs to include a thorough operations plan. This section reveals your manufacturing, fulfillment, managing, staffing, hiring strategies, and all the other processes you go through when running your business daily.

Operations Strategy Example:

Jamie Clayton will oversee the hiring of all employees, and the team lead will train all employees for at least one month to ensure they have the knowledge necessary to deal with animals of all temperaments.

The team lead will also organize the dog walking schedule to ensure all team members have enough time to arrive at customers’ houses and complete the dog walking/training sessions thoroughly.

Tips for Writing a Business Strategy

Consider what your business needs to thrive on a daily basis.
Account for inventory and supplies, even if your business is service-based.

Step 8 – Compile Your Business Financials

Create financial projections, including income statements, balance sheets, and cash flow statements for the first few years of operation. If you need funding, specify the amount and how you plan to use it.

Financial Statement Example:

Income Statement for the Year Ended December 31, 2023

Revenue: $150,000
Cost of Goods Sold: $30,000
Gross Profit: $120,000
Operating Expenses: $80,000
Net Operating Income: $40,000
Other Income/Expenses: -$2,000
Net Income: $38,000

Tips for Writing a Financial Section

Double-check the accuracy of financial information.
Demonstrate how the proposed funding aligns with your company’s goals.
Forecast future financial performance.

Step 9 – Explain Your Funding Request

If you’re seeking funding or investment for your business, explain the amount you need and how you intend to use it. Be transparent about the terms you’re offering to investors or lenders.

Funding Request Example:

Pawsitive Strides Canine Coaching & Walks has already hired a team to serve our existing customers. Once we scale to $500,000 in annual revenue over the next two years and at a 10% profit margin, our primary ongoing annual expenses (not including taxes) will total $350,000.

While already profitable, we are requesting $200,000 in the form of a business loan to buy two additional company vehicles. These vehicles will improve our employees’ ability to get to customers’ homes, and the remaining money will go toward maintaining current company vehicles.

Tips for Writing a Funding Request

Add a timeline so investors know your goals and how you plan to use the money.
If you seek funding in the form of an exchange for equity, an investor may expect to gain decision-making powers in your company. Plan for this situation accordingly.

Step 10 – Compile an Appendix for Official Documents

Include relevant documents, such as resumes of key team members, legal agreements, market research data, product design mock-ups, and your business’s legal structure documents.

Remember that each business plan is unique, so tailor your content to your venture and audience. Your business plan should effectively communicate your vision, strategy, and financial viability to potential investors, partners, and stakeholders.

Combine the appendix with a table of contents and footnotes section so you can reference it throughout your document.

You can download a free business plan template below in PDF or Word format:

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

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

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

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

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

How to create a social media strategy:

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

What is a social media marketing strategy?

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

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

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

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

Creating your own social media marketing strategy (video guide)

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

How to create a social media marketing strategy in 9 steps

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

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

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

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

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

track your social media goals in a social media strategy doc, like this one.

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

Track meaningful metrics

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

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

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

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

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

Screenshot of chart showing how social media goals should align to business objectives for an effective social media marketing strategy.

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

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

Step 2. Learn everything you can about your audience

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

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

Average income
Typical job title or industry

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

Document important information about your target customers in your social media strategy doc

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

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

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

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

Step 3. Get to know your competition

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

Conduct a competitive analysis

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

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

track essential information about your competitors in your social strategy doc

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

Use social media listening

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

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

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

Try Hootsuite for free. You can cancel anytime.

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

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

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

Step 4. Do a social media audit

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

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

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

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

Screenshot of a social media audit spreadsheet for building an effective social media marketing strategy

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

To help you decide, ask yourself the following questions:

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

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

Look for impostor accounts

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

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

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

Here’s how to get verified on:

X (Twitter)

Step 5. Set up accounts and improve profiles

Decide which networks to use.

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

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

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

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

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

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

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

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

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

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

Set up your profiles

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

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

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

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

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

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

Optimize your profiles (and content) for search

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

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

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

Step 6. Find inspiration

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

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

Social media success stories

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

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

Award-winning accounts and campaigns

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

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

Your favorite brands on social media

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

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

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

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

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

Source: lushcosmetics on X

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

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

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

Ask your followers

Consumers can also offer social media inspiration.

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

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

Step 7. Create a social media content calendar

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

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

Set your posting schedule

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

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

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

Hootsuite’s Best Time to Publish feature

Determine the right content mix

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

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

You might decide that:

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

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

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

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

The 80-20 rule of social media publishing

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

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

The social media marketing rule of thirds

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

document your content pillars in your strategy doc

Don’t post too much or too little

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

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

Start with these posting frequency recommendations:

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

How often to publish on social media by each platform

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

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

Try It Free

Step 8. Create compelling content

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

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

The idea here is to:

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

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

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

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

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

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

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

This brings us to Step 9.

Step 9. Track performance and make adjustments

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

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

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

Look at performance metrics

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

Benchmark your results

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

If you’ve got Hootsuite Analytics , you can use our built-in social media benchmarking tool to compare the performance of your social accounts against the average of brands in your industry with just a couple of clicks.

You can set up custom timeframes, switch between networks — Instagram, Facebook, X (Twitter), LinkedIn, and TikTok — and look up benchmarks for metrics like followers, audience growth rate, engagement rate, clicks, shares, and much more.

You’ll also find resources to improve your performance right in the summary section:

Industry benchmarking in Hootsuite Analytics: Performance summary with dedicated resources for improvement

Re-evaluate, test, and do it all again

Once this data starts coming in, use it to re-evaluate your strategy regularly. You can also use this information to test different posts, social marketing campaigns, and strategies against one another. Constant testing allows you to understand what works and what doesn’t, so you can refine your social media marketing strategy in real time.

You’ll want to check the performance of all your channels at least once a week and get to know the basics of social media reporting so you can track your growth over time.

Pro tip: If you use Hootsuite, you can review the performance of all your posts on every network in one place. Once you get the hang of checking your analytics, you may even want to customize different reports to show specific metrics over a variety of different time periods.

Surveys can also be a great way to find out how well your social media strategy is working. Ask your followers, email list, and website visitors whether you’re meeting their needs and expectations, and what they’d like to see more of. Then make sure to deliver on what they tell you.

Finalizing your social media strategy

Spoiler alert: nothing is final.

Social media moves fast. New networks emerge, others go through demographic shifts.

Your business will go through periods of change as well.

All of this means that your social media marketing strategy should be a living document that you review and adjust as needed. Refer to it often to stay on track, but don’t be afraid to make changes so that it better reflects new goals, tools, or plans.

When you update your social strategy, make sure to watch our 5-step video on how to updating your social media strategy for 2024:

Social media strategy template

Ready to start documenting? Grab your free social media strategy template below!

What’s next? When you’re ready to put your plan into action, we’re here to help…

Save time managing your social media marketing strategy with Hootsuite. From a single dashboard you can easily:

Plan, create, and schedule posts to every network
Track relevant keywords, topics, and accounts
Stay on top of engagement with a universal inbox
Get easy-to-understand performance reports and improve your strategy as needed

Try Hootsuite for Free

With files from Shannon Tien .

Do it better with Hootsuite , the all-in-one social media tool. Stay on top of things, grow, and beat the competition.

Become a better social marketer.

Get expert social media advice delivered straight to your inbox.

Christina Newberry is an award-winning writer and editor whose greatest passions include food, travel, urban gardening, and the Oxford comma—not necessarily in that order.

Amanda Wood is a senior social marketing professional who combines analytical and creative thinking to build brands.

As head of social at Hootsuite, Amanda oversees the global social strategy encompassing organic and paid social on Instagram, Facebook, Twitter, TikTok, and LinkedIn, a social engagement and listening strategy, and an employee advocacy program.

As the leader of a high-performing social team, she has extensive experience collaborating with creatives to bring campaigns to life on social and drive business results.

