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Goals and Objectives for Business Plan with Examples

Published Nov.05, 2023

Updated Apr.23, 2024

By: Jakub Babkins

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Every business needs a clear vision of what it wants to achieve and how it plans to get there. A business plan is a document that outlines the goals and objectives of a business, as well as the strategies and actions to achieve them. A well-written business plan from business plan specialists can help a business attract investors, secure funding, and guide its growth.

Understanding Business Objectives

Business objectives are S pecific, M easurable, A chievable, R elevant, and T ime-bound (SMART) statements that describe what a business wants to accomplish in a given period. They are derived from the overall vision and mission of the business, and they support its strategic direction.

Business plan objectives can be categorized into different types, depending on their purpose and scope. Some common types of business objectives are:

• Financial objectives
• Operational objectives
• Marketing objectives
• Social objectives

For example, a sample of business goals and objectives for a business plan for a bakery could be:

• To increase its annual revenue by 20% in the next year.
• To reduce its production costs by 10% in the next six months.
• To launch a new product line of gluten-free cakes in the next quarter.
• To improve its customer satisfaction rating by 15% in the next month.

The Significance of Business Objectives

Business objectives are important for several reasons. They help to:

• Clarify and direct the company and stakeholders
• Align the company’s efforts and resources to a common goal
• Motivate and inspire employees to perform better
• Measure and evaluate the company’s progress and performance
• Communicate the company’s value and advantage to customers and the market

For example, by setting a revenue objective, a bakery can focus on increasing its sales and marketing efforts, monitor its sales data and customer feedback, motivate its staff to deliver quality products and service, communicate its unique selling points and benefits to its customers, and adjust its pricing and product mix according to market demand.

Advantages of Outlining Business Objectives

Outlining business objectives is a crucial step in creating a business plan. It serves as a roadmap for the company’s growth and development. Outlining business objectives has several advantages, such as:

• Clarifies the company’s vision, direction, scope, and boundaries
• Break down the company’s goals into smaller tasks and milestones
• Assigns roles and responsibilities and delegates tasks
• Establishes standards and criteria for success and performance
• Anticipates risks and challenges and devises contingency plans

For example, by outlining its business objective for increasing the average revenue per customer in its business plan, a bakery can:

• Attract investors with its viable business plan for investors
• Secure funding from banks or others with its realistic financial plan
• Partner with businesses or organizations that complement or enhance its products or services
• Choose the best marketing, pricing, product, staff, location, etc. for its target market and customers

Setting Goals and Objectives for a Business Plan

Setting goals and objectives for a business plan is not a one-time task. It requires careful planning, research, analysis, and evaluation. To set effective goals and objectives for a business plan, one should follow some best practices, such as:

OPTION 1: Use the SMART framework. A SMART goal or objective is clear, quantifiable, realistic, aligned with the company’s mission and vision, and has a deadline. SMART stands for:

• Specific – The goal or objective should be clear, concise, and well-defined.
• Measurable – The goal or objective should be quantifiable or verifiable.
• Achievable – The goal or objective should be realistic and attainable.
• Relevant – The goal or objective should be aligned with the company’s vision, mission, and values.
• Time-bound – The goal or objective should have a deadline or timeframe.

For example, using the SMART criteria, a bakery can refine its business objective for increasing the average revenue per customer as follows:

• Specific – Increase revenue with new products and services from $5 to $5.50.
• Measurable – Track customer revenue monthly with sales reports.
• Achievable – Research the market, develop new products and services, and train staff to upsell and cross-sell.
• Relevant – Improve customer satisfaction and loyalty, profitability and cash flow, and market competitiveness.
• Time-bound – Achieve this objective in six months, from January 1st to June 30th.

OPTION 2: Use the OKR framework. OKR stands for O bjectives and K ey R esults. An OKR is a goal-setting technique that links the company’s objectives with measurable outcomes. An objective is a qualitative statement of what the company wants to achieve. A key result is a quantitative metric that shows how the objective will be achieved.

OPTION 3: Use the SWOT analysis. SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. A SWOT analysis is a strategic tool that helps the company assess the internal and external factors that affect its goals and objectives.

• Strengths – Internal factors that give the company an advantage over others. 
• Weaknesses – Internal factors that limit the company’s performance or growth. 
• Opportunities – External factors that allow the company to improve or expand. 
• Threats – External factors that pose a risk or challenge to the company.

