how to write a small business plan template

Small Business Trends

How to create a business plan: examples & free template.

This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

Table of Contents

How to Write a Business Plan

Executive summary.

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Overview and Business Objectives

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Company Description

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Define Your Target Market

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

Competitive analysis.

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

Organization and Management Team

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Marketing and sales strategy.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Logistics and Operations Plan

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Cash Flow Statement

Tips on Writing a Business Plan

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

What is a Business Plan?

Why you should write a business plan, what are the different types of business plans.

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

Using Business Plan Software

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

Business Plan FAQs

What is a good business plan, what are the 3 main purposes of a business plan, can i write a business plan by myself.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

How long should a business plan be, what is a business plan outline, what are the 5 most common business plan mistakes, what questions should be asked in a business plan.

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

How is business planning for a nonprofit different.

How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

Download a free SBA-approved business plan template built for small businesses and startups.

Download Template

One-page plan template

Download a free one-page plan template to write a useful business plan in as little as 30-minutes.

Sample business plan library

Explore over 500 real-world business plan examples from a wide variety of industries.

View Sample Plans

How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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Start » startup, how to write a startup business plan.

As a startup, you'll need to know how to write a business plan in order to attract investors. Here are some templates and examples to help you get started.

If you're starting a new business or executing a new plan within your company, you’ll want to have a business plan. It’s a formal document that outlines your company, your project, funding options and your means of execution. There are many resources available to help you write your business plan, including countless templates you can follow depending on your goals. Below we’ve outlined some examples, including a sample plan.

[Read: How to Write a Business Plan During a Pandemic ]

Business plan template examples

While business plans can be general, it’s helpful to gear yours toward your industry. Here are five business plan templates for specific industries or situations:

• For first-time entrepreneurs: The United States Small Business Administration (SBA) .
• For getting your ideas down: $100 Startup .
• For law firms: Cilo .
• For established businesses: SCORE .
• For additional industries: LawDepot .

Sample business plan

A one-page business plan briefly states your opportunity and timeline. It’s often used as an introduction to your longer, more robust plan. Here is a brief overview of a business plan and the nine elements that should be included.

1. The business opportunity

At the top of your plan, state the endeavor you're looking to pursue. Are you a new startup or an existing company looking to grow? Describe your challenges and how you plan to work through them. This section should be a one- or two-sentence elevator pitch of your business opportunity.

[Read: How to Refine Your Business Plan for Every Stage of Your Business ]

2. Your company description

When writing your company description, assume the reader knows nothing about your company. Briefly define who you are, identifying your values and why your company is necessary right now.

Outline your timeline for launching your business or project. Timelines are always subject to change, so make sure you account for alternative scenarios and setbacks.

3. Your talent description

In this section, you’ll want to introduce your team and demonstrate why they are the right fit for your business. Talk about their relevant skills, experience and background, getting as specific as possible. Providing their track record will reassure potential investors that your business is backed by reliable professionals.

4. The industry analysis

While writing your plan, it’s important to recognize your industry's outlook and your potential within it. This will also help you identify your competitors and analyze their offerings in comparison to yours, so you can focus on how you might stand out among them. This analysis is a great way to show investors that you’ve done your research and understand how you fit into your market.

[Read: Pivoting During the Pandemic? 16 Tools That Will Help Your Business Adapt ]

5. Your target audience

In this section, you will identify your target audience, defining their demographic, location and other specific traits. Additionally, explain how your audience will benefit from your company or project, or how you will solve common problems they share.

6. The timeline

Outline your timeline for launching your business or project. Timelines are always subject to change, so make sure you account for alternative scenarios and setbacks. For your one-page business plan, talk about your general timeline, its phases and why it’s a realistic goal.

7. Your marketing plan

How will you get the word out about your new business or project? Identify the avenues you and your company will choose to explore and how you plan to meet your target audience there. For example, consider your social media efforts, digital marketing and other methods that you seek to execute.

8. The financial summary

Clearly define your cost structure and revenue streams, describing your sales methods and post-launch goals, as well as how you will achieve them. Be sure to include both your long- and short-term financial goals and benchmarks.

[Read: Smart Strategies for Presenting Your Business Plan ]

9. Your funding requirements

One of the primary reasons you write a business plan is to help obtain funding. In this section, talk about the amount of funding you'll need from investors and where that funding will go. You should also be clear about how you plan to pay back your investors through your financial plan.

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Creating a Business Plan for Your Small Business

By James Monroe —

Here’s a scary thought: if you have a small business but don’t have a business plan, you may be taking unnecessary risks and missing big opportunities.

Writing a business plan may not sound very exciting, but it can make a big difference. A business plan captures your best thinking and documents your ideas and hopes for your business. So, when you get wrapped up in the day-to-day, there’s something to guide your decisions, remind you why you got into the business in the first place, and how you can strengthen and grow it.

Think of your business plan as a roadmap to an important destination. It may be tempting to try to get there by following your nose. But you’re more likely to get there by charting your course.

Why Small Business Plans Matter

A plan is important because of the impact it can have on your business.

Companies with business plans (yes, even one-person companies) are likely to grow faster, have stronger brand recognition, and be better positioned for the future than those without. Business plans help you create the right products, develop robust marketing strategies, and anticipate problems. [1]

The most important reason to write a business plan is it can help fuel both short- and long-term success. Data from the U.S. Bureau of Labor Statistics shows that 20% of new businesses fail in their first two years, and only 25% will make it past 15 years. [2]

• A 2017  Harvard Business Review  article found, “Entrepreneurs who write formal plans are 16% more likely to achieve success than the otherwise identical entrepreneurs.” [3]
• Data from the  Journal of Management Studies  suggest businesses with plans grow 30% faster than those without. [4]
• That same study suggests business plans that spell out a business’s value proposition and customer appeal grow even more quickly.

So yes, business plans matter.

10 Easy, Low-Lift Side Hustles

• Company Description What does the company do? What makes your company different, and why does that difference matter to your target customers?
• Company Structure How is your company legally structured? Is it a sole proprietorship, an LLC, or an S Corporation? Do you have employees or plan to have them? Do you plan to have partners for development, marketing, and distribution? Learn more about company structure by reading “ The ABCs of LLCs ” or watching this  Small Business Basics video .
• Product What products or services does the company sell, and what makes them unique and attractive to potential customers? How are the company’s products priced?
• Growth Potential How big is the opportunity to make money? Who are your target customers? Who are your competitors, and how will you position your company against them?
• Marketing How will you reach and stay in touch with potential customers? Advertising? Social media? Marketing partnerships? Where will customers buy what you sell, and how can you ensure they have a good experience? Check out this page for more  small business marketing  resources.
• Financial Projections How much money do you need to start or expand your company? What are your revenue and profit projections over the next one to three years? You can learn more about funding resources for your company  here .
• Timeline for Achieving Business Goals What are your marketing, operations and financial goals over time?  For more information on how to set goals for your business, read  How To Write Goals to Help Your Small Business Succeed .

How to Write Your Business Plan

Fortunately, developing a plan for your business doesn’t have to be complicated or take a lot of time.

First, consider how you will use your plan. Is it for you and your partners? Or, will it be part of a pitch for financing from a lender or investor? Obviously, those audiences will want different levels of financial detail, so keep that in mind as you take the next steps.

Start with a template.

It’s probably a good idea to start with a template. The Small Business Administration has a couple of good ones on this  page .

If you’re comfortable with artificial intelligence tools, consider using a generative AI tool like LivePlan (link) or  IdeaMaster.io  to create a business plan template.

Or, check out this  list  of tools from the U.S. Chamber of Commerce. Some of these services offer free tiers, which may be all you need. But be cautious about divulging too much information into any online templates because the company may share your information with others.

Get hands-on help.

If you  really  can’t stand the idea of writing a business plan, other options are available. 

You may want to consider a  business mentor— someone who has been there and done that and can help you with writing a plan and business advice. You can learn more about finding a free or paid mentor  here .

Freelance business coaches  can also help. You’ll find them available at various prices on sites like  Fiverr  and  Upwork .

No matter how you go about it, remember your plan is just that: yours. It should reflect your company’s personality and the passion of its owners. If something in a template doesn’t make sense for your business, toss it out. If you want to add more detail than the template requires, go ahead.

The goal is to have a document that fits your company.

I Have a Plan, Now What?

Congratulations. The process of writing your business plan has already accomplished one of its major goals: thinking about your company in ways you normally wouldn’t.

• You’ve taken the time to think not just about your next job, but also about the things that make your company successful and set you apart.
• You’ve thought about your customers and how your products or services fit into their lives.
• You’ve reviewed your company’s financial health and your prospects for growth.

And as online business resource company  BPlans.com  points out, your business plan will help you maintain focus. Anytime you need a clearer perspective on your business, take out your plan and get a higher-level look at your company. And, when you do, ask yourself:

• Are you achieving your goals?
• Has an unexpected wrinkle thrown you off course?
• Should you explore changes, like testing a new product idea?

Your business plan is there to help you measure performance, react to the unexpected, and plan for the future.

Business Planning in Changing Times.

Business plans really prove their value when things change. The idea isn’t to  maintain  your plan, it’s to  use  your plan to help you respond to changes and make course corrections.

Your business plan identifies the relationships between the market and your business. As a result, your plan shows what the market lacks and how you fill that void. It describes what customers want and how your products serve them. It documents how you’re different from your competitors.

These are like gears that all mesh with one another. So, when one thing changes, your plan shows what you need to do to keep the machine running smoothly.

Does the arrival of a new competitor mean you should modify your product? Can you increase prices to cover your rising costs without alienating customers? Plug the new data into your business plan to help you see how it affects every aspect of your business. Then you can react as necessary.

How Should I Use My Plan?

Small businesspeople are notoriously busy, so it can often feel like you need to keep moving forward just to stay afloat. In fact, it’s possible to be so busy that you don’t even notice small changes in the market or in your customers’ behavior.

Make time to spend a few minutes reviewing your business plan every month. Also, think about your plan anytime something important changes. Even internal changes, such as landing a big new account or losing a key employee should trigger a look at the plan.

Finally, give your plan a full, detailed review once a year. A regular check will keep you thinking about what’s happening in the market. That, in turn, will save you time, money, and headaches in the future.

That wasn’t so bad, was it? Now you are ready to create a plan for your small business and to start enjoying the growth, performance, and comfort that come with it.

Looking for a checklist to help you set up your business? Check out (link to Strauss checklist article).

For more tips on starting and running your small business, visit the Index by Pinger  Small Business Resource Center .

1. Bplans.com “Why You Need a Business Plan” https://www.bplans.com/business-planning/basics/why-you-need/

2. “Top 6 reasons new businesses fail” https://www.investopedia.com/financial-edge/1010/top-6-reasons-new-businesses-fail.aspx%20

3. Harvard Business Review “Research: Writing a Business Plan Makes Your Startup More Likely to Succeed” https://hbr.org/2017/07/research-writing-a-business-plan-makes-your-startup-more-likely-to-succeed

4. Andrew Burke, Stewart Frasier, Francis Green, “The Multiple Effects of Business Planning on New Venture Performance,” Journal of Management Studies Volume 47 Issue 3, May 2010

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How to Write a Business Plan (+ Templates)

Written by Michael Keenan

@upmostmike

February 4, 2021

Regardless of whether you’re building a new eCommerce store, launching an interior design business, or even planning to groom dogs in your backyard for cash, you’ll need a business plan. 

A business plan outlines your goals and strategies and communicates your concepts to potential partners, teams, and investors. It allows everyone to see your business idea’s potential so you can launch a profitable and sustainable company. 

But a business plan isn’t just a description of your business. It includes financial projections, funding information, company organization, and helps you flesh out solutions to possible future barriers and challenges. While it may sound like an overwhelming task to create one, you can build a professional plan with a little effort. 

This guide will walk you through why you need a business plan, how to write one, and provide templates you can use to start right away. 

What is a business plan?

A business plan is a strategy document covering your plans, goals, and vision for your business. It communicates to stakeholders how you plan to market and sell your products and the people you’ll need on your team. 

Business plans are based on the research you conduct for your business idea and help bring your vision to life. A well-crafted business plan can provide the guidance you need to make smarter decisions, understand your finances, and set you up for success.

Why bother writing a business plan?

Still unsure why you should write a business plan this year? Let’s take a look at some benefits it offers. 

It provides direction

Around 45% of Americans think starting a business is easy, but those in the know would tell you a different story. Without a plan, you could be stumbling around in the dark without clear goals for your business. A business plan delivers direction, assists with strategic decision making, and is something you can refer to when faced with market changes.

“No matter what size or type of business, it’s a good idea to have a written one-to-five-year plan. Just putting clear thoughts on paper is a great strategy-building process that will help you clarify important points and identify the weak ones,” advises Phil Santoro, Co-Founder of Wilbur Labs . 

“Planning at the beginning can reduce risk and allow you to work more efficiently later. Remember that external circumstances evolve, so keep an updated written plan that organizes all your ideas and research into actionable steps.”

A business plan helps you set goals for the future—whether it’s one year, five years, or beyond—and can help you stay on track to achieve them. You can share your goals with your team to keep everyone aligned and motivated. 

It can help you get funding 

A business plan is a must-have if you’re seeking financial support from banks or investors, advice from your board of directors, or want buy-in from your team about an ambitious plan for the upcoming year. Without this document, external parties may have trouble seeing a credible opportunity in your business, and your team could doubt their ability to achieve your grand plans. 