How To Set and Exceed Social Media Goals [9 Examples]

Struggling with structuring your efforts on social? Set yourself up for success with our guide to setting and achieving smarter social media goals.

How to Run the Easiest Social Media Audit [FREE TEMPLATE]

A social media audit is the best way to review and improve any social marketing strategy. Check in on your efforts with this free template.

How to Create a Social Media Calendar and Stay Organized

Social media content calendars are the best way to plan and organize your content. Build one in 4 easy steps or use our free templates.

Social Media Marketing Tools: The Complete Guide

Automate your work, save time, and build better relationships with your audience by using the right social media marketing tools.

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.

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8 Reasons Why Your Internet is Slow (and How to Fix It)

Expert tips to banish slow internet speeds

Tired of endless buffering circles, slow downloads, and laggy browsing? Slow internet today means slow everything, but who has an extra afternoon to sacrifice to the tech troubleshooting gods? Fortunately, it’s very possible there’s a quick and easy fix for your sluggish home network.

Your slow internet speeds are probably caused by one of these eight very common network issues. You can fix most of these issues yourself; some only take a few minutes—we’ll start with those. It is possible that you have a more complicated issue on your hands; we’ll go over these instances, too, and provide you with some additional in-depth troubleshooting resources.

Fed up with slow internet? Check out your other options.

Enter your zip code below to see if a faster plan is available in your area.

Jump to: Why is your internet so slow? | How to fix your slow internet connection | Other reasons your internet is slow | More ways to speed up slow internet | FAQ

Why is your internet so slow?

We provide more detail on each of these potential internet slowdown causes further down the page. Click on an issue to auto-scroll to the solution.

Here are the most common reasons for a slow internet connection:

1. You need to restart your modem and router Equipment restarts are hands down the most effective internet troubleshooting solution. This should always be your first step.

2. Your home network is congested Congestion happens when you overload your internet connection with more traffic than it can handle. To fix it, you can either lower your internet usage or upgrade to a faster plan.

3. You need a stronger Wi-Fi signal You experience a weak Wi-Fi signal when you’re too far from your router, when the signal is forced to pass through obstructive materials, or when other Wi-Fi networks and electronic devices introduce interference. You can fix it by extending your Wi-Fi range, choosing a better spot for your router, or adjusting your router’s settings.

4. Your network cables are damaged or loose Damaged or even loose Ethernet and coaxial cables can cause major slow downs and interruptions. Your cables may not be connected probably or damaged from excess stress, kinks, or even chewing from pets.

5. You need to update your devices It’s not always your internet connection that’s causing the slowdowns, it could be one or more of your devices. If your slowdowns are limited to certain devices, you should start your troubleshooting efforts with those devices rather than your internet connection; sometimes, they just need a simple restart or an update.

6. You have high latency High latency causes your internet to feel sluggish and is particularly frustrating with highly time-sensitive activities like gaming and video calls.

7. Your provider’s network is congested Provider networks can get overloaded the same way your home network can: too much traffic and not enough bandwidth.

8. Your provider is throttling your connection Your ISP may be intentionally slowing down your connection for a number of reasons.

How Much Internet Speed Do I Need?

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Answer 6 questions and get a personalized internet speed recommendation!

How many people in your household use the internet/WiFi on a daily basis?

How many devices in your home connect to the internet, including tablets, gaming consoles, and smart devices?

How many people in your household work from home?

What video quality do you use for streaming TV and movies?

How intensely does your household participate in online gaming?

Does your household download large files from the cloud or via the internet?

Our minimum speed recommendation for you:

How to fix a slow internet connection

1. you need to restart your modem and router.

As the golden rule of internet troubleshooting, an equipment restart should always be your first step. It’s quick, easy, and effective.

The restart process is the same for a modem, router, or gateway (modem/router combo unit):

Step 1: Unplug the power cable from the back of the modem, router, or gateway.

Step 2: Wait 60 seconds.

Step 3: Plug the power cable back into the back of the equipment.

Step 4: Wait for the equipment to reboot (this can take up to 20 minutes).

2. Your home network is congested

Your slow speeds might be the result of trying to do too much at once on your internet connection. Think of your internet connection as a road directly to your house. One car’s worth of people (or internet data) can reach your house at a time. If there are three cars trying to get there, they have to line up to get to your house. And if more cars arrive as the others are waiting to reach your house, you get a traffic jam.

Here’s how you can tell if you need to upgrade your internet plan:

Use our internet speed test to see if you’re getting the speed advertised by your ISP. If your results are close to your plan speed, consider upgrading.

Download speed 000 Mbps

Upload speed 000 Mbps

Latency (ping) 00 ms

Jitter 00 ms

You can also fix home network congestion by dialing back your internet usage. Thankfully, there are severa l easy ways to do this that don’t include yelling at everyone to get off the internet so you can attend a Zoom meeting.

Here are a few tips on how to manage your home network traffic:

Use QoS settings to prioritize certain online activities

Many routers have a quality of service (or QoS) component that allows you to prioritize certain types of traffic on your home network. For example, you can make sure your streaming data always gets first access to available bandwidth for smooth playback.

Not all routers have adjustable QoS, but if your router does, you’ll find the controls in your router’s web interface. If you need help accessing your router’s settings see our guide on how log into your router .

Prune your internet connections

There may be some devices connected to your network that you rarely use—if at all. Even if you’re not actively using these devices, it still uses bandwidth for updates and other background services. Your router may even have a limited number of devices it can connect to simultaneously, and start kicking some of them off the network when you go over the limit.

One simple way to take stock of all the devices using your network is to load your router’s web interface and view the network map. You will see all connected devices, whether they’re active or not, so you can block the ones you never use. Some routers have an app you can use instead of a web interface.

Another method is to change the Wi-Fi password, but that only applies to wireless devices . Once you do , you must manually reconnect every device .

Stagger bandwidth-hogging activities

If your connection can’t handle everyone online at once, stagger your internet activities so everyone gets a chance at an uninterrupted connection.

Also, make sure to schedule big downloads (like computer and game updates) during times when other people won’t be online.

Put visitors on a guest network

You can create a second guest network using your router’s web interface or mobile app. A guest network allows you to limit how much bandwidth guests can use, and what services and websites they can access . It also provides improved security by preventing guests’ devices from mingling with your devices, so there’s no worry about guests spreading malware to everything you use. Our guide on how to set up guest Wi-Fi covers a few different ways to establish a second network.

3. You need a stronger Wi-Fi signal

Walls, distance, and interference from other Wi-Fi networks can weaken your Wi-Fi signal. Weaker Wi-Fi signals mean slower speeds and frequent disconnects .

You can tell if signal interference and weak Wi-Fi signals are your issue by looking at your devices Wi-Fi meter . For fast connection, we recommend ensuring you have at least three bars of signal strength.

To fix weak Wi-Fi, first, check your router’s placement. Y ou want to make sure your router is in a central and elevated location and away from things that can affect your Wi-Fi signals (like walls, Bluetooth speakers, etc.). Sometimes, even moving your router a few feet can make a big difference. See our guide on choosing the best spot for your router . We also have a walkthrough on how to move your router to another room , which may be required to get adequate Wi-Fi coverage throughout your home.

If that doesn’t work, you might need to replace your router with one designed for longer ranges or better coverage—or you can add an extender to your network to stretch Wi-Fi signals into a previously unreachable area .

Check out our guides on how to extend your Wi-Fi range and long-range routers if you need better Wi-Fi coverage.

4. Your networking cables are loose or damaged

Loose or damaged networking cables can degrade your internet signal, introduce signal interference, or even cutoff your bandwidth altogether. The first step to make sure everything is connected properly.