For example, using these frameworks, a bakery might set the following goals and objectives for its SBA business plan :

Objective – To launch a new product line of gluten-free cakes in the next quarter.

Key Results:

• Research gluten-free cake market demand and preferences by month-end.
• Create and test 10 gluten-free cake recipes by next month-end.
• Make and sell 100 gluten-free cakes weekly online or in-store by quarter-end.

SWOT Analysis:

• Expertise and experience in baking and cake decorating.
• Loyal and satisfied customer base.
• Strong online presence and reputation.

Weaknesses:

• Limited production capacity and equipment.
• High production costs and low-profit margins.
• Lack of knowledge and skills in gluten-free baking.

Opportunities:

• Growing demand and awareness for gluten-free products.
• Competitive advantage and differentiation in the market.
• Potential partnerships and collaborations with health-conscious customers and organizations.
• Increasing competition from other bakeries and gluten-free brands.
• Changing customer tastes and preferences.
• Regulatory and legal issues related to gluten-free labeling and certification.

Examples of Business Goals and Objectives

To illustrate how to write business goals and objectives for a business plan, let’s use a hypothetical example of a bakery business called Sweet Treats. Sweet Treats is a small bakery specializing in custom-made cakes, cupcakes, cookies, and other baked goods for various occasions.

Here are some examples of possible startup business goals and objectives for Sweet Treats:

Earning and Preserving Profitability

Profitability is the ability of a company to generate more revenue than expenses. It indicates the financial health and performance of the company. Profitability is essential for a business to sustain its operations, grow its market share, and reward its stakeholders.

Some possible objectives for earning and preserving profitability for Sweet Treats are:

• To increase the gross profit margin by 5% in the next quarter by reducing the cost of goods sold
• To achieve a net income of $100,000 in the current fiscal year by increasing sales and reducing overhead costs

Ensuring Consistent Cash Flow

Cash flow is the amount of money that flows in and out of a company. A company needs to have enough cash to cover its operating expenses, pay its debts, invest in its growth, and reward its shareholders.

Some possible objectives for ensuring consistent cash flow for Sweet Treats are:

• Increase monthly operating cash inflow by 15% by the end of the year by improving the efficiency and productivity of the business processes
• Increase the cash flow from investing activities by selling or disposing of non-performing or obsolete assets

Creating and Maintaining Efficiency

Efficiency is the ratio of output to input. It measures how well a company uses its resources to produce its products or services. Efficiency can help a business improve its quality, productivity, customer satisfaction, and profitability.

Some possible objectives for creating and maintaining efficiency for Sweet Treats are:

• To reduce the production time by 10% in the next month by implementing lean manufacturing techniques
• To increase the customer service response rate by 20% in the next week by using chatbots or automated systems

Winning and Keeping Clients

Clients are the people or organizations that buy or use the products or services of a company. They are the source of revenue and growth for a company. Therefore, winning and keeping clients is vital to generating steady revenue, increasing customer loyalty, and enhancing word-of-mouth marketing.

Some possible objectives for winning and keeping clients for Sweet Treats are:

• To acquire 100 new clients in the next quarter by launching a referral program or a promotional campaign
• To retain 90% of existing clients in the current year by offering loyalty rewards or satisfaction guarantees

Building a Recognizable Brand

A brand is the name, logo, design, or other features distinguishing a company from its competitors. It represents the identity, reputation, and value proposition of a company. Building a recognizable brand is crucial for attracting and retaining clients and creating a loyal fan base.

Some possible objectives for building a recognizable brand for Sweet Treats are:

• To increase brand awareness by 50% in the next six months by creating and distributing engaging content on social media platforms
• To improve brand image by 30% in the next year by participating in social causes or sponsoring events that align with the company’s values

Expanding and Nurturing an Audience with Marketing

An audience is a group of people interested in or following a company’s products or services. They can be potential or existing clients, fans, influencers, or partners. Expanding and nurturing an audience with marketing is essential for increasing a company’s visibility, reach, and engagement.