It can help you grow

Building a business can be daunting and, as Phil says, is often “a block for a lot of people.” 

“Mapping out all the steps in a written plan with a supporting checklist can make the process of creating a business more manageable. We are extremely thorough and write out every critical task, corresponding notes, status, owner, due dates, and more.”

As your business starts to scale, you will need to constantly adapt and adjust your growth plan. The best entrepreneurs are comfortable being uncomfortable and can adapt as they go.”

How to write a business plan, step by step

A business plan is essential for any business. Here are eight simple steps to help you write yours.

Executive summary

The executive summary section offers readers an overview of your business plan. Highlight your mission statement, unique value proposition , and goals. Provide a short business description: who you are, what you offer to customers, and the direction you’re heading in the future.

Tip: Because this is a summary of your business plan, it makes sense to write this section last. That way, you can distill all your details into something impactful for your team, lenders, investors, potential business partners, etc., to read. 

Company description 

This section is a deep dive into who you are as a business. It should cover what you offer and what problems you’ll solve for your target market, along with an insight into your company background and goals for the future. 

To write this section, be sure to: 

• Start with your mission statement. Communicate who you are and the value you create. You should be able to differentiate yourself from competitors through value, environmental impact, expertise, history, or innovation. A great mission statement often takes significant time to craft, so work with a consultant or your marketing team on this. 
• Share more detail about your company. Talk about your founders and how the business started. Map out key milestones in your journey thus far, including your start date, external recognition (awards), key hires, and funding achievements. You can also include a brief overview of your products and services, but they’ll have a dedicated section later in the plan, so don’t go overboard here. 
• Highlight your strengths. This could be the team’s expertise, your ability to attract press coverage for innovative products and services, or any number of other qualities that you or your business possess in spades. 
• Conclude by highlighting some company goals . Such goals could be to grow your team, open new locations, or launch an ambitious new program in a year’s time. They help inform investors, lenders, or business partners of your direction and map out your decisions. 

Market analysis

This section should prove you understand your target market. Include any research you’ve done, such as a SWOT analysis (a compilation of your company’s strengths, weaknesses, opportunities, and threats) and your competitive advantage.  

Market analysis also includes a competitive analysis. Relay information about your competitors: What are they doing well? What are they doing poorly? How much brand awareness do they have in the market? 

“Traditional business plans often take an in-depth look at the competition; I would advise anyone drafting a business plan to study their direct and indirect competitors,” says Deborah Sweeney, CEO of MyCorporation . 

“This allows you to assess what competing businesses have to offer, their company background, if there are any barriers to entry, and why consumers will choose your services and offerings over the competition.” 

Deborah is keen on monitoring direct competitors as well as indirect competition . “Indirect competitors may not pose a challenge to your business at the present time, but this may change. Study and include information about these companies in your overall industry analysis.”

While research isn’t everyone’s cup of tea, it is an essential step for creating a strong business plan. Seek support from your team or work with a freelancer or agency to do research if you need to. 

Products, Services, and Delivery

This section communicates the products and services you provide and how you plan to deliver them. For example, if you’re starting an eCommerce business , you’d discuss whether you’ll use funds to produce your own products or buy dropshipping products from a supplier. You’ll also want to cover shipping, logistics , and supply chain information. 

The Products, Services, and Delivery sections should include:

• The products and services you offer. Feature a short description for each, and highlight how your ideal customer would benefit from using them. Compare them to competitor products and identify a compelling reason why yours are more valuable. 
• Information about pricing, order management, production, and product lifecycle. Mention how and where you plan to sell or offer your products or services—including online channels, where 70% of small businesses now sell. Highlight anything here that makes your product stand apart—-e.g., if you use a more eco-friendly production method. 
• Any intellectual property you own. This can include trademarks and copyrights. Include any that are pending or planned as well. 
• Future product development. Talk about what you have planned, whether it’s new products or improvements to your existing products or services. Reference a simple timeline here if you can—especially if you want to attract funding or investment for the development. 

Sales and marketing plan

This section should cover your plans for customer acquisition and retention, marketing, and sales management.

• Outline how you plan to attract, convert, and retain customers. Talk about the different marketing techniques or methods you’ll use (e.g., social media, content marketing, chatbots , etc.). 
• Share the tools you’ll use and how they’ll interact with each other. For example, elaborate on which CRM system you’ll employ or how you plan to use ManyChat with Shopify to increase sales.
• Outline the sales process from attraction to conversion. Your stakeholders need to see that you have a clear idea of the customer journey. 

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Funding requests .

If one of your goals is to attract investment, outline your funding goals here. Investment funding decreased 16% from 2019 to 2020, so be sure to put forth a strong request and include figures to back everything up to attract investment. 

Feature a year-by-year view of your funding goals and how you’ll spend any funds. Outline your requests, including details like equity, term length, and any conditions you’ll apply. (You could also mention the anticipated return on investment—ROI—and a sample schedule of loan repayments to satisfy potential lenders.) 

Financials 

Use this section to demonstrate your business’s profitability and its financial outlook. Include relevant balance sheets, a cash flow statement, and income statements for the previous three to five years. 

If your business is newer, include what you can. If it’s a startup, feature projections instead of historical data. Map out your planned income and expenditures, sales forecasts, balance sheets, and cash flow forecasts. This gives would-be business partners or investors insight into your potential and provides reasoning for your funding requests. 

Appendix 

Use this space to include other documents and files that are relevant but that you don’t want to feature in the main business plan. Such items can include trademark notices, patents, contracts, product documentation, credit reports, and other legal documents.

Tip: To help your readers navigate through your appendix, label each document clearly within a table of contents and include the reference alongside the relevant point in your business plan. If you’re sending the business plan digitally, include a hyperlink so readers can easily get to it.

Tips for writing a business plan

Now that you understand how to write a business plan, here are some tips and recommendations to make it amazing. 

• Rally the troops. Seek support from your team and hire experts if you need to for research, analysis, financials, or marketing plans. Know your strengths and weaknesses—don’t be afraid to pull together a great team to create a strategic plan. 
• Be mindful of length. Research by GrowThink indicates business plans should cap out around 15-25 pages. This gives you plenty of space to communicate your strategies and goals without overwhelming the reader (or yourself).
• Consider your presentation. Make sure your business plan is straightforward. Choose a simple font that’s legible even at small sizes. Divide your business plan into clear sections that utilize headings and consistent formatting so people can quickly scan and find desired information. When sharing, send your business plan as a PDF so people can easily scroll through and cannot edit the information.
• Fact-check and proofread. A lot of eyes will be on your business plan. Whether leadership, investors, or even your own team will be reading it, you want to make a good impression. Have an expert fact-check your document and hire an editor to fix common grammar mistakes and inconsistencies.

One final recommendation: Revisit your business plan often. Your business plan will change as your business evolves. Make sure to update sections so they remain relevant throughout the life of your business.

For example, if your leadership team changes, you launch a new product, or have a new request for funding, always modify your plan accordingly. It goes without saying but always review and refresh your business plan before you show it to a potential business partner or investor. Outdated information never leaves a good impression. 

Business plan templates

Here are a few business plan templates you can use to get started:

• Business plan templates for startups from Score.com
• Free business plan templates from Rocket Lawyer
• Hubspot’s interactive business plan template
• The One-Page Business Plan from 100 Startup
• 500 Free Sample Business Plans by Bplans

Kick off your new business with smart business planning

Every business owner should write a business plan, regardless of your industry or size. 

Not only can it help you solidify your goals and strategies, but it also helps test your business ideas and communicate your concepts to potential investors.

Start by reviewing some of the business plan templates above, and you’ll soon see how easy it is to create a professional plan with minimal effort. Once completed, you’ll be well on your way to launching (and sustaining!) a successful business.

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How to write a business plan

Writing a business plan will help nail down your idea and give you a blueprint for executing it.

What is a business plan?

A business plan describes your product or service, identifies who the customer is, explains why they need your product or service, and shows how you’ll make money from that opportunity.

Why write a business plan

How you write a business plan will depend on what you need it to do. There are a couple of key jobs a business plan can have. It can:

• explain a business idea
• convince lenders or investors to put money behind that business idea

It doesn’t take a book to do the first job. You can write a business plan that’s short, to the point, and easy to update. That may be all you ever need. But if you’re going for funding, your business plan will need to be a good deal longer and more comprehensive.

Why every business should start with a one-pager

Even if you will eventually write a long business plan, a one-pager is a great place to start. It could take as little as an hour to do your first draft and will make your idea stronger. Writing about customers, competitors, income and expenses will help develop your thinking.

How to write a one-page business plan

You’ll see in the example below that there are nine sections, or things to write about. So give yourself just a small space to write about each. Keeping it short will help you focus on what’s important.

Download a one-page business plan template.

When you need a longer business plan

The greater the risk you’re taking, the more comprehensive your plan should be. For instance, you’ll need to write a long-form business plan if you’re going to fund it with other people’s money. Banks and investors will expect it.

How to write a longer business plan

Long-form business plans touch on all the same things as a one-pager, but they go into more detail and contain fewer assumptions.

Back-of-the-napkin numbers are replaced by forecasts and budgets. And guesstimates for things like costs, market size, customer preferences, and competitor weaknesses need to be backed up with proof. It’s a good idea to involve an accountant or bookkeeper in developing the budgeting and finance sections.

Contents of a business plan:

• Executive summary: A short summary of the main points of your business plan. Write it last.
• Company overview: Identify your industry, what you’re selling, and how you’ll charge.
• Products or services: Include a description of the problem you’re solving for customers.
• Market analysis: Describe your target market, and examine the competition.
• Risk assessment: Flag potential hurdles (including assumptions that could be proved wrong).
• Marketing and sales plan: How will you find customers and make sales? How many sales will there be?
• Milestones: What needs to happen and when?
• Progress reporting: When and how will you report against the milestones?
• Team: Who will be involved in the business? Note their skills and responsibilities.
• Budget: Estimate your costs and income (and any debt that you plan to take on).
• Finance: Show how you’ll fund the business.

You can also add an appendix with any supporting or background documents.

Make a start by downloading our free business plan template.

How not to write a business plan

Avoid these common business planning mistakes:

• Underestimating how much money it will take to get started
• Failing to budget for the first few months of operation (before revenues start flowing)
• Expecting sales to ramp up too fast
• Relying too heavily on one or two customers (or suppliers)
• Not including contingencies for unexpected delays or costs

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

How to start a business

Thousands of new businesses open every day. If all those people can do it, why not you? Here’s what to do, and when.

Your business idea is clearly inspired. But it helps to check you’re not the only one who thinks so.

It’s time to run some numbers on your business idea. Budgeting and forecasting help with that.

Your prices can influence the number of sales you make and the profit you earn on each transaction.

Your business structure can affect how much tax you pay, and how you're treated by the law.

If you’re starting a business, then you’ll need to get familiar with some accounting basics.

After all the excitement of deciding to start a business, you’ll have some paperwork to do.

Treat your website like an online version of a storefront. It’s the first impression for many customers and prospects.

Now that you’re in business, you want to stay there. Xero’s got resources and solutions to help.

Download the guide to starting a business

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The 7 Best Business Plan Examples (2024)

As an aspiring entrepreneur gearing up to start your own business , you likely know the importance of drafting a business plan. However, you might not be entirely sure where to begin or what specific details to include. That’s where examining business plan examples can be beneficial. Sample business plans serve as real-world templates to help you craft your own plan with confidence. They also provide insight into the key sections that make up a business plan, as well as demonstrate how to structure and present your ideas effectively.

Example business plan

To understand how to write a business plan, let’s study an example structured using a seven-part template. Here’s a quick overview of those parts:

• Executive summary: A quick overview of your business and the contents of your business plan.
• Company description: More info about your company, its goals and mission, and why you started it in the first place.
• Market analysis: Research about the market and industry your business will operate in, including a competitive analysis about the companies you’ll be up against.
• Products and services: A detailed description of what you’ll be selling to your customers.
• Marketing plan: A strategic outline of how you plan to market and promote your business before, during, and after your company launches into the market.
• Logistics and operations plan: An explanation of the systems, processes, and tools that are needed to run your business in the background.
• Financial plan: A map of your short-term (and even long-term) financial goals and the costs to run the business. If you’re looking for funding, this is the place to discuss your request and needs.

7 business plan examples (section by section)

In this section, you’ll find hypothetical and real-world examples of each aspect of a business plan to show you how the whole thing comes together. 

• Executive summary

Your executive summary offers a high-level overview of the rest of your business plan. You’ll want to include a brief description of your company, market research, competitor analysis, and financial information. 

In this free business plan template, the executive summary is three paragraphs and occupies nearly half the page:

• Company description

You might go more in-depth with your company description and include the following sections:

• Nature of the business. Mention the general category of business you fall under. Are you a manufacturer, wholesaler, or retailer of your products?
• Background information. Talk about your past experiences and skills, and how you’ve combined them to fill in the market. 
• Business structure. This section outlines how you registered your company —as a corporation, sole proprietorship, LLC, or other business type.
• Industry. Which business sector do you operate in? The answer might be technology, merchandising, or another industry.
• Team. Whether you’re the sole full-time employee of your business or you have contractors to support your daily workflow, this is your chance to put them under the spotlight.

You can also repurpose your company description elsewhere, like on your About page, Instagram page, or other properties that ask for a boilerplate description of your business. Hair extensions brand Luxy Hair has a blurb on it’s About page that could easily be repurposed as a company description for its business plan. 