Start with your Ethernet cables, which look like and oversized phone line and are used to connect devices directly to your router and connect your router to your modem (unless you have an internet gateway, which is both a modem and a router). Check that the cable is fully inserted in the sockets on the modem, router, and any devices connected directly to your router; it should make an audible click when it plugged in; if it doesn’t, the plastic spring clip is worn and the cable should be replaced. Also, check for any kinks, tears, chew marks, or any other obvious sign of wear and tear. If you see damage, replace the cable, there’s no fixing it. If you have an internet gateway instead of a modem and router and you use Wi-Fi for all your devices, it’s possible you’re not even using any Ethernet cables in your home network.

Next, check the cable that delivers internet signal to your modem or gateway. If you have cable internet, it will be a coaxial cable. If you have fiber, it could be a fiber-optic cable or Ethernet cable. Check that the coaxial cable is screwed on hand-tight to the back of the modem or gateway. And again, look for any signs of damage; if you spot damage, you need to replace the cable.

5. You have high latency

Latency is the time data takes to make a round trip from your device to the destination and back. A high latency creates noticeable lag: an extended duration between your physical actions and the results displayed on your screen. This can be particularly frustrating with online gaming or video calls.

High latency is difficult to work around. It depends partially on your physical distance from internet servers, network congestion between you and the servers , and your internet provider’s infrastructure—things that are mostly beyond your control. Internet type can also play into latency as well.

For example, satellite internet has high latency because all your data must travel to space and back, both coming and going to your device. Newer types of internet, including fiber and 5G mmWave , have lower latency because they can handle faster signals.

If you’re looking to lower your latency for a better connection, check out our report on the fastest ISPs . It dives into which internet services have the best tested speeds and lowest average latency.

6. Your devices need an update or are outdated

The problem might not be with your internet connection—it might be with the device you use . Your computer, tablet, phone, or gaming console could need an update or be too old to process today’s Wi-Fi speeds.

For example, the old (but much loved) PlayStation Vita handheld console supports up to 150 Mbps per second because it uses a Wi-Fi 4 radio. That speed can decrease based on the router it connects to and the security protocol it uses. The Vita will never see speeds beyond that 150 Mbps limit.

If you have speed issues on a desktop or laptop, make sure you have the latest OS and networking updates. Then, try power cycling the device. This clears the memory of any junk, refreshes your connection, and cleans out unnecessary processes and temporary files. Speed issues tend to happen due to an overworked processor, and a quick power cycle—shutting it down completely for 30 seconds—will “clear its head.”

Other things that can slow down your devices include the following:

Too many open applications
Too many open browser tabs
Outdated software
Outdated drivers
The operating system needs to reboot to install updates
Patch downloads
App downloads

Avoid overwhelming your computer’s CPU by closing unused applications and browser windows. Keep your device’s operating system up to date by allowing auto-updates, and keep your antivirus definitions current.

7. Your provider’s network is congested

Your ISP is also susceptible to network congestion. It’s similar to congestion on your home network but on a larger scale.

If the congestion gets particularly bad, your internet provider may throttle internet speeds in your area to reduce traffic for the network.

Unfortunately, large-scale network congestion is out of your control, but you can try to work around it by s cheduling big downloads during non-peak hours, like in the middle of the night.

When dealing with heavy ISP slowdowns that don’t resolve, the only real fix is switch ISPs. Luckily, there are lots of new services available, like 5G home internet, Satellite, and new fiber developments. If you’re craving a shiny new ISP, run your zip code in the search bar below; chances are you have some new ISP options.

8. ISP throttling

Internet providers can throttle your speeds, causing a slow connection . We’ll go over throttling briefly here, but you can get a more in-depth look at the subject in our guide to network throttling .

We’ve already discussed a few circumstances where a provider might throttle your speeds—like if you go over your data cap or if there’s too much congestion in the network. But your provider might also slow you down if it flags your internet activity as potentially illegal or if it generally doesn’t want you to do a specific type of activity (like torrenting).

To see if your provider is throttling your internet, run a speed test normally and then run it again using a VPN. If your speeds improve with the VPN, congratulations! You’re throttled.

Other factors that affect your speed

Your internet plan’s maximum speed.

Internet speeds are measured in megabits per second (Mbps) . This refers to your connection’s total bandwidth, not the actual time data uses to make a round trip to a website and back—that’s called latency.

Providers usually advertise their internet speeds as “up to” a certain number of megabits per second, and there’s usually some fine print that says those speeds are not guaranteed. Internet providers are mostly in the clear legally if your internet doesn’t actually perform up to the highest advertised bandwidth.

Realistically, you may pay for 400 Mbps per month, but you may not see that maximum due to hardware issues between your internet provider’s operator—a device that communicates with multiple modems—and your physical internet connection. Utility pole connections, your buried cable, and so on all play a major factor in how your connection performs.

If you need a refresher on internet speeds and what they mean, check out our guide to internet speeds .

Your upload and download speeds

You upload and download data every day, whether you’re on a smartphone or a laptop. For instance, when you access a website, you upload a request to that website and then download temporary files from the site to view it in your browser.

If you don’t have issues with streaming on Netflix or downloading files but are still experiencing some symptoms of slow internet speeds, your issue might actually be with your upload speed.

Cable, DSL, and satellite providers give customers way less upload bandwidth than download bandwidth because most people request much more information from the internet than they send. Upload speed is typically an issue for heavy uploaders—like Twitch streamers , people who work with video or audio , or those who often have to share large files.

The best way to improve upload speeds is to switch to a fiber plan. Fiber-optic internet connections often give customers upload speeds equal to their download speeds. If you don’t know what kind of speeds you really need , check out our recommendations for upload and download speeds .

Your internet connection type

There are a few different technologies internet providers use to deliver your connection, like cable, fiber, satellite, or DSL. Your internet connection type p lays a huge factor in your overall speeds.

Satellite internet transfers internet signals from a base station to a satellite to a receiver at your home. Because all your information must travel such a long distance both ways, satellite internet can have very high latency compared to other types of internet, which slows things down.

DSL internet uses phone lines to carry data. It can’t handle the same amount of bandwidth as cable or fiber. DSL internet tops out at just over 100 Mbps, and its electrical signals tend to degrade in quality over long distances.

Cable internet is faster than DSL because it uses coaxial cables that have a higher bandwidth than phone cables . Speeds can reach up to 1,200 Mbps.

Fiber-optic internet is one of the newest types of internet, and it’s the best wired connection you can get. Fiber uses light pulses to send your internet data, so it has lower latency than other internet types as a whole. It can also carry much more bandwidth than cable or DSL, offering speeds up to 5 ,000 Mbps. It’s less prone to network congestion and offers equally high download and upload speeds.

Overall, DSL and cable are the most common internet types while fiber is newer but scarce. Satellite is best for rural areas where the other three types can’t reach.

More ways to speed up a slow internet connection

We provide some quick tips below to help speed up your internet connection. But if you’re ready to get to the bottom of your internet speed issues with some thorough troubleshooting, see our internet troubleshooting guide .

First, know your plan speed

You need to know how much speed you pay for each month and compare that number against the speed you’re actually getting now . Look on your paper bill or log in to your online account to see your plan’s advertised maximum speed.

Next, run a speed test and compare

Running a series of speed tests while connected to different points in your network can help you figure out where your speeds are slowing down. We’ll break the testing process down into two sections.

Part 1: Test the modem

Your first speed test is to see if you’re getting the correct speeds to your home compared with what you’re supposed to get from your internet provider . To get the most accurate results for your initial speed test, unplug your router from the modem and connect a computer to the same port on the modem using an Ethernet cable. If you have a wireless gateway, just plug it into one of the Ethernet ports.

Warning: We don’t recommend browsing the internet for extended periods of time without using a router. Your router has some excellent built-in security features that protect your network from viruses and malware.

This first test should give you results that are close to the speeds promoted with your plan. If not, try to track this issue over multiple days and times of day to establish a pattern. Contact your internet provider to talk about why you’re not getting the correct speeds if you continue to see lower than expected results .

Part 2: Test the router

If your modem isn’t the issue, the next step is to test the router. Plug the router back into the modem and run multiple speed tests using your wireless devices, and wired devices plugged into the router’s Ethernet ports.

If you see a vast difference between the modem and router tests, then your router is causing your connection slowdowns—or the Ethernet cable tethering your router to the modem.

Keep in mind that not all wireless devices experience identical speeds. Their connections depend on the hardware inside no matter what router you use, so a budget Samsung phone will have slower Wi-Fi speeds than an expensive wireless card plugged into your desktop.

To troubleshoot router problems, follow these steps:

Step 1: Unplug the router’s power , wait 30 seconds, and then plug it back in.

Step 2: Make sure all cables are connected securely and that all ports work.

Step 3: Update your router’s firmware. You can do this by logging in to your router’s web interface or mobile app . (Your ISP likely does this automatically, but it’s worth checking.)

Step 4: Reposition your router .

Step 5: Move wireless connections to the best Wi-Fi band .

Step 6: Change Wi-Fi channels in your router’s interface to find one that’s less crowded.

Step 7: Try a factory reset by pressing the reset button located on the back of your router.

If none of these steps work, you may need to upgrade to a newer or more powerful router. Internet tech advances rather quickly, and if your router is more than a few years old, it might be time to get yourself something more modern . If you’re looking for router-buying guidance, we have recommendations for the best long-range routers , the best modem and router combos , and the best routers for Xfinity .

Check for Wi-Fi dead zones

Wi-Fi problems can stem from multiple factors . It could be your router’s range, a crowded frequency channel or band, or signal interference caused by physical obstructions and other electronics.

You already know that you should place your router at a central and elevated location for the best coverage, so we’ll assume that you’ve already done that and pointed your antennas in the right direction.

Go to different areas of your house with a computer or smartphone and watch the Wi-Fi signal strength indicator. If you notice a lot of dead zones, you may need to move your router again (if they happen in areas where you normally need Wi-Fi) or invest in something to boost your Wi-Fi signal to that particular area. You can also make a Wi-Fi heatmap if you want to get more precise with it.

If you have more than a couple of issues with Wi-Fi dead zones, we recommend upgrading to a mesh networking kit . They usually ship with at least two nodes—one that connects to your modem and another that communicates directly with the first unit—to create a ”blanket” of coverage. There’s no centralized point, and you can easily add more nodes to extend coverage. Moreover, devices seamlessly switch between nodes as you move about the home or office.

If you prefer to stick with the traditional router, you could add a Wi-Fi extender or powerline adapter , However, we still prefer mesh router kits versus the router/extender setup .

Reorganize your Wi-Fi connections

If you’ve already pruned your Wi-Fi connections of unnecessary devices , it’s time to make sure all active connections are on the correct Wi-Fi band.

Most modern routers offer two Wi-Fi bands, which each create their own visible Wi-Fi network. By default, these are usually labeled with their frequency bands, but it might be different if you’ve changed your Wi-Fi network’s name.

These bands operate on two different frequencies: 2.4 GHz and 5 GHz. The 2.4 GHz frequency band has a better range, but it’s slower and more susceptible to signal interference from other electronics. The 5 GHz band is faster but can’t travel as far.

Basically, you want to use the 5 GHz band for most bandwidth-heavy applications like streaming or gaming. Devices that don’t need that much speed—like smart home devices— should use the 2.4 GHz band instead .

Typically, you can change the Wi-Fi band each device uses by logging in to the correct Wi-Fi network on each device. However, some routers broadcast only one network name and automatically selects the best frequency band for your device. This can be problematic if you really need the faster 5 GHz connection, but the router forces your device to use the 2.4 GHz band.

Change your Wi-Fi band’s channel

Changing your router’s channel is a standard troubleshooting suggestion, but it may not work, and here’s why.

All three frequency bands are divided into small 20 MHz channels, and routers combine these channels to make larger ones. Most modern Wi-Fi 5 and Wi-Fi 6 devices use 80 MHz channels when they connect to the 5 GHz band for the most speed, so routers use these by default.

The thing is, routers only list the smaller channels, so you may run a Wi-Fi diagnostics app and see that channel 36 is clear for you to use, but in reality, it’s probably being used by a neighboring network that, like yours, combines channels 36, 40, 44, and 48 to create one 80 MHz channel.

If that’s the case, your best bet is to select one of the higher 5 GHz channels (if they’re available to you) and hope for the best. Most standalone routers allow you to change the channel in the web interface or mobile app, but you usually can’t change the channel on a mesh system.

Check connected devices

As we mentioned before, sometimes the issue isn’t with your internet connection— it’s with the smartphone, computer, or tablet you’re using to access the internet . It may need a reboot, it may be outdated, or you have too many apps and programs open, bogging down the device’s processor.

Manage your network

If you’ve made it this far and you’re still experiencing problems with slow internet speeds, run through the tips in the home network traffic section of this post if you haven’t already.

Your speed issues most likely stem from your internet provider’s reliability or the traffic on your own home network. Even if you’ve organized and trimmed down your number of connected devices, you could still not have enough bandwidth at certain times of day to cover everything your network has to handle. The only solution to this is to either use the internet less or get a faster internet plan.

Check out every provider and plan in your area to see if you can get better speeds for a better deal.

Quick fixes for slow internet speeds (and why they work)

Before we dive in, download our internet speed test. Measuring your internet speed and knowing how it compares to the speeds you pay for is an important part of diagnosing a slow connection.

Fix #1: Power cycle your modem and router (or wireless gateway)

Your modem and router work hard , and sometimes they need to refresh with a quick power cycle. Simply pull the plug on both units, wait 30 seconds, and then plug the modem back into the wall outlet. Once it properly boots, do the same with the router.

In the case of a wireless gateway, pull the plug, wait, and plug it back in.

Draining both units of power allows them to clear the system memory, clear up any local communication issues, and reestablish fresh connections. Moreover, a power cycle allows the modem to resync with your internet provider’s operator—a device that communicates with multiple modems. It also refreshes your router’s public IP address.

Overall, a power cycle can really give your internet speeds a boost on your side of the modem.

Fix #2: Move your router to another location

Many people hide their routers or wireless gateways in closets, behind furniture , or down in basement s . Don’t be one of those people unless you want excessively bad Wi-Fi.

Instead , put as few physical barriers between your router and your devices as possible. Walls, floors, ceilings , doors, large furniture, and similar obstructions can barricade your Wi-Fi signals and reduce connection speeds , especially over longer distances.

Certain signals from other devices can also interfere with your wireless speeds. These include microwaves, Bluetooth speakers, baby monitors, and cordless phones.

For the best Wi-Fi coverage, place your router in a central, elevated location, or at a location where you use Wi-Fi the most, like in a home office .

Be sure to use your router’s external antennas ( if present ) to get better Wi-Fi coverage. Most router antennas broadcast Wi-Fi signals in an outward circle perpendicular to the antenna’s position . For instance, if the antennas are positioned vertically, the Wi-Fi signals broadcast horizontally in all directions.

That said, if you live in a one-story house, keep the antennas vertical. If you live in a multistory house, position at least one antenna horizontally so the Wi-Fi signals reach the additional floors.

Fix #3: Use the internet during off-peak hours

If you know there’s a big download in your future— the latest version of macOS or a 100 GB update for an Xbox Series X game—you might want to schedule a time when you don’t need to do anything else online. The early morning hours are ideal when everyone is asleep and no other downloads currently hog your bandwidth.

Operating systems tend to wait until the early morning hours when you’re fast asleep. Game updates, meanwhile, typically require you to manually start the download. Other updates aren’t quite so accommodating with your schedule.

If your internet gets too slow to stream during certain peak hours, download the content earlier in the day (or again, in the middle of the night) so you’ll be ready to binge watch all of Avatar: The Last Airbender without buffering -related interruptions.