• Market analysis

Market analysis comprises research on product supply and demand, your target market, the competitive landscape, and industry trends. You might do a SWOT analysis to learn where you stand and identify market gaps that you could exploit to establish your footing. Here’s an example of a SWOT analysis for a hypothetical ecommerce business: 

You’ll also want to run a competitive analysis as part of the market analysis component of your business plan. This will show you who you’re up against and give you ideas on how to gain an edge over the competition. 

• Products and services

This part of your business plan describes your product or service, how it will be priced, and the ways it will compete against similar offerings in the market. Don’t go into too much detail here—a few lines are enough to introduce your item to the reader.

• Marketing plan

Potential investors will want to know how you’ll get the word out about your business. So it’s essential to build a marketing plan that highlights the promotion and customer acquisition strategies you’re planning to adopt. 

Most marketing plans focus on the four Ps: product, price, place, and promotion. However, it’s easier when you break it down by the different marketing channels . Mention how you intend to promote your business using blogs, email, social media, and word-of-mouth marketing. 

Here’s an example of a hypothetical marketing plan for a real estate website:

Logistics and operations

This section of your business plan provides information about your production, facilities, equipment, shipping and fulfillment, and inventory.

Financial plan

The financial plan (a.k.a. financial statement) offers a breakdown of your sales, revenue, expenses, profit, and other financial metrics. You’ll want to include all the numbers and concrete data to project your current and projected financial state.

In this business plan example, the financial statement for ecommerce brand Nature’s Candy includes forecasted revenue, expenses, and net profit in graphs.

It then goes deeper into the financials, citing:

• Funding needs
• Project cash-flow statement
• Project profit-and-loss statement
• Projected balance sheet

You can use Shopify’s financial plan template to create your own income statement, cash-flow statement, and balance sheet. 

Types of business plans (and what to write for each)

A one-page business plan is a pared down version of a standard business plan that’s easy for potential investors and partners to understand. You’ll want to include all of these sections, but make sure they’re abbreviated and summarized:

• Logistics and operations plan
• Financials 

A startup business plan is meant to secure outside funding for a new business. Typically, there’s a big focus on the financials, as well as other sections that help determine the viability of your business idea—market analysis, for example. Shopify has a great business plan template for startups that include all the below points:

• Market research: in depth
• Financials: in depth

Your internal business plan acts as the enforcer of your company’s vision. It reminds your team of the long-term objective and keeps them strategically aligned toward the same goal. Be sure to include:

• Market research

Feasibility 

A feasibility business plan is essentially a feasibility study that helps you evaluate whether your product or idea is worthy of a full business plan. Include the following sections:

A strategic (or growth) business plan lays out your long-term vision and goals. This means your predictions stretch further into the future, and you aim for greater growth and revenue. While crafting this document, you use all the parts of a usual business plan but add more to each one:

• Products and services: for launch and expansion
• Market analysis: detailed analysis
• Marketing plan: detailed strategy
• Logistics and operations plan: detailed plan
• Financials: detailed projections

Free business plan templates

Now that you’re familiar with what’s included and how to format a business plan, let’s go over a few templates you can fill out or draw inspiration from.

Bplans’ free business plan template

Bplans’ free business plan template focuses a lot on the financial side of running a business. It has many pages just for your financial plan and statements. Once you fill it out, you’ll see exactly where your business stands financially and what you need to do to keep it on track or make it better.

PandaDoc’s free business plan template

PandaDoc’s free business plan template is detailed and guides you through every section, so you don’t have to figure everything out on your own. Filling it out, you’ll grasp the ins and outs of your business and how each part fits together. It’s also handy because it connects to PandaDoc’s e-signature for easy signing, ideal for businesses with partners or a board.

Miro’s Business Model Canvas Template

Miro’s Business Model Canvas Template helps you map out the essentials of your business, like partnerships, core activities, and what makes you different. It’s a collaborative tool for you and your team to learn how everything in your business is linked.

Better business planning equals better business outcomes

Building a business plan is key to establishing a clear direction and strategy for your venture. With a solid plan in hand, you’ll know what steps to take for achieving each of your business goals. Kickstart your business planning and set yourself up for success with a defined roadmap—utilizing the sample business plans above to inform your approach.

Business plan FAQ

What are the 3 main points of a business plan.

• Concept. Explain what your business does and the main idea behind it. This is where you tell people what you plan to achieve with your business.
• Contents. Explain what you’re selling or offering. Point out who you’re selling to and who else is selling something similar. This part concerns your products or services, who will buy them, and who you’re up against.
• Cash flow. Explain how money will move in and out of your business. Discuss the money you need to start and keep the business going, the costs of running your business, and how much money you expect to make.

How do I write a simple business plan?

To create a simple business plan, start with an executive summary that details your business vision and objectives. Follow this with a concise description of your company’s structure, your market analysis, and information about your products or services. Conclude your plan with financial projections that outline your expected revenue, expenses, and profitability.

What is the best format to write a business plan?

The optimal format for a business plan arranges your plan in a clear and structured way, helping potential investors get a quick grasp of what your business is about and what you aim to achieve. Always start with a summary of your plan and finish with the financial details or any extra information at the end.

Want to learn more?

• Question: Are You a Business Owner or an Entrepreneur?
• Bootstrapping a Business: 10 Tips to Help You Succeed
• Entrepreneurial Mindset: 20 Ways to Think Like an Entrepreneur
• 101+ Best Small Business Software Programs 

How to Write a Business Plan for a Sole Proprietorship

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• Business Planning & Strategy
• Write a Business Plan
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How to Write a Construction Business Plan

How to write a business plan template for a cable channel, how to evaluate the feasibility of a business.

• Preparing a Three-Year Business Plan
• What Is the Role of a Business Plan in Getting Venture Capital Funding?

A business plan for a sole proprietorship is just like any other business plan. The main difference in business plans, in general, is the purpose. If you are writing a plan to organize your existing small company, focus on how your company operates and your goals for the future. If you will use it to obtain funding, your focus should be how you will make profits by supplying a commercial need.

Research Your Market

Start your research by describing your target or best customers by gender, age, income level, buying habits and residential location. Then look at your competition. Compare your company to your competition in terms of product offerings, service, prices, marketing, brand image and profitability. This gives you information for establishing the future direction you want your company to take, goals for expansion, product lines, service improvements, marketing to increase market share and ways to increase profitability. If you are a startup business, researching your market helps you develop your business idea, initiate good practices from the start and position your launch to attract the attention of your target market. It also gives you an argument that your company can fill a niche that will result in profits, which is important if you are going after funding.

Sole Proprietorship

There are special problems faced by a sole proprietorship operated by one person. The biggest problem is that you can't do everything. While examining your market, look for outside services that are geared to helping you compete with larger companies. These might be telephone answering services and business center offices that supply office space, office machines, administrative services and conference rooms. The Internet can provide inexpensive, simple-to-use marketing services and other outsourced services to expand your business reach. These are important considerations for the operations section of your business plan.

Develop Your Idea

Use your market research to solidify your vision for your company. Write a one or two sentence mission statement that addresses what you do, for whom, when, where, why and how. Then build on that. Establish in detail how the company operates, your suppliers, sales agents, cost of goods, price points, marketing strategy and growth plans. The more detailed you express this vision, the more likely you will see holes in your plan, which is one of the benefits of writing a business plan; it enables you to solve problems before you encounter them.

Research Your Costs

Make a list of every expense you encounter including rent, employees, travel, legal services, business licensing, insurance, inventory, sales costs, marketing costs and delivery costs. Business plan software is a good source of spreadsheet programs that allow you to plug in these costs to see what kind of revenues you must generate for profitability. These programs also print out a good presentation of your financial projections for use in obtaining funding.

Write the Plan

Your business plan should be shorter than 50 pages and should include the following sections: executive summary, which is written last; description of industry, including how you fit in; business model, describing your products and services; target market, describing who will buy from you and why; marketing model, describing how you will reach your target market; revenue model, estimating revenues and discussing how you will achieve those estimates; management, listing the bios and skills your managers bring to the company as well as your outside advisory board; and your financial projections, which consist of spreadsheets including a profit and loss statement, sales projections, personnel projections, cash flow and balance sheet. Include a discussion of how you arrived at these financial projections and the assumptions you used.

• SBA.gov: How to Write a Business Plan
• Entrepreneur: An Introduction to Business Plans

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.

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How to write a business plan

A business plan is an indispensable document every small business owner should invest time into developing. If you want tips on how to write a business plan, we’ve created this quick guide to give you everything you need to craft your own.

If you want to skip straight to writing your own business plan, we’ve included a free and downloadable business plan at the end of this article.

The rest of this article on writing a business plan will acquaint you with the how and why of this important small business task.

What is a business plan?

A business plan is a formal and structured document. It outlines your business intentions, financial targets, marketing plans, and more.

A small business plan will generally consist of the following sections:

• A general outline or description of your business: This will include your business details, business structure, NZBN, contact details, website etc.
• An executive summary:

An executive summary is a one-page outline of your small business intentions – essentially a ‘cover letter’ for your busines plan.

• Team and management:

A snapshot of your team structure, employees, positions, and key responsibilities. This is usually laid out in a visual ‘tree’ format.

• Products and services:

An overview of your intended deliverables. Include a description of your intended products and services that will form the backbone of your sales and cashflow. This section will also include pricing, demand, distribution, and unique selling position.

Details of your operational intentions. This section will include equipment, premises, technology, suppliers, stock, insurance, and legal considerations.

• Market analysis

A research-based analysis of your target market, demographics, market size. Plus, a breakdown of the competitive landscape and a SWOT analysis (strengths, weaknesses, opportunities, and threats).

• Marketing plan How you intend to promote your deliverables and lead consumers down a path to sales. This section will include what your website looks like and your digital marketing and social media strategies.
• Sales plan and business finances: A debrief on your sales targets, pricing, profitability, cashflow, budget, funding, and balance sheets.
• Future forecast A declaration of your intentions for growth and future profitability. This section will include a mission statement, opportunities for growth and a multi-year roadmap.

Why write a business plan?

Writing a busines plan is important for both internal and external use.

Internally, it’s a guiding document that formalises and articulates how your business will function and the goals and specifics of your intended business journey.

Externally, a small business plan is indispensable for gaining financing or investment. It’s also a central tool when consulting with accountants or business advisors who you enlist to support your pathway to financial success.

By scripting a business plan, you can outline your business processes, keep track of financial goals, formalise your sales and marketing plans and provide a skeleton for you to refer to when building and growing your business in earnest.

To not write a busines plan means you run the risk of early failure through a lack of preparation and structure. You may be missing key elements for success or overlooking weak points in your business proposal.

Starting a business

Starting a business from scratch is no easy feat. The most recognised and intelligent way to go about this is to first create your business plan so you can assess the reality of bringing your offerings to market and understanding where your blind spots are.

Creating a business plan should be one of (if not the ) first step you take before investing yourself in your venture. Let’s undertake a quick run through these first steps in starting your business and the key elements of a business plan.

Market research

First up, you need to spend time researching the market.

You’ll have to pinpoint and describe your target customer, how many there are, and analyse your competitors.

By doing so you’ll not only be able to direct your sales and marketing efforts effectively, but you’ll also understand what you need to offer to beat your competition.

If you discover that there’s not a lot of money flowing through your intended market coupled with high levels of competition, you may wish to change course to avoid a steep uphill battle or target a different corner of the market.

Marketing plan

You will build your marketing plan from the results of your market and target customer research. If you performed this diligently, a streamlined marketing plan will be much more easily formulated.

Without a go-to-market plan, your marketing activity will be reflexive and unstructured, leading to missed opportunity and wasted resources.

You need to have a thorough understanding of digital marketing, branding, websites, advertising, promotional activity, unique selling proposition, reporting, software, and associated budget.

Business finances

There’s not much chance of busines success without incorporating your financing intentions into your business plan.

How you intend to fund your business and the amounts of capital required are intrinsic considerations which you’ll need to flesh out professionally before courting financing options.

If you’re approaching a bank, financial institution, or investors, you’ll need a business plan that includes:

• your business budgets
• equipment, stock and set up costs
• a cashflow forecast
• profitability chances and your ability to service debt
• any assets, capital, or collateral you may have.

You must present these aspects alongside the other elements of your business plan, such as market analysis, sales and marketing plans, and risk assessment to gain financing for your fledgling small business.

Tailor your business plan to your audience

Before we get to the business plan template, you should understand your intended audience.

Do you intend to present this version for financing options? Is it for a business advisor? Is it for internal use such as employees or managers?

Different stakeholders will value certain aspects of your business plan over others, so be sure to have multiple versions tailored for different purposes.

Download your free business plan template today!

Please download our free business plan template and start filling in the blanks to skip through the hard work of creating a structured busines plan from scratch.

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

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5 Benefits Of Using A Business Plan Templates to Launch Your Dream in 2024

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Unlock the Five Benefits of Using a Business Plan Template to Write Your Small Business Plan in 2024

Kristal Sepulveda, CPA

April 23, 2024

Did you know that the key to entrepreneurial success is using your business plan as a roadmap? According to a study by SCORE , a nonprofit resource partner for small businesses, 39% of entrepreneurs cite writing a business plan as their biggest hurdle.

But what if there is a template to streamline the process for a written business plan? Look no further! This article reveals a brand-new business plan template to simplify the process and empower your entrepreneurial vision.

What is a Business Plan, and Why is it Important?

Definition and purpose of a business plan.