Fix #4: Upgrade your internet plan

You may need a faster plan if more people live with you now, if you transitioned to working from home, or if you generally use the internet more than you did before. Enter your zip code below to find a speedier plan that’s available in your area .

How do I know if I need a faster internet plan?

What is type of internet plan is the fastest.

Fiber internet is the fastest type of internet connection you can get. Many residential fiber-optic internet plans offer speeds up to 5,000 Mbps. There are even some fiber plans that offer 10,000 Mbps of bandwidth. Additionally, fiber internet offers symmetrical speeds, meaning your upload speeds are just as fast as your download speeds—a handy feature for activities like zoom calls, twitch streaming, and uploading large files.

Read page in Spanish

Author - Austin Aguirre

Austin worked as a broadband technician installing and troubleshooting countless home internet networks for some of the largest ISPs in the U.S. He became a freelance writer in 2020 specializing in software guides. After graduating with a BS in technical communication from Arizona State University, he joined the team at HighSpeedInternet.com where he focuses on home network improvement and troubleshooting.

Editor - Cara Haynes

Cara Haynes has been editing and writing in the digital space for seven years, and she's edited all things internet for HighSpeedInternet.com for five years. She graduated with a BA in English and a minor in editing from Brigham Young University. When she's not editing, she makes tech accessible through her freelance writing for brands like Pluralsight. She believes no one should feel lost in internet land and that a good internet connection significantly extends your life span.

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Pandemic-related penalty relief

We’re issuing automatic relief for failure to pay penalties for certain 2020 or 2021 returns with assessed tax less than $100,000. This relief is to help taxpayers who didn’t get reminder notices during the pandemic-related pause in mailing IRS collection notices.

Find details in the December 19, 2023, news release and Notice 2024-7 PDF .

Taxpayers who don’t meet their tax obligations may owe a penalty.

The IRS charges a penalty for various reasons, including if you don’t:

File your tax return on time
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We may charge interest on a penalty if you don’t pay it in full. We charge some penalties every month until you pay the full amount you owe.

Understand the different types of penalties, what you need to do if you get a penalty and how to avoid getting one.

How you know you owe a penalty

When we charge you a penalty, we send you a notice or letter by mail. The notice or letter will tell you about the penalty, the reason for the charge and what to do next. These notices and letters include an identification number.

Verify the information in your notice or letter is correct. If you can resolve the issue in your notice or letter, a penalty may not apply.

For more information, see Understanding your notice or letter .

Types of penalties

These are some penalties we send notices and letters about:

Information return applies to taxpayers who don’t file or furnish their required information return or payee statement correctly by the due date.
Failure to file applies when you don’t file your tax return by the due date.
Failure to pay applies when you don’t pay the tax you owe by the due date.
Accuracy-related applies when you don’t claim all your income or when you claim deductions or credits for which you don’t qualify.
Erroneous claim for refund or credit penalty applies when you submit a claim for refund or credit of income tax for an excessive amount and reasonable cause does not apply.
Failure to deposit applies when you don’t pay employment taxes accurately or on time.
Tax preparer penalties apply to tax return preparers who engage in misconduct.
Dishonored checks or other form of payment applies when your bank doesn’t honor your check or other form of payment.
Underpayment of estimated tax by corporations applies when you don’t pay estimated tax accurately or on time for a corporation.
Underpayment of estimated tax by individuals applies when you don’t pay estimated tax accurately or on time as an individual.
International information reporting applies to certain taxpayers who fail to timely and correctly report foreign sourced financial activity.

Interest on a penalty

We charge interest on penalties.

The date from which we begin to charge interest varies by the type of penalty. Interest increases the amount you owe until you pay your balance in full. For more information about the interest we charge on penalties, see Interest .

Pay a penalty

Send us a payment or pay your taxes in full to stop future penalties and interest from adding up.

Remove or reduce a penalty

We may be able to remove or reduce some penalties if you acted in good faith and can show reasonable cause for why you weren’t able to meet your tax obligations. By law we cannot remove or reduce interest unless the penalty is removed or reduced.

For more information, see penalty relief .

Dispute a penalty

If you disagree with the amount you owe, you may dispute the penalty.

Call us at the toll-free number at the top right corner of your notice or letter or write us a letter stating why we should reconsider the penalty. Sign and send your letter along with any supporting documents to the address on your notice.

Have this information when you call or send your letter:

The notice or letter we sent you
The penalty you want us to reconsider (for example, a 2021 late filing penalty)
For each penalty, an explanation of why you think we should remove it

If a notice or letter we sent you has instructions or deadlines for disputing the penalty, pay careful attention. You must follow the instructions to dispute the penalty.

If you didn’t receive a notice or letter, get telephone assistance .

Avoid a penalty

You can avoid a penalty by filing accurate returns, paying your tax by the due date, and furnishing any information returns timely. If you can’t do so, you can apply for an extension of time to file or a payment plan.

Apply for an extension of time to file

If you need more time to prepare your tax return, apply for an extension of time to file . This does not grant you an extension of time to pay. A payment plan can help you pay over time.

Apply for a payment plan

If you can't pay the full amount of your taxes or penalty on time, pay what you can now and apply for a payment plan . You may reduce future penalties when you set up a payment plan.

Ultimate Guide to Choosing the Best Travel Insurance in June 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Traveling is an adventure, a leap into the unknown, a story waiting to unfold. But every story needs a safety net, and that's where travel insurance comes in. In this guide to the best travel insurance, we'll embark on a journey to help you better understand travel insurance and uncover the benefits that make it an indispensable companion for any traveler.

Our Picks for the Best Travel Insurance Companies

Best overall: nationwide travel insurance.

Runner-Up: AXA Assistance USA
Best for Cruises: Travel Guard
Best Reputation: C&F Travel Insured
Best for Pre-existing Conditions: Tin Leg Travel Insurance
Best for Digital Nomads: WorldTrips Travel Insurance
Best Low-Cost Option: Trawick International Travel Insurance

Best for Road Trips: Travelex Travel Insurance

How we rate travel insurance »

Compare the Best Travel Insurance Companies

The best travel insurance companies offer comprehensive coverage options for a wide range of people and needs. For this guide, we looked at coverage options, customizability, and the best companies for specific situations, such as pre-existing conditions.

Here are Business Insider's picks for the best travel insurance companies in 2024.

Trip cancellation coverage of up to 100% of trip costs (for cruises) or up to $30,000 (for single-trip plans)
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Three cruise-specific plans to choose from
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Annual travel insurance plans available
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong trip cancellation coverage
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Cancel for any reason coverage available
con icon Two crossed lines that form an 'X'. CFAR insurance not available with every single plan
con icon Two crossed lines that form an 'X'. Medical coverage is lower than what some competitors offer

Nationwide Travel Insurance offers many of the standard benefits you might see with a travel insurance policy. This can include things like trip cancellation coverage, so you can recover pre-paid costs or trip interruption in the event your vacation is interrupted by an unexpected event. There's also baggage delay coverage and medical coverage.

Cancel for any reason coverage available

Nationwide Travel Insurance is of the largest players in the travel insurance space, offering nearly endless options for any customer on the travel spectrum, including annual travel insurance plans which can offer frequent travelers the flexibility to "set it and forget it" on their travel insurance coverage.

Nationwide Essential also offers some of the most affordable policies in the market compared to similar plans from competitors, which makes it a great pick for just about anyone. Buyers can discuss bundling options as Nationwide also sells homeowners, auto, pet, and other insurance products. Its travel insurance quoting is just as easy as it has been with other Nationwide insurance products.

Read our Nationwide Travel Insurance review here.