A business plan serves as a blueprint for your business startup. This will detail how you'll launch and grow your business. It outlines your objectives, target market, financial projections, and marketing strategies. Without a well-thought-out plan, your business won’t have a clear direction, making it challenging to succeed.

Key Components of a Business Plan

• Executive Summary: A concise overview of your business concept and goals.
• Business Description: Details about your company, its mission, vision, and values.
• Market Analysis: Research on your target market, competitors, and industry trends.
• Marketing and Sales Strategy: How you'll promote and sell your product or service.
• Operational Plan: Your business's day-to-day operations, including logistics and management structure.
• Financial Plan : Projections for revenue, expenses, and funding requirements.
• Appendix: Additional documents supporting the rest of your plan, like resumes, permits, or legal documents.

Further Reading: Maximizing Your Small Business Tax Benefits: 2023 Tax Year Strategies & New Reporting Changes

Five benefits of utilizing business plan templates for your new business, 1. time-saving structure.

Utilizing a free business plan template offers new business owners a time-saving structure. With a simple business plan template, everything you need to create a thorough business plan quickly and efficiently is at your fingertips.

Instead of starting from scratch, you can download a free template and learn how to write a professional business plan easily. This streamlined process allows you to focus on other aspects of starting your business, such as developing a marketing plan or securing a business loan.

2. Accessibility and Affordability

Access to a free, simple business plan template ensures that everyone can start their business journey on the right foot, regardless of financial resources. You can easily download a free business plan template to get started.

Eliminate the need for expensive consultants or software. This accessibility empowers aspiring business owners to take the first step toward their entrepreneurial dreams without breaking the bank.

3. Clear Communication

A well-designed business plan template includes sections like an executive summary and sales plan, facilitating clear communication with stakeholders such as business partners or potential investors. Using a template, you can effectively convey your vision, product or service offerings, and marketing strategies concisely and structured.

This clear communication not only helps garner support from investors but also ensures alignment among team members, laying a solid foundation for a successful business venture.

4. Tailored Flexibility

While templates provide a structured framework, they also offer tailored flexibility to accommodate different types of businesses and industries. Are you launching a tech startup or opening a small cafe ? A free business plan template can be customized to suit your specific needs and goals.

You can adapt sections such as the marketing plan or financial statements to reflect your business model's unique requirements. This flexibility allows you to create a professional business plan that resonates with your target audience and sets you apart from competitors.

5. Enhanced Planning Accuracy

Following a predefined structure allows you to consider all aspects of your business, from market research to financial projections. This thorough approach helps identify potential pitfalls and opportunities, enabling you to make informed decisions and mitigate risks effectively.

How to Choose the Right Business Plan Template for Your Venture?

Considerations when selecting a good business plan format.

Consider your venture's unique requirements and objectives when choosing a business plan template. Evaluate whether you're starting a new business or looking to grow your existing one. Assess the products and services you offer and the market you operate in.

Consider whether the template aligns with the guidelines provided by the Small Business Administration (SBA) and offers flexibility to customize according to your needs. Your business plan is not just a document. It's a strategic tool that can help propel your business forward.

Features to Look for in a Business Plan Template

Ensure it covers all the necessary sections of a comprehensive business plan, including information about your business, market analysis, marketing and sales strategies, operational plan, and financial projections. Consider whether the template provides guidance and examples for each section.

Look for templates offering flexibility and customization options, allowing you to tailor the plan to your business model and goals. Also, choose a template that is easy to use and understand, facilitating the writing process and ensuring clarity and coherence in your plan.

Writing a Solid Business Plan Template for Your Specific Needs

Gather all the relevant information about your business to write a solid business plan template for your specific needs. Clearly define your products or services, target market, and unique selling propositions. Use the template as a guide to creating a comprehensive and well-structured plan.

Utilize the resources and guidance the template provides to effectively articulate each part of your business plan. Ensure it reflects your vision, goals, and strategies. As you operate your business, regularly review and update your plan to adapt to changing market conditions and opportunities.

Steps to Write an Effective Business Plan Using a Template

Setting clear objectives and goals.

Begin by defining clear objectives and goals for your business. Identify the purpose of your business plan and the outcomes you aim to achieve. Outline your aspirations and milestones, whether you're starting a new business or growing an existing one.

Utilize the goal-setting section of your business plan template to help articulate your vision. For small business owners, setting achievable objectives drives growth and ensures long-term viability.

Developing a Comprehensive Business Description

Craft a comprehensive business description outlining the business type you're operating or planning to start. Provide detailed information about your products or services, target market, and how your business solves a specific need or problem.

Here's a step-by-step guide to building a strong and informative business description:

1. Company Overview:

• Business Name and Location: Start with your company's official name and physical location (if applicable).
• Year Established: Briefly mention the year your business was founded.
• Mission Statement: A concise statement outlining your company's purpose and core values.

2. Products and Services:

• Provide a clear description of the products and services you offer.
• Categorize your offerings for better readability.
• Briefly mention your brand partnerships (if applicable).

3. Target Market:

• Define your ideal customer base.
• Consider the demographics, interests, and needs of different customer segments.

4. Competitive Advantage:

• What sets your business apart from competitors?
• Highlight unique selling propositions (USPs) such as exceptional customer service, specialized products, or innovative services.

5. Management Team:

• Briefly introduce key members of your management team.
• Include their titles, expertise, and relevant experience.

6. Financial Performance:

• You can highlight financial strengths like consistent growth or profitability for established businesses.
• Emphasize responsible financial management if relevant.

7. Future Goals:

• Briefly outline your company's aspirations and long-term vision.
• Mention potential expansion plans or future product development.

8. Call to Action:

• Depending on your audience, you can include a call to action (CTA) at the end.
• This could be a website visit, contacting you for inquiries, or following your social media pages.

Constructing a Solid Financial Plan

Develop a solid financial plan that includes detailed projections and forecasts for revenue, expenses, and profitability. Utilize the financial plan section of your business plan template to outline your financial goals and strategies. It doesn't matter if you're creating a traditional or lean startup business plan.

Here are steps involved:

1. Define Your Financial Goals:

• Short-Term (1-3 years): Examples include saving for a vacation, emergency fund, or down payment on a car.
• Mid-Term (3-10 years): Examples include saving for a house, education, or starting a business.
• Long-Term (10+ years): The primary focus here is retirement planning.

2. Track Your Income and Expenses:

• Gather all your income sources (salary, investments, etc.).
• Collect bank statements and receipts to track your spending for a set period (3-6 months).
• Categorize your expenses (housing, food, transportation, etc.).

3. Create a Budget:

• Use your income and expense data to create a realistic budget.
• Several budgeting methods exist (50/30/20 rule, zero-based budgeting). Choose one that suits your needs.
• Allocate funds for expenses, savings, and debt repayment within your budget.

4. Analyze Your Debt Situation:

• List all your debts (credit cards, student loans, mortgages) with their interest rates and minimum payments.
• Prioritize high-interest debts for faster repayment. Consider debt consolidation strategies if applicable.

5. Build an Emergency Fund:

• Aim to save 3-6 months of living expenses to cover unexpected costs.

6. Plan for Retirement:

• Research retirement savings options (401(k), IRAs) and contribution limits.
• Estimate your future retirement needs and adjust your savings plan accordingly.

7. Invest for Your Goals:

• Research investment options (stocks, bonds, mutual funds) based on your risk tolerance and time horizon.
• Consider seeking professional investment advice for complex financial situations.

8. Protect Your Assets:

• Look into insurance coverage (health, life, disability) to safeguard yourself and your loved ones from financial hardship.

9. Review and Revise Regularly:

• Your financial plan is not static. Revisit and adjust your goals, budget, and investment strategies as your life circumstances evolve.

Making Your Business Plan Stand Out

Highlight key differentiators and unique selling propositions to make your business plan stand out. Showcase the viability of your business idea and its potential for success in your chosen market. Use your business plan's marketing and sales section to outline strategies for promoting your products or services and reaching your target audience.

Are you operating as a limited liability company or building your business from the ground up? A standout business plan can attract investors, partners, and customers, setting the stage for a successful venture.

Review and Refinement

Review your business plan carefully to ensure accuracy, clarity, and coherence. Seek feedback from mentors, advisors, or industry experts to identify areas for improvement. Refine your business plan based on feedback and market research to enhance its effectiveness and relevance.

Are you writing a one-page business plan or a detailed business plan outline? Ongoing review and refinement are essential for staying aligned with your goals and adapting to changing market conditions.

Further Reading: How To Leverage Tax Season For Better Client Engagements

You'll need to create a business plan to launch your venture successfully. Business plans can help guide your efforts, ensuring you're well-prepared to bring your product or service to market. Utilizing a free business plan template includes essential sections like market research and financial projections, making the process more accessible.

With a business plan template download, you can write a business plan quickly and efficiently, leveraging its structured format to streamline your efforts. Business plans help crystallize your vision and strategy.

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A Guide to Writing a Business Plan for Your Small Business

by Mariel Loveland

Published on 6 Feb 2020

In today's startup hustle, a business plan can seem like a stuffy, overly done relic of the past. Sure, plenty of businesses find success with no distinct plan, but why would you ever want to chance it? A business plan is quite often the difference between hoping you'll succeed and knowing you'll succeed.

A great business plan does a lot more than keep your company on track as it grows. It's one of the main ways you can convince venture capitalists to back your vision or to acquire a bank loan for a new business that doesn't have any actual track record of success.

Writing a business plan can be overwhelming, especially because a traditional business plan requires a lot of information and planning, but most follow the same step-by-step guide.

Pick the Type of Business Plan

There’s no one-size-fits-all formula for a business plan. It can include as much or as little information as you want, but most businesses choose one of two types:

• A traditional business plan: These are more common and encourage much greater detail including information like financial projections, target markets and marketing strategy. These run much longer than a lean-startup business plan.
• A lean-startup business plan: These still have a standard structure but only summarize the most important parts of your business model, business strategy and schedule. They’re usually only about a page long and can take just an hour to make, but some potential investors may still ask for more information if this is all you have.

A business plan is meant to make sure your company stays on track and succeeds in its goals, but the type of business plan should reflect its purpose. For example, a lean-startup business plan might help a new business launch a new product, but a traditional business plan works better when you’re trying to attract venture capitalists or get a business loan. Remember that business plans are only a guide and can change as a company grows.

Anatomy of a Traditional Business Plan

Business plans traditionally have a standard format that’s separated into a series of sections with a table of contents at the start. The sections in a typical business plan template include:

• Executive summary
• Company description
• Service or product line
• Market analysis
• Organization and management
• Marketing and sales strategy
• Funding request
• Financial analysis

These sections are meant to serve as a guide to your business’s operations, explain your company’s vision and purpose and give an overview of finances and projections that will help lenders and potential investors decide whether or not they should give you funding. A good business plan will attract partners, investors, lenders, high-quality employees and, if you’re looking for it, possible joint ventures.

Executive Summary

The executive summary should be brief. It’s the section of your business plan where you get to tell your reader what your company is, why it’s going to succeed and who is leading you to success. The most important part is your mission statement , which should reflect what your company does, why you do it and what you hope to achieve in just a few short sentences.

In your executive summary, you’ll also want to touch on other important parts of your business plan that will be detailed in subsequent sections. This includes brief summaries and descriptions of:

• Key or founding members
• Products and services
• A justification of your viability (why is your company going to make it over every other similar company?)
• Growth plans
• Financial information (if you are using the plan to find funding)

An executive summary is the most important section of your business plan because it will sway potential investors to either read further or write off your business completely. You need to be able to prove that you’re solving a consumer problem within one or two pages.

Company Description

This is where you should provide detailed information about your company and delve further into the specific problems your company solves , as the most successful businesses solve a problem within their market.

Outline your company’s target market (consumers, businesses or organizations you hope to serve) and explore your competitive advantage. What makes your business better than your competitors? For example, are you reaching an underserved market, or do you have a more qualified team?

Service or Product Line

In this section, dive deeper into the services you offer and what the life cycle of your product looks like. Do you plan to launch new products and services yearly or quarterly?

Explain what you plan to do with your intellectual property. Will you file for a patent, or do you already have one? You’ll also want to explain your research and development plans and manufacturing plans in detail.

You can get creative in this section and add photos and diagrams. You’ll want to include various things like supplier details , inventory , costs , lead times and projected net revenue . If you need a spark of inspiration, ask yourself: What products or services are we making and how?

Market Analysis

One of the top reasons startup businesses fail is because there isn’t a market need, which is why the market analysis is a key proponent of even a lean-startup plan. You want to prove that you have a key understanding of the market, but this step requires some pretty serious market research and competitive analysis . Your market analysis section should answer the following questions:

• How big is the target market?
• Is the market stable, growing or declining?
• What segment are you targeting, and what are the demographics and behaviors?
• Is there a demand?
• How is your business similar and different from the competition?
• How much is your product, and where does that fit within the market?

A good market analysis delves deep into the specific sector of the specific market you’re targeting. Start with an estimate of total households. For example, if you’re running a local pool-maintenance service, it’s helpful to know how many pools there are in the surrounding area. Include additional information like median income, income by demographics (do you target busy, middle-class moms and young, upper-class urban professionals?) and why these specific consumers will be willing to purchase your products or services.

Organization and Management

This is where readers will learn about how your company is structured and operates, including the business partners and team members who are running crucial parts of the business. Create an organizational chart to show who’s in charge of what and outline each team member’s unique experience as it relates to your company’s initiatives. You may even want to include resumes from particularly important team members.

In this section, you can also give an overview of staffing, facility and equipment needs and how your operations will change as your company grows. You should also outline your company’s legal structure and any specific company policies and procedures. Are you a C corporation or an S corporation? Are you an LLC or a sole proprietor?

Marketing and Sales Strategy

No two marketing plans are the same, and they generally evolve as your company evolves. Some companies focus the majority of their marketing budgets on social media, and others rely on email lists, print advertisements or even foot traffic. To create a solid marketing strategy, you should:

• Evaluate your target market: How do they make decisions, and where are they looking? What is the best way to reach them? For example, you may have a better time reaching teens through YouTube influencer partnerships than you will by posting a print ad in the local newspaper.
• Evaluate your competition: It’s a safe bet that your competition already knows how to reach your market. If they didn’t, they wouldn’t be competition. Look at their marketing strategy — what works and what doesn’t? — to figure out how to make yours the most effective.
• Think about your brand image: You’ll only want to market in a way that supports your brand image. For example, a company that makes jewelry from recycled plastic may not want to market alongside fast-fashion brands that are known for creating consumer waste.
• Identify your benefits: You need to remain customer focused, so slant your marketing plan toward what customers are getting instead of what you’re providing. For example, Postmates consumers are getting the ease of delivery from companies that don’t typically deliver. It’s not necessarily about the product.
• Be different: Focus on what makes your brand unique vs. your competitors.

After you’ve created and outlined your marketing strategy, you’re going to have to dive a little deeper in this section. This section should also include a pricing strategy . Will you be a low-cost or high-end option? Are there loyalty programs? For example, some businesses may have a discount price for members but charge full price for nonmembers.

This is also the place to outline any specific sales strategy you might have as it relates to your employees. This is especially important for businesses that have a sales team who works on commission.

Funding Request

This section is for potential investors or lenders. If your business isn’t looking for funding, you don’t need this section, but if you are, outline how much funding you’ll need throughout the next five years and how you’re going to use that funding. Make it as detailed as possible. Are you using funding to pay salaries and buy new equipment, or are you using it to pay debt and bills before you can turn a profit?

This section also needs to explore how the funding is going to be structured. Will it be debt or equity? What are the exact terms for which you're looking, be it length of time or interest percentage?

Financial Analysis

The financial analysis is the bread and butter of your business plan. This is what can make investors see that your business is actually viable rather than a business that’s likely to bleed money. You need to include detailed information about your finances. Most business plans include five basic financial reports:

• Balance sheets: Shows the financial health of the company by looking at assets, liabilities, shareholders and earnings kept to fund the future of the company
• Income statement: Also known as a profit-or-loss statement
• Cash-flow statement: A projection of your cash receipts and expenses, detailing how cash will come into your business and leave your business
• Operating budget: A detailed step-by-step guide to your company’s income and expenses
• Break-even analysis: A financial projection that shows when and under what conditions your company will become profitable

At the end of the day, a new business is only making projections in its business plan. That doesn’t mean they’re going to come true, but this section should answer whether or not your company is likely to become profitable based on the best information you have.

The final section of your business plan should include supporting documents like charts, credit histories, resumes, reference letters, patents, permits, contracts and legal documents. Put all supporting documentation in this section.

Bookkeeping Business Plan Template

Written by Dave Lavinsky

Bookkeeping Business Plan

Over the past 20+ years, we have helped over 9,000 entrepreneurs create business plans to start and grow their bookkeeping companies. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a bookkeeping business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Bookkeeping Business Plan?

A business plan provides a snapshot of your business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Bookkeeping Business

If you’re looking to start your own bookkeeping business or grow an established business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bookkeeping business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Bookkeeping Startups

With regards to funding, the main sources of funding for a bookkeeping business are personal savings, credit cards, bank loans, and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a bookkeeping company is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding or, like a bank, they will give you a loan.

Finish Your Business Plan Today!

How to write a business plan for a bookkeeping company.

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of business you are operating and the status; for example, are you a startup, do you have a bookkeeping business that you would like to grow, or are you operating a chain of bookkeeping companies.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the bookkeeping business industry. Discuss the type of business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing strategy. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of bookkeeping business you are operating.

For example, you might operate one of the following types:

• Traditional Bookkeeping and Accounting Business : the traditional bookkeeping and accounting business can provide the entire range of bookkeeping services, including maintaining journals and ledgers, balancing and reconciling accounts, preparing payroll, preparing and filing taxes, and providing billing and collection services.
• Tax Preparation Services : this type of bookkeeping business primarily prepares, reviews, and/or files tax returns and supplementary documents.
• Payroll Services : this type of bookkeeping business typically collects payroll information, processes paychecks, processes withholdings, and files reports.
• Billing Services : this type of bookkeeping business deals with sending bills and collecting payments.

In addition to explaining the type of business you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the bookkeeping business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the bookkeeping industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, it would be helpful to ensure your plan takes into account the seasonal nature of certain services such as tax preparation.

The following questions should be answered in the industry analysis section:

• How big is the bookkeeping industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your bookkeeping business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments : families, entrepreneurs, businesses, retirees, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of bookkeeping business you operate. Clearly, families would want different pricing and product options and would respond to different marketing promotions than established businesses.

Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the customers you seek to serve. Because most bookkeeping companies primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your business clients.

Finish Your Bookkeeping Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other bookkeeping services and companies.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes accountants, companies’ internal accounting departments, professional employer organizations, and entrepreneurs/individuals doing their own bookkeeping. You need to mention such competition to show you understand that not everyone engages in bookkeeping services.

With regards to direct competition, you want to detail the other bookkeeping companies with which you compete. Most likely, your direct competitors will be bookkeeping companies located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What services do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior bookkeeping services?
• Will you provide bookkeeping services that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your services?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bookkeeping business plan, you should include the following:

Product : in the product section, you should reiterate the type of business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to account reconciliation, will you offer services such as tax preparation?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections, you are presenting the services you offer and their prices.

Place : Place refers to the location of your business. Document your location and mention how the location will impact your success. Discuss how your location might provide a steady stream of customers. 

Promotions : the final part is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Email marketing to prospective clients
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites 
• Social media advertising
• Pay per click advertising
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your bookkeeping business such as serving customers, procuring supplies, keeping the office clean, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

Management Team

To demonstrate your bookkeeping business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally, you and/or your team members have direct experience in the bookkeeping or accounting business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in bookkeeping businesses and/or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 10 customers per week or 20? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your bookkeeping business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement Your cash flow statement will help determine how much money you need to start or grow your business and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bookkeeping or accounting business:

• Location build-out including design fees, construction, etc.
• Cost of equipment like computers and software
• Cost of maintaining an adequate amount of office supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office design blueprint or location lease.

Bookkeeping Business Plan Summary

Putting together a business plan for your bookkeeping business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert bookkeeping business plan; download it to PDF to show banks and investors. You will really understand the bookkeeping business, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful bookkeeping business.

Bookkeeping Business Plan FAQs

What is the easiest way to complete my bookkeeping business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Bookkeeping Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of bookkeeping business you are operating and the status; for example, are you a startup, do you have a bookkeeping business that you would like to grow, or are you operating a chain of bookkeeping businesses.

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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business plan consultant can create your business plan for you.

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Business plans can help you build and grow your company. Discover how to write one and download our free business plan template.

When you’re starting a business or planning to expand, having a business plan can help to get you on track and get some detail behind your ideas.

However, many businesses don’t have a business plan. So what are the advantages of business planning and how could it help your business to succeed? Read this article to find out.

Here’s what we cover:

What is a business plan?

Benefits of writing a business plan, reasons people skip business planning, the best format for your business plan, what to include in your business plan, how to use your business plan, where to get help with your business plan, business plan faqs.

A business plan is an important written document that describes your company and covers an overview of what it’s future will look like.

It covers the purpose of your business and its mission, market research, financial projections, details on your products and/or services, and how you’ll take your business to market.

It’s used to highlight the strategy of the business and the goals required to get you to where you want to be in one, three or five years (or whatever duration you’d like to focus on).

A business plan is vital if you want to secure funding, for example.

But even if that’s not on the radar (yet), having a plan in place will help you as you look to grow your business.

Once your business plan has been created, make sure you don’t just leave it in a drawer or a folder on your computer. Keep referring to it and refreshing it as you achieve your goals and create new ones.

Jennifer O’Toole, senior partner at accountancy firm Thomas R Dixon , says: “ A business plan is like a flight path .

“It lets you know where you want to go, what you want to achieve, what you have in order to achieve your goals and, probably most importantly, what problems you can expect along the way.”

“Being able to identify potential threats, problem areas that could affect the business, and to be able to develop coping strategies in a proactive manner rather than in a reactive stance, is key to business survival.”

It’s also a great way to share information about your business, to develop your thinking and test scenarios before you make any changes (such as leaving your job and going it alone), and it gives you a way to measure how things go when you do start up.

And if you’re looking for finance, then a business plan can make a difference.

Rebecca McNeil, CEO at Close Brothers Motor Finance , says: “A strong plan can help applications for finance from a business loan to alternative forms of finance and investment.”

If it’s so helpful, why don’t more people choose to have a business plan? Here are some of the common challenges:

• Time: If you’ve thought through your business, it shouldn’t take long to create your business plan. Keep it short and simple and choose a format that works for you.
• Uncertainty: It’s true that you can’t know what will happen until you start a business but a plan can help you spot potential pitfalls and helps you to understand the finances behind your idea.
• Lack of agility: Some people think business planning stops businesses evolving. But a good business plan should be current and adapt as you test and learn. It needs to be part of the business, not left in a drawer.

Many people assume a business plan will be a hefty document containing lots of facts and figures, but it doesn’t have to be. The key thing is to choose a format that will work for you and your business. That would be:

• One you’ll use:  Something that can become part of your day-to-day business rather than something you’ll never refer to. Have your business plan on the wall as a manifesto or mind map , make a presentation or create a visual guide – whatever works for you.
• One that makes it simple to express your views:  If you’re a writer, you may be happy with a document; a designer might like a more visual medium. Your business plan should excite and inspire, so pick a format that lets you do that.
• One that’s shareable:  A business plan will be seen by lots of people, from your bank manager and accountant to prospective investors or employees, so pick a format that makes it easy to share.

“A strong plan can help applications for finance from a business loan to alternative forms of finance and investment” – Rebecca McNeil, CEO at Close Brothers Motor Finance

What should a business plan include? Every plan is likely to be different but there are some common pieces of information that are often included:

• An overview of the business:  What does it do and what makes it different?
• Goals:  What does the business want to achieve? This should set some SMART (specific, measurable, achievable, relevant, timely) objectives that will quickly show if the business is succeeding.
• Your audience and the market:  Who will your business supply and how will it reach them? How big is the market and who are your key competitors?
• Products and pricing:  What will you be selling and how will your prices be set? How does this compare with your competitors?
• Who is involved?  Many investors say they invest as much in the people as they do in the business. Share some information about people’s roles, experience and passions.
• Financials:  Provide details about sales, costs, break-even points and where investment will come from. If you’re looking for people to invest, you should include information about likely returns. If you’re looking for alternative ways to finance your business, crowdfunding is a good place to start.

Some business plans will include other sections, like a SWOT (strengths, weaknesses, opportunities, threats) analysis or a full marketing plan.

You might find these useful for your business, so feel free to include them too if you wish.

Many business owners invest time in producing a business plan and then never look at it again.

While it’s valuable to get your ideas clarified and to test your thinking before you launch your business, it’s even better if your plan is embedded into your day-to-day business too.

As Jennifer says: “Business planning is a continuous process – from the initial start up of any business to stage two of developing and growth of existing sales and creating new income streams.

“As established businesses mature and diversify, business planning continues to play a fundamental role in ensuring that the company’s long-term strategies are being met.”

Here are some ways your business plan can work for you:

• Take the sales, cash flow and expense predictions, and measure them against your actual figures. This helps you spot whether you’re on track and if things need to be revised.
• Revisit your goals every month to how you’re progressing.
• Keep updating your business plan to include customer input and quotes. Real feedback is essential for keeping a business on track.
• Revisit your plan once a year to see if changes to the market, technology or competition have had an impact. Businesses need to continue to evolve to survive in the longer term.

Sometimes you’ll need additional information to pull together your plan. You could:

• Speak to your accountant. They don’t just help you with the financials, they can also offer advice about planning your business.
• Talk to your bank . Many have small business experts who can help.
• Use business planning templates. A simple template will help to make the process easier.

How do I write a business plan?­

Once you’ve settled on a business idea, it’s time to get some notes down and get organised.

If you need a little guidance, just download our small business toolkit. It comes with a template to help you get started.

Each section is full of handy tips to help you through the process.

What questions should my business plan cover?

No matter what layout you choose for your business plan, it should answer these seven core questions:

• What need does your product/service address?
• Who are your customers?
• Who are your competitors?
• What makes you different?
• How much money do you need to get started?
• How will you promote your business?
• How will you measure success?

What is the best business plan template?­

The best business plan is one that works for you.

It doesn’t need to be a lengthy document bursting with facts and figures. The template in our small business toolkit outlines everything you’ll need to include, but you could even trim things down to a couple of pages if that’s feels more natural for your business.

Make sure it’s a plan you’ll use, that makes it easy to express your ideas, and that is easy to share.

Editor’s note: This article was first published in January 2019 and has been updated for relevance.

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What Is a Marketing Plan and How To Write One (+ Template)

Learn the key elements of a marketing plan, access templates to get started, and get tips on how to write an effective plan.