Best Travel Insurance Runner-Up: AXA Assistance USA

Trip cancellation coverage of up to 100% of the trip cost
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Generous medical evacuation coverage
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Up to $1,500 per person coverage for missed connections on cruises and tours
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Covers loss of ski, sports and golf equipment
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Generous baggage delay, loss and trip delay coverage ceilings per person
con icon Two crossed lines that form an 'X'. Cancel for any reason (CFAR) coverage only available for most expensive Platinum plan
con icon Two crossed lines that form an 'X'. CFAR coverage ceiling only reaches $50,000 maximum despite going up to 75%

AXA Assistance USA keeps travel insurance simple with gold, silver, and platinum plans. Emergency medical and CFAR are a couple of the options you can expect. Read on to learn more about AXA.

Silver, Gold, and Platinum plans available
Trip interruption coverage of up to 150% of the trip cost
Emergency medical coverage of up to $250,000

AXA Assistance USA offers consumers a great option for no-stress travel insurance: low-priced plans, generous coverage limits on key categories including primary insurance on lost luggage, and up to 150% reimbursement for qualifying trip cancellations.

While add-ons are limited and rental car coverage is not included by default on cheaper plans, AXA is a perfect fit for travelers who don't plan to drive (or who already hold a travel credit card with rental car coverage), and don't need any additional bells and whistles.

Read our AXA Assistance USA Travel Insurance review here.

Best for Cruises: AIG Travel Guard

Trip cancellation coverage for up to 100% of the trip cost and trip interruption coverage for up to 150% of the trip cost

Check mark icon A check mark. It indicates a confirmation of your intended interaction. Trip cancellation coverage of up to 100% of the cost, for all three plan levels
Check mark icon A check mark. It indicates a confirmation of your intended interaction. CFAR covers up to 75% of total trip costs (maximum of $112,500 on some plans)
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Medical coverage of up to $500,000 and evacuation of up to $1,000,000 per person
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Includes COVID coverage
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Above average baggage loss and delay benefits
Check mark icon A check mark. It indicates a confirmation of your intended interaction. High medical evacuation coverage
con icon Two crossed lines that form an 'X'. Premiums may run slightly higher than competitors

Travel Guard is a well-established and highly rated name in the travel insurance industry. It offers three main coverage options to choose from, and in general its policies have above-average coverage for baggage loss and baggage delays, plus high medical evaluation coverage limits.

Trip cancellation coverage for up to 100% of the trip cost
Trip interruption coverage for up to 150% of the trip cost
Preexisting medical conditions exclusions waiver must be purchased within 15 days of initial trip payment
Annual travel insurance plan and Pack N' Go plan (for last-minute trips) available

Travel Guard is well-known insurance provider, and a great fit for travelers who want to ensure that they can get their money back in the event of canceled or interrupted travel plans.

While the company's policies can be pricey compared to its competitors, the high medical and evacuation limits make AIG a solid choice for older travelers who value peace of mind and simplicity over highly customizable plans that may be bolstered with medical upgrades.

Read our AIG Travel Guard review here.

Best for Reputation: C&F Travel Insured

Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers 2 major plans including CFAR coverage on the more expensive option
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Cancellation for job loss included as a covered reason for trip cancellation/interruption (does not require CFAR coverage to qualify)
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Frequent traveler reward included in both policies
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Up to $1 million in medical evacuation coverage available
con icon Two crossed lines that form an 'X'. Medical coverage is only $100,000
con icon Two crossed lines that form an 'X'. Reviews on claims processing indicate ongoing issues
C&F's Travel Insured policies allow travelers customize travel insurance to fit their specific needs. Frequent travelers may benefit from purchasing an annual travel insurance plan, then adding on CFAR coverage for any portions of travel that may incur greater risk.

While every travel insurance company has negative reviews about its claims process, C&F Travel Insured 's claims process has a consistent stream of positive reviews. One customer wrote that C&F processed a claim within 48 hours. Additionally, C&F regularly responds to customer reviews within one business week, making reviews a consistent way to reach the company.

Additionally, in C&F's fine print, it mentions that any claims that take more than 30 days to pay out will begin to accrue interest at 9% APY.

C&F's reputation isn't the only thing to speak highly of. It offers an array of add-ons uncommon in the travel insurance industry, such as Interruption for Any Reason insurance and CFAR coverage for annual plans. C&F also offers discounts for children on its Protector Edge plan and free coverage on its Protector plan.

Read our C&F Travel Insured review here.

Best for Pre-Existing Conditions: Tin Leg Travel Insurance

Check mark icon A check mark. It indicates a confirmation of your intended interaction. Policy coverage includes most pre-existing health conditions
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Generous medical and evacuation amounts for peace of mind
Check mark icon A check mark. It indicates a confirmation of your intended interaction. COVID coverage included by default on all insurance plans
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers a wide range of plans for various budgets and travel needs
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Some plans offer CFAR, “cancel for work reasons,” financial default, and unemployment coverage
con icon Two crossed lines that form an 'X'. Limited add-on coverage options
con icon Two crossed lines that form an 'X'. Baggage loss and delay coverage is low compared to competitors

Tin Leg travel insurance offers eight travel insurance plans to meet the unique needs of travelers.

Tin Leg was founded in 2014 by the travel insurance industry experts at Squaremouth. Designed to meet the most common needs of travelers, these policies offer comprehensive Trip Cancellation and Trip Interruption benefits, and a range of Emergency Medical and Medical Evacuation limits.

Tin Leg Travel Insurance is a great fit for travelers with medical issues in particular. Seven of Tin Leg's eight travel plans include coverage for pre-existing conditions as long as you purchase your policy within 15 days of your initial trip payment.

Thanks to coverage for pre-existing medical conditions as well as for potential COVID-19 infection while traveling, this company offers some of the best financial investment options for travelers who are or will be exposed to higher health risks and issues.

Read our Tin Leg Travel Insurance review here.

Best for Digital Nomads: WorldTrips Travel Insurance

Check mark icon A check mark. It indicates a confirmation of your intended interaction. Affordable base plans that can be customized with add-ons including rental car, pet care, hunting and fishing, and vacation rental coverage
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Insurance plans available for international student travelers
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Trip delay coverage benefit that kicks in after just five hours
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Pre-existing conditions waiver can be purchased within 21 days of initial trip payment
con icon Two crossed lines that form an 'X'. Lower medical, evacuation and accidental death limits
con icon Two crossed lines that form an 'X'. Limited, secondary baggage loss coverage although baggage protection can be upgraded at a low cost
con icon Two crossed lines that form an 'X'. No special coverages for pets, sports equipment, etc.

WorldTrips has been a reputable travel insurance provider for more than 20 years. Unsurprisingly, it boasts an A+ rating from the Better Business Bureau and positive reviews from thousands of customers.

Travel medical insurance (Premium, Group, Annual, and International Student options)
Trip cancellation insurance
Trip protection insurance

WorldTrips Travel Insurance has affordable premiums, highly customizable add-ons, and generous coverage for core categories of travel insurance. All this makes it a great option for digital nomads, students studying abroad and backpackers.

However, travelers should keep in mind that plans are not particularly flexible, and coverage amounts are limited unless you plan ahead to pay for the areas and amounts that you need.

Read our WorldTrips Travel Insurance review here.

Best for Affordability: Trawick International Travel Insurance

Trawick Trawick International Travel Insurance

Check mark icon A check mark. It indicates a confirmation of your intended interaction. Useful for adventurous travelers headed to higher-risk destinations
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Affordable plans with varying levels of coverage
Check mark icon A check mark. It indicates a confirmation of your intended interaction. 10-day free look option
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Generous baggage loss replacement policy
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Trip delay coverage kicks in after just six hours
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Some policies allow a CFAR add-on
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Up to $1 million medical evacuation coverage limit
con icon Two crossed lines that form an 'X'. Baggage and trip delay coverages don’t kick in until after the 12-hour mark
con icon Two crossed lines that form an 'X'. International student policies available for temporary stints abroad
con icon Two crossed lines that form an 'X'. Complaints about claims not being paid or involving an intermediary to resolve claims

Trawick International travel insurance offers plans customized to diverse travelers' needs. We look at coverage options, claims processing, pricing, and other important factors for savvy travelers.