No matter how much you stick to a plan, things go wrong. As the famous quote by US President Dwight D. Eisenhower goes: “Plans are useless, but planning is indispensable.”

When it comes to ecommerce, consumer trends shift, circumstances change, and initial experiments don’t always go as planned. All of these things impact your marketing plan. 

Research shows that marketers who proactively write a marketing plan are 356% more likely to report success. So, what does a realistic ecommerce marketing plan look like? And how do you handle unexpected obstacles and overestimations that threaten your company’s marketing strategy? This guide shares the answers.

What is a marketing plan?

A marketing plan is the strategy a business uses to get its products or services in front of its target customer. It includes who the target market is, the channels used to reach them, and the messaging that will help the business sell its products. 

The purpose of a marketing plan isn’t to create a step-by-step, never-fail manual. Rather, it’s a roadmap to help you accomplish the best-case scenario, while also maintaining realistic expectations for your marketing initiatives and establishing backup plans if something doesn’t work.

Marketing plan vs. business plan

A business plan paints a bigger picture of how you plan to run your business. It includes a mission statement, products you’ll launch, and market research. A marketing plan, on the other hand, is a specific document that details how you plan to achieve these wider goals through marketing . 

Marketing plan vs marketing strategy

An overarching marketing strategy details how marketing will drive business results. A marketing plan is the route you’ll use to get there. It’s more specific than a strategy and includes a practical roadmap on how you’ll put your marketing activities into play. 

Free marketing plan template to help you get started

Creating your own marketing plan is no small job. You put hours into customer and competitor research to find the channels likely to have the biggest impact on your marketing goals. You can check out marketing plan examples , but when it comes to creating your own, you can save time with a template.

Ditch the intimidating blank screen by building a marketing plan using Shopify’s free marketing plan template. Use it to guide your marketing strategy, tweaking the template to meet your business needs.

Download the template now

Types of marketing plans

Digital marketing plan.

A digital marketing plan is a specific type of marketing plan that revolves solely around online channels like social media, email, and search engines. It doesn’t include offline channels like billboards or radio ads.

Social media marketing plan

A social media marketing plan focuses specifically on how a business will use social media to reach its target market. It gives you a framework of which channels you’ll use, the types of content you’ll create, whether you’ll invest in social media ads, and how you’ll drive product sales. This can take place either through your online store or a social media storefront such as Facebook and Instagram Shops .

Content marketing plan 

A content marketing plan details how you’ll produce content that turns people into paying customers. This can span multiple formats, including an email newsletter, infographics, product documentation, and user-generated content (such as social media posts). 

Alongside the more traditional elements of a marketing plan, a content-marketing-specific strategy would include:

• Keywords you plan to target
• Who you’ll use to create the content (e.g., freelancers or in-house marketers)
• How you’ll promote and repurpose your content

Offline marketing plan

An offline marketing plan details how a business will reach its target market without using digital channels. This might include billboards, radio ads, direct mail, event sponsorships, and outdoor advertising. 

How to write a marketing plan

Detail your unique value proposition, outline your buyer personas, run a swot analysis, detail product features and benefits, set key performance indicators, outline your marketing funnel.

• Define your marketing channels

Decide on your content formats

• Plan your marketing resources

Create a measurement and optimization plan

A unique value proposition underlines your entire marketing plan. Regardless of the channels and formats you plan to use, consistency is key. Mixed messages on what you sell and what your brand stands for will only confuse potential customers.

A simple way to refine your messaging is to focus on your unique selling point. Costco, for example, is cheaper than its competitors. Harper Wilde’s products are comfier than any other bra retailer. Find the marketing channels each retailer uses and you’ll see messaging centered around its adjective.

Consult your customers if you’re unsure what your value proposition adjective should be. Research is the biggest part of any copywriting process . Survey people who’ve already bought from you, run an Instagram poll to discover why people follow your brand, and see where your competitors’ weaknesses lie. Look for adjectives that crop up frequently during the process.

What overarching goal are you trying to accomplish with the business? Why does it exist? Summarize it in one sentence, and you’ll have a mission statement to inform everything you do, which includes your marketing strategies .

Going overboard with assumptions is a common mistake among marketers. The end result is a marketing plan that doesn’t actually result in revenue.

While data won’t give you a foolproof plan, every assumption is one more bit of uncertainty you’re folding into your marketing goals . If an amazing plan has a 40% chance of holding up to real-world scenarios, one without much rigor—and lots of assumptions—might hold up 10% of the time.

Consult your customer segments and buyer personas to get as much information as you can about the person buying your products, such as: 

• Demographic data (location, age, and income level) 
• Interests, goals, and challenges 
• Channels they use to discover new products

Be careful not to confuse this with your target audience . Children would be the target audience of a toy brand; parents are the buyer persona. The latter is who you’ll be reaching out to with your marketing plan. 

A SWOT analysis helps uncover your strengths, weaknesses, opportunities, and threats relative to your competitors. It’s useful to include one as part of your marketing plan because it can help anticipate problems you might encounter, make more data-driven decisions, and spot areas where you can get ahead of your competitors. 

Dive deep into the data you already have about your customer base by investigating marketing analytics , social media audiences, and customer surveys . It reiterates who you’re trying to reach—and more importantly, the triggers that would make them buy your product over a competitor’s.

Remind yourself of your unique selling proposition (USP) throughout this process. Tailor your marketing plan around key takeaways from these. 

Include any special features, competitive advantages, or customer favorites your marketing plan will lean on.

You could have the best mattress in the world—one made with 100 springs and cotton stitching, vigorously tested by sleep experts. But you’d struggle to market it if you lean too heavily on product features. A customer cares more about getting a peaceful night’s sleep than detailed product specifications.

“Every great marketing plan needs one thing first: a product that is 10 times better than the next,” says Nick Saltarelli, co-founder of Mid-Day Squares . “Once you have that, marketing is about deep human connections.”

Nick says, “It felt obvious that there was a sweet spot somewhere in between: people who wanted to follow along, and a true behind-the-scenes look into building a massive chocolate business from the ground up.”

As a result, the Mid-Day Squares marketing plan doesn’t prioritize product promotion. The brand instead “focuses on getting people to fall in love with us, the founders, to scale the human connection,” Nick says.

What are you trying to achieve with your marketing plan? Create both short- and long-term business goals that relate to financial metrics like revenue growth, retention , or new customers .

Most marketers measure success using return on investment (ROI) —the revenue you expect to generate after spending your marketing budget. It’s every marketer’s dream to get $100,000 in sales from $1,000 in marketing spend. While that isn’t the most realistic expectation, knowing your target ROI will prevent overspending. If your ROI is hurtling beyond your predictions, you can better allocate that budget to be spent elsewhere.

But there’s more to marketing measurement than dollar returns. Revenue isn’t always the end goal. Brand awareness, website traffic, and social media followers are short-term marketing objectives that aim to get new people into your marketing funnel. Nail them early on and you set your business up for success later down the road.

Not everyone will see your products and convert into a customer instantly. Most people progress through a sales funnel. Content that will make someone progress to the next stage depends on the one they’re currently in. 

If you were to use Facebook ads to sell your products to a generic audience modeled on your buyer persona, for example, you might not get the highest conversion rate. These people don’t know who you are, what you stand for, or why they should choose you over a competitor. 

But if you used Facebook ads to specifically target people at the bottom of your marketing funnel, you could use retargeting ads to show items someone had in their shopping cart. You’re bound to get a better return on your investment with this strategy because you’re only investing money into reaching people who just need a final nudge to convert. 

Let’s break down how you might outline your marketing funnel in a marketing plan. 

Top of the funnel (TOFU)

People at the top of your marketing funnel don’t understand who you are or what you sell. Social media, podcasts, and video content play huge roles here. Each channel is used by potential customers looking to learn or be inspired.

For this stage, prioritize metrics that give insight into how people are engaging with your top-funnel content, such as:

• Video views
• Website clicks
• Click-through rate (CTR)
• Cost per click (CPC)

Middle of the funnel (MOFU)

People reach the middle of the funnel when they know they have a problem that needs to be solved. Look at the marketing channels and formats you’re using to target these people. Most often, it’s search engines and retargeted ads.

Google Analytics is your best bet here. While the dashboard can feel overwhelming for a lot of people, you don’t need to look at every report. Use the following metrics to see how people engage with your middle-funnel content:

• Bounce rate
• Pages per session 
• Users by traffic source
• Email subscriber conversion rate 

To track the data above, especially for advertising campaigns, add the Meta pixel to all pages of your store.

Bottom of the funnel (BOFU)

Going for the hard sell? For marketing messages where the only goal is to convert your audience into paying customers, consult the back end of your ecommerce store. It’s home to sales and product-related data that helps you understand whether your marketing plan is successful, such as:

• Added to cart conversion rate
• Average order value (AOV)
• Number of orders
• Reached checkout conversion rate
• Sales conversion rate

Post-funnel and retention

Planning to build a steady stream of paying customers off the back of your ecommerce marketing plan? It's easy to assume revenue growth comes from audience growth. But oftentimes, the easiest way to grow your revenue is by focusing on the people we forget about: existing customers.

Resist the temptation to focus on flashy metrics like social media followers and YouTube subscribers. Instead, involve existing customers in your marketing plan. Use them as a source of testimonials and word-of-mouth referrals.

“Happy customers have been powerful word-of-mouth catalysts for our brand, and it has made sense to keep them engaged,” says Chris Campbell, partner at The Charming Bench Company . “We’ve been getting a steady stream of five-star ratings on websites and social media, which we then share on our Facebook, X [formerly known as Twitter], Pinterest, and Instagram profiles. It’s a great alternative to pushing loud sales messages that don’t always work.”

Define your marketing channels 

Channels are the platforms you’ll use as part of your marketing plan. Go back to your market research and uncover the online and offline channels your target audience is using to shop and get entertained or inspired.

Some of the most popular channels for ecommerce businesses include:

• Social media . Social media is used by more than six out of 10 people . Platforms like Instagram, Facebook, X, LinkedIn, and Pinterest are free to use (on the whole) and help brands reach their target audience. 
• Search engines . Some 44% of online shoppers start their product research on search engines. By making search engine optimization (SEO) part of your marketing plan, you can generate new business by reaching people when they’re actively looking for your products or services.
• Email marketing  and  SMS marketing . Email and text message inboxes are two of the most sacred places for a marketer to reach. A phone number or email address gives you a direct line of communication with your target customers, if they opt in to hear from you.
• Podcasts . Record conversations you have with your team, customers, or experts in the industry and share them with your audience. By establishing yourself or your brand as a thought leader in your industry, you’ll inspire confidence that in turn builds trust in your products.
• Offline channels. While digital marketing is vital in today’s world, offline and in-person marketing efforts can be equally powerful. Get in front of people when they’re not online, using channels like word-of-mouth recommendations , radio, billboards and outdoor advertising , or TV marketing campaigns.

There’s a sweet spot to how many channels your marketing plan should include. Go too wide and you burn resources on channels with poor returns. But become too reliant on one channel and you’re at risk.

Algorithms power most digital marketing channels. They’re praised as the type of technology that delivers personalized experiences for their users, but any changes to an algorithm can make marketing plans utterly useless overnight.

“If you rely on SEO, then any algorithm updates could potentially cut your revenue for months before you recover,” explains Marquis Matson, VP of Growth at Sozy . “If you rely on paid ads, then any changes to privacy policies can cut your revenue. If you rely on email marketing, then any ESP  [email service provider]  policy changes can cut your revenue. Diversifying your acquisition is crucial in a fast-paced digital marketing world.”

Footwear brand Hippy Feet is one ecommerce brand that failed to diversify channels. “The original marketing plan was to drive traffic to our Shopify store through ads—relying heavily on paid Facebook and Instagram traffic,” says Sam Harper, Hippy Feet’s co-founder and CEO. “While this is still a major component of our marketing strategy, the decreasing effectiveness of these ads has forced us to expand our marketing efforts.

“A diverse media strategy is crucial to helping an ecommerce business survive in this highly-dynamic market. By driving traffic through SEO, email, and media coverage, we’re more resilient and less impacted by a single tech platform changing their algorithm.”

For each channel, define which content formats you’ll use to capture attention and drive website traffic. That could include:

• Audio. Reach podcast and radio listeners with audio content. 
• Images. Capture visual learners and shoppers on visually dominant social media sites with infographics, GIFs, and memes.
• Video. Get listed on YouTube , the world's second largest search engine, with explainer videos and product demonstrations. Many social media platforms— Instagram and TikTok included—are also evolving to prioritize video content. 
• Written content. Most search engine results retrieve links to optimized written content, such as blogs , transcripts, or landing pages .

Content marketing is a beast that constantly needs to be fed. Customers want newer, fresher, more exciting content on a regular basis. That’s demanding for a small business to keep up with.

If this sounds unsustainable, consider a content marketing strategy that collects user-generated content (UGC) from existing customers. The more they share their experiences with others, the more content you have to repurpose on each channel. It’s an effective route to scale your content marketing plan and stretch your editorial calendar if your marketing department has limited resources. Don’t have time to invest in promoting the content you create? Partner with popular influencers in your niche—those whose loyal audience overlaps with your target market .

Your marketing budget is the dollar amount you expect to spend executing your marketing plan. If you’re bootstrapped, you can run a marketing plan on a tight budget .

As part of your own marketing plan, state whether you intend to use each channel organically or boost it with advertising. Most channels allow businesses to run sponsored content, which is guaranteed to reach your target market across online and offline channels, like door-to-door sales , social media, TV, billboards, and radio.

“I apply for any competitions, press opportunities, and awards to get my small business out there at any given opportunity,” says Terri-Anne Turton, founder of The Tur-Shirt Company . 

The strategy has worked: The Tur-Shirt Company has won a Junior Design Award for best fashion newcomer and a shoutout from media entrepreneur Steven Bartlett after entering his #DeserveToBeFound competition with Facebook.

“I focus on those my target market knows of to build credibility,” says Terri-Anne. “Plus, most of the awards I enter are free or low-cost; they just need some time investment and creativity to take part. It proves my USP to my target market—that my kids’ clothing products are unique—without investing thousands into advertising.”

While you can run a strategy with little to no budget, this section of your marketing plan needs to account for more than any planned advertising spend. Time is a resource that needs to be managed and accounted for. Be sure to detail how much time you plan to spend executing your marketing strategy.

If you have a designated marketing team, it’s also worth noting who will be responsible for each element of your marketing plan. Who’s responsible for this marketing plan? Which team members are executing it? What experience do they have with marketing?

More importantly, detail what you expect from the resources you’re putting into your marketing plan. If you plan to spend $40,000 throughout the coming year, how much revenue will you get in return? If you’re producing a marketing plan for a large or public company, this is what stakeholders really want to see.

Go back to the KPIs (key performance indicators) you set in the earlier section of your marketing plan. How will you determine whether you’ve met these KPIs? What happens if you’re exceeding or falling short of your target? It’s good to have a plan of action for either case.

Let’s put that into practice and say you expected to increase sales by 20% through your social media marketing plan. Detail exactly how you’d measure this, for example, you could say, “we’ll look at our Shopify sales report once per month and analyze which channel is meeting this KPI. If a channel falls behind, we’ll evaluate why and either adjust our marketing plan or deprioritize it in favor of more effective channels.” 

The best marketers approach their plans with an open mind. The hypothesis you started with might be proven wrong. Don’t take that as a negative. You just got closer to finding what will work. 

Tips for creating your marketing plan

Set conservative expectations.

While it’s good to approach your marketing goals with confidence, high expectations often lead to disappointment when we fail to meet them. That disappointment is magnified in a marketing plan, as stakeholders or founders will have already bought into unrealistic predictions and business objectives.

Start small

Don’t overwhelm yourself and your team by trying to generate results with all marketing tactics at once: running Facebook ads, tweeting like crazy, writing daily blog posts for SEO, and making constant changes to site and content strategy to improve your conversion rate.

If you’re very lucky, one of these tactics will bring you consistent traffic and sales. But more often than not, trying everything at once will make you extremely busy without anything to show for it.

Take it from Jameela Ghann, owner of Alora : “When we first started Alora, 10 years ago, our marketing plan was unrealistic. We were just a couple of people making plans that were good on paper but almost impossible to execute with a small team.” 

Originally, Jameela’s team planned to invest in several marketing channels—online and offline advertising, PR, trade shows, influencer marketing, and blogging included. However, the team changed its marketing plan. They went deep on one channel instead of spreading resources too thin by trying to be everywhere at once.

“We stuck to one course of action that was where our customers were, and ready to buy, and easiest for us to see a good ROI,” Jameela says. “What really worked for us was focusing on a handful of channels that we knew we could do well.”

Go back to your audience research and identify three channels your target audience uses most often. Put most of your energy into perfecting those before overcomplicating things with a more comprehensive marketing plan.

Use historical data as a guide

Past performance can help you temper your expectations for your marketing plan. If you know your click-through rate (CTR) for Facebook ads is 0.1%, don’t stray too far from that baseline with your social media marketing .

The same goes for website content optimized for search : If you’re currently getting 10,000 visitors per month from Google, scaling your traffic up to a million is a tough battle. Instead, 50,000 visitors is a more achievable goal.

Allow for flexibility

The purpose of a marketing plan isn’t to create a never-fail manual. Whether your marketing team has fallen victim to completion bias or focused too heavily on one channel, sticking rigidly to your original plan can be a big mistake.

Imine Martinez, assistant manager at Rainbowly , says: “Our regular campaigns targeting mainly birthday celebrations and anniversaries offered poor return on ad spend and inconsistent results over the months.

“That said, during festive seasons, such as Christmas or New Year’s, our targeted campaigns were particularly profitable, achieving five times return on ad spend with much cheaper cost per click and impression.”

Continuing with the same marketing strategies despite this data would only have resulted in heartbreak. Rainbowly would be pouring money down the drain on ads that wouldn’t perform, just because its marketing plan said to do so.

Creating a marketing plan is the first step

A lot of hard work goes into a successful marketing plan. To create an attainable one, you’ll need to spend hours diving into competitive research, audience data, and channels your target market consults when researching new products.

Most importantly, know that marketing is unpredictable. There are thousands of scenarios that fundamentally change the marketing strategy that’s best for your business. Global pandemics, PR crises, and the emergence of new social media platforms are unpredictable.

Treat your marketing plan like the best-case scenario. Plan SMART goals and strategies but remember to be flexible to give your marketing the best chance of success.

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Marketing plan FAQ

How much does a marketing plan cost, how often should a marketing plan be reviewed, what are the 4 steps of a marketing plan.

• Conduct market research
• Outline your marketing channels and formats
• Create goals and measure performance

Why is marketing plan important?

What are some marketing plan mistakes.

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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.

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.

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 .

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.

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.

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.

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

Whatever you decide on, be sure to document it 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

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.

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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:

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 .

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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.

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How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.

Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.

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Drafting the Summary

An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.

Ask for Help

When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.

After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business. 

The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.

Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.

Numbers-based Goals

Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.

Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.

Intangible Goals

Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.

The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.

If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.

This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.

You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.

Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.

Business Operations Costs

Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.

Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.

Other Costs

Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.

Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

What are some common mistakes in a business plan?

The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.

What basic items should be included in a business plan?

When writing out a business plan, you want to make sure that you cover everything related to your concept for the business,  an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.

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Julia is a writer in New York and started covering tech and business during the pandemic. She also covers books and the publishing industry.

Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Additionally, she is a Columnist at Inc. Magazine.

Vacation Rental Business Plan: 15 Steps for Success (Free Template)

Investing in a vacation rental business isn’t a decision to take lightly. However, as the short-term rental industry continues to grow, 2024 could be the perfect time to do so.

The success of any short-term rental business will depend on having actionable goals and clear objectives based on thorough market research, whether you’re a newbie or an experienced property investor.

It’s crucial to create a strategic business plan for short-term rentals before you hand over a deposit or receive the keys. A viable business and management plan will help you identify the risks and prepare you for the challenges ahead.

In this article, we look at what a business plan is, give you samples and templates to use, and analyze the 15 steps your vacation rental business plan needs to help you get started.

Don’t see the form to download our Vacation Rental Business Plan PDF? Click here .

What is a vacation rental business plan?

Simply put, your business plan is an overarching set of rules, goals, and frameworks to help you make decisions for your new business and its future.

Not only will a vacation rental business plan help you define your strategy, but you can repeatedly refer back to it to ensure you are going in the right direction.

Business plan vs. vacation rental business model

Many aspiring rental owners confuse these two documents or assume they’re the same, so let’s review the differences.

A short-term rental business plan is a detailed document that outlines your business goals and how you plan on achieving them. A short-term rental business model, on the other hand, is your core framework for providing value to guests and operating profitably. Business models are much shorter, often including only a customer value proposition and pricing strategy.

Why do you need a vacation rental business plan?

Vacation rental owners are eager to hit the ground running when they buy their first properties—who wouldn’t be? Any vacancy or downtime on the property means more money that’s coming out of your pocket. A vacation rental property business plan will guide you through the initial steps and beyond, helping you maximize your profit and success as a host.

Beyond just making money, having a good business plan for vacation rentals will allow you to measure success and identify areas for improvement accurately. For example, it will help you focus on key metrics, such as your budget, local market insights, and expansion opportunities.

How to write a short-term rental business plan: video summary

15 steps to create your vacation rental business plan

To make things easier for budding entrepreneurs, we’re including 15 steps to help you succeed in writing your short-term rental business plan. We also reached out to the following industry professionals for their insights!

• Antonio Bortolotti , founder of Vacation Rental Secrets and host of the Vacation Rental World Summit
• Cynthia Chan , co-founder of Airhosts Forum (the largest Airbnb host forum online)
• Karen Spencer , founder of The Business of Holiday Rental

Prefer a downloadable template? Scroll to the bottom of the page to download our customizable Short-Term Rental Business Plan PDF !

Step 1. Executive summary

For people outside Fortune 500 companies, writing an “executive summary” can be a bit scary. However, it’s a lot simpler than you may think!

An executive summary is just a few sentences that summarize your vacation rental business and includes all the essential information you want to get across. This is so that anyone can read the first page of your plan and know, at a glance, what your business entails.

Start by asking yourself the famous five Ws:

• Where is your vacation house located? By the beach, in the middle of the city, or in the countryside?
• What is it? A family vacation home, a glamping accommodation, or an ideal spot for business travelers?
• Who is it for? Families , couples , or large groups of friends?
• When is it best to stay at your rental? The summer, winter, or year-round?
• Why do you have this property? Is this a spare room you’re renting out for extra cash, a way to top up your pension if you’re retired, or your main form of income?

Answering these questions will help you outline what information you would like to include in your executive summary. You can then rewrite your responses to make sure your summary sounds professional.

Note: If you are still unsure about the details of your executive summary, feel free to do it at the end of your business plan—it’s a case of saving the best until last!

Step 2. Business goals

Your executive summary is going to give you a broad overview of where your business is going, but the goals section will help to further solidify this vision. Goals are what help you to set markers for what success in your business looks like.

Are you satisfied with a couple of bookings a month, or are you expecting a full reservation calendar by the end of the year? You’ll need to set goals to help pin this down.

What’s more, make sure your business goals are SMART: smart, measurable, attainable, relevant, and time-based.

Step 3. Value proposition

As with any business, you’ll need to state why customers are going to choose your business. It’s difficult to take yourself out of the equation when evaluating your business. After all, you’ve poured your blood, sweat, and tears into this project, so why wouldn’t guests choose you?

No amount of effort is enough if it’s not adding any value to your vacation rental. Consider how your vacation rental will provide a guest experience that the other properties in your area simply can’t provide.

Step 4. Company analysis

In this section, you should aim to explain the unique selling points (USPs) of your new vacation rental business, outlining what it will bring to the existing market.

Start by asking a few simple questions to figure out how you’re different (and better) than other rental properties out there. After all, once you are confident in your strengths, your guests will be, too!

Here are a few examples:

Is it better than others because of its location?

• Is it close to the beach?
• Main public transport lines?
• Is it off-the-grid?

Is the price of your accommodation better?

• Are you the cheapest accommodation around?
• Are you the best value?
• Do you offer discounts at certain times of the year?

Are the interiors of your property different or better than the rest?

• Do you offer a cozy, rustic getaway?
• Do you offer a fireplace where a family can sit at night?
• Is it a themed vacation rental ?

Step 5. Industry analysis

If you want to be successful in the rental business industry, you’ll need to be strategic and competitive in your company management plan. So, this section is where you state some key facts about current trends and expectations.

One of the ways to do this is by carrying out an industry analysis. This is basically looking at other vacation rental businesses and evaluating them.

Here are some sample questions that will help start your industry analysis:

What do vacation rentals near me charge per night?

• Would you class it as affordable or good value?
• Is it less than $50 per night? Or Is it more than $300?
• Think about the figures you come up with in relative terms, weighing the value of what the business is offering against the price they charge. This will help you start to price competitively.

Who is their target audience and clientele?

• Are they families ?
• Couples looking for a romantic break?
• Do they target students and school groups who need large but basic accommodations?

Are they luxury units or more basic rentals?

• Are they upmarket rentals in the most expensive parts of your area?
• Or are they modest vacation home rentals that students could afford?
• Do the rentals tend to fall in one end of the price range, leaving a gap in the market?

Are they self-catered or Bed & Breakfast?

• Do they offer a light breakfast?
• Or do they offer a breakfast buffet?

What websites/agencies do they use for bookings and advertisements?

• Are all your competitors advertising on Airbnb , Vrbo , etc.?
• Do they collaborate with local tourism agencies?
• Are they all missing out on a popular booking website that only you know about?

“I recommend owners to focus on profit per booking, not occupancy rates. We’re in it to make money, not fill as many nights as possible (that comes next). We could all be 100% full if we undervalued what we were offering. That doesn’t make good business sense. Be prepared to spend more when you first start out, to bring a quality product to the market. You’ll soon reap the rewards this investment in your future business will bring.” – Karen Spencer

Step 6. Customer analysis

Your customers—or rather, your guests—are how you are going to make your money. That’s why it’s important to understand and target them properly.

In your plan, create different buyer personas based on the types of guests you want to attract. This is like a profile of your ideal customer, from age to income. You should try to make it as detailed as possible because it will help your business grow later.

Creating buyer personas starts with a customer analysis. A customer analysis is just getting to know your customers and what they want and need from a rental property and a vacation.

Here are some key questions you should ask yourself about your ideal guest:

• What’s their name? It may seem silly to name a fictional person, but it will bring your customer analysis to life and help you imagine the buyer persona.
• What do they work as? For example, are they a high-flying banker, a medical professional, or an educator?
• How old are they? Think in terms of age ranges: 18-25, 25-40, and 40-60, and 60+.
• Do they have a family? If so, how many children do they have?