Travel medical insurance
Trip protection and cancellation
International student insurance
Visitor medical insurance (for traveling to the US)

Trawick International Travel Insurance is another insurance provider with robust medical travel insurance that can help higher-risk and anxious travelers find peace of mind while on the road. This company offers one of the most generous medical evacuation policies in the market, although travelers will need to remember to add on rental car coverage if they need it.

Read our Trawick Travel Insurance review here.

Check mark icon A check mark. It indicates a confirmation of your intended interaction. Options to cover sports equipment
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Option to increase medical coverage
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Can cancel up to 48 hours before travel when CFAR option is purchased
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Affordable coverage for budget-conscious travelers
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Includes generous baggage delay, loss and trip delay coverage
Check mark icon A check mark. It indicates a confirmation of your intended interaction. Optional "adventure sports" bundle available for riskier activities
con icon Two crossed lines that form an 'X'. Only two insurance plans to choose from
con icon Two crossed lines that form an 'X'. Medical coverage maximum is low at up to $50,000 per person
con icon Two crossed lines that form an 'X'. Pricier than some competitors with lower coverage ceilings
con icon Two crossed lines that form an 'X'. Some competitors offer higher medical emergency coverage

Travelex travel insurance is one of the largest travel insurance providers in the US providing domestic and international coverage options. It offers a basic, select, and America option. Read on to learn more.

Optional CFAR insurance available with the Travel Select plan
Trip delay insurance starting at $500 with the Travel Basic plan
Emergency medical and dental coverage starting at $15,000

Travelex Travel Insurance offers three plans:

Travel Basic
Travel Select
Travel America

The Travelex America plan is meant for trips limited to the U.S., but it has the highest coverage limits in many areas compared to its other programs. If you're flying somewhere, the lost baggage limits are higher. Its natural strengths shine for road trippers, though. Travelex America adds coverage for roadside service and rental car coverage for unexpected accidents. It also covers pets should you be involved in an accident while on the road.

While your standard auto insurance does extend to car rentals within the U.S. for a limited time, any accident would affect future rates. Travelex would eliminate the risk of reporting to your auto insurance provider for minor incidents within its purview.

Read our Travelex Travel Insurance review here.

Introduction to Travel Insurance

Why travel insurance is a must-have.

The unpredictable nature of traveling – from flight cancellations to medical emergencies – can turn your dream vacation into a nightmare. Travel insurance acts as a personal safeguard, ensuring that unexpected events don't drain your wallet or ruin your trip.

Understanding Different Types of Travel Insurance

Not all travel insurance policies are created equal. From single-trip travel insurance policies to annual travel insurance plans , from minimal coverage to comprehensive protection, understanding the spectrum of options is your first step in finding the right fit for your journey.

Key Features to Look for in Travel Insurance Coverage

Travel insurance for medical emergencies.

Imagine falling ill in a foreign country; daunting, right? A robust travel insurance plan ensures you don't have to worry about how much emergency medical care while traveling will cost, even in the most remote corners of the globe. This coverage will often come in tandem with emergency medical evacuation coverage.

Trip Cancellation and Interruption Benefits

Life is full of surprises, some less pleasant than others. Trip cancellation and interruption coverage ensures that you're not left out of pocket if unforeseen circumstances force you to cancel or cut your trip short. You may also look for cancel for any reason and interruption for any reason options, which will reimburse you for a percentage of your nonrefundable fees, but expands the covered reasons you can cancel a trip. You can find our guide on the best CFAR travel insurance companies here.

Coverage for Personal Belongings and Baggage Loss

Losing your belongings is more than an inconvenience; it's losing a piece of your world. Insurance that covers personal belongings and baggage loss ensures that you're compensated for your loss, helping you to rebound and continue your adventure.

Support and Assistance Services

In times of trouble, having a lifeline can make all the difference. Look for insurance that offers 24/7 support and assistance services, giving you peace of mind that help is just a phone call away. Also, check websites that field customer reviews like Trustpilot, the Better Business Bureau, and InsureMyTrip , to see how well a company responds to customer requests.

Choosing the Best Travel Insurance

Reputation and reliability of the travel insurance provider.

A provider's reputation is not just about being well-known; it's about reliability, customer satisfaction, and the ability to deliver on promises. Researching and choosing a reputable provider is a cornerstone in ensuring your safety and satisfaction.

Understanding the Policy's Fine Print

The devil is in the details, and understanding the fine print of what your travel insurance policy covers is crucial. Be aware of coverage limits, exclusions, and the process for filing a claim to avoid any unpleasant surprises.

Customer Reviews and Feedback

In the age of information, customer reviews and feedback are goldmines of insight. Learn from the experiences of others to gauge the reliability and customer service of the insurance provider you're considering. While the ratings are important, you should also look at whether or not a company responds to customer complaints.

How to Get the Most Out of Your Travel Insurance

Knowing your policy inside out.

Familiarize yourself with every aspect of your policy – what it covers, what it doesn't, how to file a claim, and who to contact in an emergency. Being informed means being prepared.

Steps to Take When a Problem Arises

If you face an issue during your travels, knowing the immediate steps to take can make all the difference. Keep important contacts and your policy details handy, and remember, your insurance provider is there to assist you.

How to Pick the Best Travel Insurance Company for You

There isn't a one-size-fits-all policy that works perfectly for every traveler. Young, healthy solo travelers can opt for much cheaper plans that offer bare-bones coverage, while families juggling complex itineraries will do best by investing in a robust policy that can help defray any costs associated with lost baggage, delayed transportation or other trip-impeding obstacles.

That being said, you can't go wrong with a travel insurance provider that boasts a reputable history and offers a wide range of customizable plans. In some cases, you may be comparing plans that are only a few dollars' apart from each other. In such situations, you should generally opt for the insurance company that offers the strongest customer service. It's also worth considering whether or not the travel insurance provider has been reviewed by other travelers with similar itineraries to your own.

An insurance aggregator like InsureMyTrip or Squaremouth is one of the best tools for searching travel insurance policies. Once you input the specifics of your travel itinerary, you'll be able to see hundreds of search results to compare the ones that catch your eye. If the options are too overwhelming, use the filters to the left of your search page to eliminate as many irrelevant plans as possible.

How We Reviewed the Best Travel Insurance Companies

To come up with our list of the best travel insurance companies, we evaluated each insurer based on the following factors:

Guide Methodology: What We Considered

Policy Types

Travel insurance is essential, but often underused partly because people aren't getting what they want. Business Insider's 2023 travel study showed 10.65% of travelers surveyed bought cancel for any reason insurance. Cost may be a factor, but in many cases, the coverage is more affordable than you might think. Regardless, companies must offer a diverse range of coverage options. We award five stars to companies offering all standard coverages and additional options like pet and sports equipment protection.

Our 2023 travel study indicated the majority of purchases were made through the travel provider (ex: flight protection insurance when you're purchasing your airline tickets). While these may be sufficient for some customers, we look for companies offering a more comprehensive range of services.

According to the U.S. Travel Insurance Association, the average cost of travel insurance will be between 4% and 8% of total travel expenses. Anything beyond that price point should include additional benefits beyond the standard inclusions, such as CFAR protection or upgraded medical coverage. Anything below that 4% threshold may leave you lacking important or sufficient coverage in an emergency.

Convenience and Flexibility

Whether you're an infrequent traveler or a suitcase warrior, a good travel insurance company should have you covered. In many cases, you might not even have to talk to a person in order to purchase your policy.

Many people think of travel insurance in context with specific trips, but most of these top contenders sell both single-trip and multi-trip policies, also known as annual travel insurance. Some companies also offer plans specifically designed for cruisers, students abroad, and business travelers. (Read our guide to the best cruise travel insurance companies for more details.) Finally, all of these providers offer multiple options for getting the specific areas and amounts of coverage that you want.

Claims Handling

Most travelers never have a large claim. Premiums are low, and it provides peace of mind for the just in case situations. So they leave reviews based on their reduced stress levels. But what happens if you lose your luggage or have to stay a few extra days due to an unexpected accident? Will your insurance carrier cover your claim without all the hassle? We check real customer reviews to sort this out for you.

Ease of Use and Support

When purchasing, during your trip, and throughout the claims process, you may need extra support. Does the company have a 24/7 help line? Does it have an online or mobile system allowing you to self-manage? Essentially, what are the options when you need help? We look at the big picture to evaluate the average customer experience with each company.

You can read our full insurance rating methodology for even more details.

Best Travel Insurance FAQs

There isn't a one-size-fits-all solution for every traveler. Determine the benefits that are most important to you, like baggage delay coverage, medical coverage, and trip delay coverage, then look for a company with solid customer ratings, especially when it comes to processing claims.

Travel insurance will pay out if you experience a covered event, such as a travel delay or delayed or lost baggage. If you're looking to get travel insurance for a specific reason, such as needing to potentially cancel your trip due to work reasons, make sure your policy will cover you in that situation before purchasing it. You should also check customer reviews to see other travelers' claims experiences, as it varies wildly from company to company.

The average cost of travel insurance is 4% to 8% of your total trip cost, so it could vary widely depending on where you're traveling and the length of your trip. Your age, the number of people in your group, and other factors can also influence how much you'll pay.

Most comprehensive travel insurance policies include travel medical coverage that can come in handy if an emergency occurs and you need medical evacuation. Some travel insurance plans offer more specialized coverage for travelers with pre-existing conditions , so shop around if medical coverage is a top priority for you.

$100,000 should be a sufficient medical coverage limit for travel insurance. If you're planning on doing extreme sports or anything particularly risky on your trip, you may want to increase your coverage level. A high medical coverage limit is especially useful when you're purchasing cruise travel insurance, since medical evacuations are more involved at sea.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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Reporting by Yousef Saba, Olesya Astakhova, Vladimir Soldatkin; Writing by Dmitry Zhdannikov; Editing by Emelia Sithole-Matarise, Susan Fenton, Ros Russell and Giles Elgood

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Maha has been working as a Reuters journalist for over 15 years covering stories across the Middle East from Egypt, the Gulf, Yemen, Iraq, Syria, Lebanon and Jordan. She is currently Gulf Bureau Chief based in Dubai and continues to cover energy and OPEC policy. In her previous roles, Maha has overseen Lebanon, Syria and Jordan coverage as Bureau Chief based in Beirut and managed the energy and commodities file across the Middle East. Maha began her career with Reuters in Cairo.

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Building Your Business
Becoming an Owner
Business Plans

Why You Should Write a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

To Test the Feasibility of Your Business Idea

To give your new business the best chance of success, to secure funding, to make business planning manageable and effective, to attract investors, frequently asked questions (faqs).

The Balance / Getty Images

A business plan is the blueprint for your business. Starting a business without a business plan is like building a house without a blueprint. Yet, unlike a house, a business isn't static. We often make the mistake of thinking of a business plan as a single document that you put together once when you're starting out and never touch again. But as the business develops, so should its business plan. In fact, any particular business may have multiple business plans as its objectives change.

Writing a business plan is time-consuming, but it's essential if you want to have a successful business that's going to survive the startup phase.

Key Takeaways

Writing a business plan reveals how tenable your idea is.
Updating and amending a business plan as the business develops and its goals change is vital to your success.
A good business plan helps you define your target market, competitive advantage, optimum pricing strategies, and better prepares the business for upcoming challenges.
A business plan helps you secure funding and attract new investors.

Writing a business plan is the best way—other than going out and doing it—to test whether an idea for starting a business is feasible. In this sense, the business plan is your safety net. If working through a business plan reveals that your business idea is untenable, it will save you a great deal of time and money.

Often, an idea for starting a business is discarded at the marketing analysis or competitive analysis stage , freeing you to move on to a new (and better) idea.

Unfortunately, many prospective business owners are so convinced that their idea for a product or service is a can't-miss proposition, that they don't take the time to do the necessary research and work through a proper business plan. The more you know about your industry, your prospective customers, and the competition, the greater the likelihood that your business will succeed.

Writing a business plan will ensure that you pay attention to the broad operational and financial objectives of your new business and the small details, such as budgeting and market planning. The process will ultimately make for a smoother startup period and fewer unforeseen problems as your business gets up and running.

The exercise of budgeting and market planning will help you define your target market , your unique selling proposition, optimum pricing strategies, and outline how you intend to sell and deliver your products to customers. In addition, developing a budget for implementation will assist with determining your startup and operating capital requirements.

According to the Small Business Administration, one of the most-cited reasons why businesses fail is inadequate planning. By starting too soon and without a sufficient plan, your business is setting itself up for failure.

Most new businesses need startup and operating capital to get off the ground. Without a well-developed business plan, there is no chance of getting debt financing from established financial institutions such as banks or equity financing from angel investors.

Established businesses often need money, too, to buy new equipment or property, or because of market downturns. Having an up-to-date business plan gives you a much better chance of getting the money you need to keep operating or expand.

Even an angel investor will want to ensure their money is going to a business that knows what it's doing. The easiest way to prove this is via a well-developed business plan.

Investors and financiers are always looking at the risk of default, and word of mouth is no substitute for written facts and figures in a properly prepared business plan.

A business plan is essential if you're thinking of starting a business, but it's also an important tool for established businesses. Viable businesses are dynamic; they change and grow. Your company's original business plan needs to be revised as you set new goals .

Reviewing the business plan can also help you see what goals have been accomplished, what changes need to be made, or what new directions your company's growth should take.

Whether you want to shop your business to venture capitalists or attract angel investors , you need to have a solid business plan. A presentation may pique their interest, but they'll need a well-written document they can study before they'll be prepared to make any investment commitment.

Be prepared to have your business plan scrutinized. Both venture capitalists and angel investors will want to conduct extensive background checks and competitive analyses to be certain that what's written in your business plan is indeed the case.

What are the sections of a business plan?

A comprehensive business plan should include the following sections:

Executive summary
Company description
Competitor analysis
Industry analysis
Product and services description
Financial data

What is the purpose of a business plan?

A business plan has four main purposes:

Tests the feasibility and model of your business idea
Attracts investors
Sets a plan for growth
Identifies capital needs

Small Business Administration. " Selecting a Business That Fits ."

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A business plan is also just what the name says - it's a plan for your business, a roadmap to success. The plan proves you're not just figuring out as you go. Even so, remember that a business plan is a dynamic document that can evolve over time. 11. Learning
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14 Reasons Why You Need a Business Plan

Create a professional business plan

6. You’ll make big spending decisions with confidence

7. You’re more likely to catch critical cash flow challenges early

The Bplans Weekly

The quickest way to turn a business idea into a business plan

The importance of a business plan

What is a business plan?

Why is a business plan important?

What is the purpose of a business plan?

10 reasons why you need a business plan

1. To help you with critical decisions

2. To iron out the kinks

3. To avoid the big mistakes

4. To prove the viability of the business

5. To set better objectives and benchmarks

6. To communicate objectives and benchmarks

7. To provide a guide for service providers

8. To secure financing

9. To better understand the broader landscape

10. To reduce risk

Business plan FAQs

What industry-specific issues can business plans help tackle?

How can small business owners use their business plans to pitch investors or apply for loans?

Understanding the importance of a business plan

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11 Reasons Why You Need a Business Plan

1. Testing Viability

2. Setting Goals

3. Reducing Risk

4. Knowing Your Market

5. Allocating Funds

6. Determining Funding Needs

7. Attracting Capital

8. Attracting Partners

9. Attracting Talent

10. Having a Roadmap

11. Learning

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