Keep going with questions like this until you’ve built an entire profile of the person. This will then help you understand their values, spending habits, common complaints, and amenities they’ll be looking for.

Getting anxious to dive in? Scroll to the bottom of the page to download our customizable Vacation Rental Business Plan PDF and get started!

Step 7. Competitive analysis

Another element of your vacation rental property business plan is conducting competitor research. Take a look at the market to find your direct competitors and analyze them to see how your business can thrive.

Competitive analysis is similar to industry analysis, but this time you’re going to focus on your immediate competitors rather than the industry as a whole. For example, if your short-term rental is a house by the beach, your direct competitors would be other accommodation providers on the beach.

With competitive analysis, you want to look at the people who may win a booking over you and use what you find to put yourself on top. Ask questions such as the following:

How much are my competitors charging per night?

• Competitor 1 – $100
• Competitor 2 – $150
• Competitor 3 – $200

Using this information, you may decide to drop your prices below $100 to become the cheapest option among your competitors and increase your booking rates.

What standard of accommodation do they offer?

• Are they all standard camping sites?
• Or are they high-end units?
• Are they somewhere in between, suitable for most travelers?

Do they offer airport transfers/pick-up service?

• Yes, but for a very high price.
• Yes, and for a reasonable price.

Do they offer a wide range of amenities in the house?

• No, most don’t even offer Wi-Fi.
• Yes, some offer basic things like a washing machine and television.
• Yes, all offer basic amenities, and some even include luxury amenities (like a swimming pool or gym).

Step 8. Operations plan

The operations plan is simply an insight into how you’re going to run your new business on a day-to-day basis. It will consider whether you will hire any staff, what standards you will set, and how you will keep track of inventory and other administrative duties.

This will be one of the most straightforward parts of your business plan. Chances are, you already have all of this planned.

Here are a few helpful prompts and examples in case you get stuck:

Am I going to hire any staff?

• No, I’m only renting out one room in my home, which I can do myself.
• Yes, I’m renting out several large apartments, and I have a separate, full-time job.
• No, my partner and I will do the work together.

Who is going to clean the rentals between guests?

• A cleaning agency?
• A neighbor?

Do I need to hire an accountant to help me handle the finances of my business?

• No, I’m comfortable dealing with all of those things.
• Yes! I don’t know the first place to start when dealing with taxes or business records.

Who will deal with bookings and customer complaints?

• Myself, with only one room it will be very manageable.
• I will hire an assistant to help with all of this administration stuff, I won’t have time!
• My daughter/son, it will be a good part-time job for them to give them an allowance.

To keep things simple, you can also use solutions such as Lodgify’s property management software and channel manager .

Step 9. Marketing plan

Explain which strategies you will use to advertise your business and generate bookings. Think about both online and offline marketing , as well as any campaigns or promotions you plan to run externally.

This is when your buyer persona (which you created earlier) will come in handy. If you know the people you’re trying to target, you’ll know what websites they use and what type of marketing will be suitable for them.

Your marketing strategy can be really diverse. Here are some questions to help you sketch it out:

What methods of online marketing should I use?

• I will just list my bookings on one travel website because that is enough for me.
• I will have my own, personal vacation rental website . My site, my rules!
• I have several properties to rent, so I will list them on several vacation rental websites to increase traffic and booking numbers.
• I will pay for Google Ads in my local area.

What methods of offline marketing should I use?

• None, online marketing will be enough for me.
• I will print flyers and leave them in local tourist offices.
• I will give each guest business cards and ask them to recommend me to friends and colleagues.

Do I have a website?

• No, I don’t want/need to create one.
• No, but I want one! I need to hire someone to create one for me or try a professional website builder .
• Yes, I have one, and I’m going to hire a search engine optimization specialist to help me increase the number of visits to it.

Do I have business cards ?

• No, I don’t need any.
• Yes, I have some but I won’t use them.
• Yes, I have some, and I’m going to use them as part of my marketing strategy.

“While I’m not sure there is a one-formula-fits-all, there are a few things that helped me: a great website, awesome warm-hearted, personal communication skills, finely tweaked standards, procedures and operations, an open mind and willingness to widen your horizon by questioning what you’ve achieved and learning what’s next. Because we are in an ever-changing and challenging world and only those willing to adapt to the changes will survive.” – Antonio Bortolotti

Step 10. Task delegation and employee management plan

It pays off to dream big, but make sure you have the capacity to do so. How will you manage guest turnover if you’re planning to rent your property every night? Better yet, who will manage guest turnover?

Depending on the scale, your goals will take some serious work to get there. Make sure you’ve factored in how you will manage it alone or how you plan to delegate tasks.

If you know that you’ll need to hire some staff, be it a property manager, cleaning service , or maintenance person, you’ll have to plan for how you’re going to distribute and delegate the work. Using task management tools and including them in your business plan outline will help you to make the most of your teams’ efforts.

“In such a demanding and dynamic industry as ours, finding the right combination of software that aligns with your individual business needs is key to accomplishing all this. And it’s not easy.” – Antonio Bortolotti

Step 11. Distribution plan

Websites like Airbnb and Vrbo are referred to as online travel agencies , or OTAs. For all new hosts, presence on OTAs and listing sites is essential to get bookings.

Your distribution plan should consider which channels you’ll be advertising on, how much they’ll cost you, and how you’ll manage them (hint: you might need a channel manager ).

Here are some helpful example questions to get you started writing a distribution plan:

Which OTAs do I want to list my property on?

• Every OTA that is available? I need lots of bookings!

How much will this cost me?

• Is it free?
• Do you have to pay monthly to list on these websites?
• Do they take a commission off bookings you receive from that website?

Are there any tools available to help me manage all of this?

• Yes! A channel manager .
• A channel manager is a tool you can use to ensure all of your bookings, dates, and arrangements remain in one place so you don’t get overwhelmed managing calendars from multiple OTAs.

When I do get a booking, how will I receive the payment?

• PayPal account.
• Bank transfer.
• Cash/card payments directly from guests upon arrival.

“If a host’s goal is to maximize their revenue and bookings, it definitely makes sense to list on several platforms. Based on research from one of our partners, Tokeet, they found that some of their hosts had reported a 20% increase in bookings once they used a channel manager to list across several home-sharing sites. I would recommend that if a host is listing across several platforms, they should utilize a channel management program to make it easier to manage their listings and their calendars so they don’t double book.” – Cynthia Chan

Step 12. Revenue management plan

So, this is the numbers part. But don’t worry— revenue management is not as scary as it sounds!

In this section, you’ll have to include information about the rates you plan to charge for your vacation rental, alongside any details about pricing or yield management tools you will use.

For people who feel overwhelmed by this, there are a lot of tools and software out there to help. To start with, we’ve written some quick questions to cover the basics of your revenue management plan to make sure your accounts and business stay well in the green.

How much will I charge per night?

• Fixed price: $100 per night.
• I’ll use dynamic pricing , increasing the amount during busy periods.
• I’m still undecided.

Pro tip: Lodgify Dynamic Pricing uses an algorithm that factors in 40+ listing attributes, market conditions, and local trends to automatically optimize your nightly rates.

What level of taxes will I have to pay to the government?

• I’m not sure. I need to research this before writing my revenue management plan.

How much will my utilities cost?

• Water is $50 a month.
• Trash collection is $30 a month.
• Electricity will vary depending on how many guests I’ll have.

What will my staff costs be?

• Zero, I’m doing all of the work myself.
• Low, I’m paying my teenage children an allowance to help me with some household chores.
• High, I’m going to hire a cleaning agency, a marketing specialist, a website developer, etc.

What’s my target monthly income?

• Anything above $0 at the beginning?

“Set stretching yet realistic prices. Quality holiday homes can charge more (because they are worth more) than an average place. When it comes to setting your prices, you need to know what it costs you to welcome each set of guests and work up from there, ensuring a healthy profit per booking every time. The more you charge per week, the more revenue per booking, yet your changeover costs, your marketing costs, your time spent, will be the same.” – Karen Spencer

Step 13. Financial plan

Think about how you are going to finance your new business. As with anything in life, proper budgeting will prevent future stress and help your business thrive.

So, what kind of information makes up a financial plan?

Will I need to take out a loan?

• No, I’m just renting out an existing property with everything ready to go.
• Yes, I will need a small loan to renovate this property.
• Yes, I will need a substantial loan to purchase the property/land where I’m going to build my rental.

What will the interest rates be?

Do I have savings I’m ready to invest into it?

• I don’t want to put my savings into it.
• Yes, I have a small amount that I’ll use for redecoration.
• Yes, I have lots of savings that I’ve been keeping for a project like this!

What level of monthly loan payments can I manage?

• None, my business has small incomings, so I don’t want to take a loan.
• $100 for a small loan?
• $750+ for substantial mortgage repayments?

“Not factoring in the cost of educating yourself is a luxury you can’t afford. The reason I’m part of online communities (I go to industry conferences like VRMA and I put together the Vacation Rental World Summit ) is because I’m the first one to not know everything.

I’m aware that if I want my business to thrive while this industry changes and crashes, I need to stay informed on what’s changing, adjust my strategies accordingly, and be prepared for what’s coming.” – Antonio Bortolotti

Step 14. Key milestones and business future

Write down your plans and goals for your business, plus what key milestones will help you achieve these targets.

When you start any project, whether it is going back to university, exercising, or starting a business, it is really important to track your progress. This section will be useful to refer back to and ensure you’re on the right track.

Here are some good milestones to use for your rental business:

How much do I want to make each month?

• $500? $750? $3.000?
• This answer will be linked to your financial plan, so this is a good time to go back and look at what you wrote down in Step 10.

How many guests do I want in the first quarter?

• As many as possible—I know I’m still in the beginning.

What rate of growth do I want in my bookings year-on-year?

• I’ll figure this out in the second year. I’m just getting started at the moment.

How many returning clients do I want each year?

• At least 10?
• More than 20—I’m confident in the service I provide.
• As many as possible!

“The biggest hurdle that Airbnb hosts have to get through in their first few years of business is to get enough reviews so that guests are comfortable staying at your listing. The more reviews you have, the higher your listing appears in the search results as well, so the biggest focus for hosts should be to get as many good reviews as possible.” – Cynthia Chan

Step 15. Vacation rental business plan: appendix

The appendix in your vacation rental business plan should include all of the relevant documents you have for your business, containing the vital information you need to keep things running.

For example, ask yourself:

• What’s the number for a plumber, just in case I have problems with the pipes?
• Where are my tax registration details?
• Have I kept receipts of all of the things purchased for my business recently?
• Have I backed up my online bookings and calendar somewhere?

Scroll to the bottom of the page to download our customizable Short-Term Rental Business Plan PDF and get started!

Vacation rental business plan: tips and tricks

So, you followed the 15 steps above. Now you’re done, right?

Well, not quite. With the industry growing increasingly competitive, it pays off to follow a few additional tips to get a competitive edge:

• It’s all about the timing. Writing a business plan before buying the rental home is advisable, so you can truly judge if it is a worthwhile investment and business venture.
• You get back what you put in. If you invest time, money and effort into your business, you will reap financial and personal rewards. And to be number one, you need to invest more effort and time than your competitors.
• Quality over quantity. Don’t forget that most people will choose value over price, so don’t compromise one for the other.
• Get yourself out there. The more places you advertise your business (your own website , third-party platforms , social media , etc.), the more bookings you’re going to get.
• Enjoy yourself! The old saying that you’ll never work a day in your life if you love what you do is completely true with vacation rentals. And the more you enjoy yourself, the better the experience will be for guests.

“Quality is essential in everything you do. From the product you bring to the market to the excellent customer service you offer your guests.” – Karen Spencer

Common mistakes found in short-term rental business plans

For many hosts, owning a vacation rental is their first business venture. So, it’s all too easy to make mistakes along the way. Here are some of the most common mistakes to look out for:

• Targeting everyone: We know you want to welcome as many guests as possible. Still, you should avoid trying to attract all guest types, as it might lead to attracting none. Instead, define your target customers based on your value proposition.
• Ignoring the competition: Evaluate your competitive edge in price, value, style, and availability to see where you need to improve. Recognize that rivals may outdo you, even if you believe your rental is the best.
• Making an unrealistic finance plan: Avoid overestimating revenue and underestimating the budget. You may have big goals, but maintain a realistic approach to financial planning.
• Assuming standard home insurance covers you: Include vacation rental insurance , and specifically a policy tailored for vacation rental owners, in your business plan to ensure proper coverage.

Download our free vacation rental business plan template

Don’t know where to start? Don’t worry!

All you have to do is download our free vacation rental business plan sample below and fill in your own information. Our handy guide includes all of the questions you need to ask yourself before starting your new venture.

Hi, Amazing article to learn from basics to advanced in vacation rental business. Thanks for sharing this wonderful article with us.

Fantastic article Jess as always. Even though we’re on our 2nd property and they both are doing well we are going to go back and go through the steps in the business plan. I bet it will help us refine our ideas for moving forward. Thanks again!

Well… consider yourself added to my blogroll. I have like six other blogs I read on a weekly basis, guess that number just increased to seven! Keep writing!

What kind of insurance is available?

Hi Dorothy,

I suggest you check out our article about the different types of vacation rental insurance available. You’ll find it here .

Riley & The Lodgify Team

Thanks for sharing this useful information! Hope that you will continue with the kind of stuff you are doing.

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