Some possible objectives for expanding and nurturing an audience with marketing for Sweet Treats are:

• To grow the email list by 1,000 subscribers in the next month by offering a free ebook or a webinar
• To nurture leads by sending them relevant and valuable information through email newsletters or blog posts

Strategizing for Expansion

Expansion is the process of increasing a company’s size, scope, or scale. It can involve entering new markets, launching new products or services, opening new locations, or forming new alliances. Strategizing for expansion is important for diversifying revenue streams, reaching new audiences, and gaining competitive advantages.

Some possible objectives for strategizing for expansion for Sweet Treats are:

• To launch a new product or service line by developing and testing prototypes
• To open a new branch or franchise by securing funding and hiring staff

Template for Business Objectives

A template for writing business objectives is a format or structure that can be used as a guide or reference for creating your objectives. A template for writing business objectives can help you to ensure that your objectives are SMART, clear, concise, and consistent.

To use this template, fill in the blanks with your information. Here is an example of how you can use this template:

Example of Business Objectives

Our business is a _____________ (type of business) that provides _____________ (products or services) to _____________ (target market). Our vision is to _____________ (vision statement) and our mission is to _____________ (mission statement).

Our long-term business goals and objectives for the next _____________ (time period) are:

S pecific: We want to _____________ (specific goal) by _____________ (specific action).

M easurable: We will measure our progress by _____________ (quantifiable indicator).

A chievable: We have _____________ (resources, capabilities, constraints) that will enable us to achieve this goal.

R elevant: This goal supports our vision and mission by _____________ (benefit or impact).

T ime-bound: We will complete this goal by _____________ (deadline).

Repeat this process for each goal and objective for your business plan.

How to Monitor Your Business Objectives?

After setting goals and objectives for your business plan, you should check them regularly to see if you are achieving them. Monitoring your business objectives can help you to:

• Track your progress and performance
• Identify and overcome any challenges
• Adjust your actions and strategies as needed

Some of the tools and methods that you can use to monitor your business objectives are:

• Dashboards – Show key data and metrics for your objectives with tools like Google Data Studio, Databox, or DashThis.
• Reports – Get detailed information and analysis for your objectives with tools like Google Analytics, Google Search Console, or SEMrush.
• Feedback – Learn from your customers and their needs and expectations with tools like SurveyMonkey, Typeform, or Google Forms.

Strategies for Realizing Business Objectives

To achieve your business objectives, you need more than setting and monitoring them. You need strategies and actions that support them. Strategies are the general methods to reach your objectives. Actions are the specific steps to implement your strategies.

Different objectives require different strategies and actions. Some common types are:

• Marketing strategies
• Operational strategies
• Financial strategies
• Human resource strategies
• Growth strategies

To implement effective strategies and actions, consider these factors:

• Alignment – They should match your vision, mission, values, goals, and objectives
• Feasibility – They should be possible with your capabilities, resources, and constraints
• Suitability – They should fit the context and needs of your business

How OGSCapital Can Help You Achieve Your Business Objectives?

We at OGSCapital can help you with your business plan and related documents. We have over 15 years of experience writing high-quality business plans for various industries and regions. We have a team of business plan experts who can assist you with market research, financial analysis, strategy formulation, and presentation design. We can customize your business plan to suit your needs and objectives, whether you need funding, launching, expanding, or entering a new market. We can also help you with pitch decks, executive summaries, feasibility studies, and grant proposals. Contact us today for a free quote and start working on your business plan.

Frequently Asked Questions

What are the goals and objectives in business.

Goals and objectives in a business plan are the desired outcomes that a company works toward. To describe company goals and objectives for a business plan, start with your mission statement and then identify your strategic and operational objectives. To write company objectives, you must brainstorm, organize, prioritize, assign, track, and review them using the SMART framework and KPIs.

What are the examples of goals and objectives in a business plan?

Examples of goals and objectives in a business plan are: Goal: To increase revenue by 10% each year for the next five years. Objective: To launch a new product line and create a marketing campaign to reach new customers.

What are the 4 main objectives of a business?

The 4 main objectives of a business are economic, social, human, and organic. Economic objectives deal with financial performance, social objectives deal with social responsibility, human objectives deal with employee welfare, and organic objectives deal with business growth and development.

What are goals and objectives examples?

Setting goals and objectives for a business plan describes what a business or a team wants to achieve and how they will do it. For example: Goal: To provide excellent customer service. Objective: To increase customer satisfaction scores by 20% by the end of the quarter. 

At OGSCapital, our business planning services offer expert guidance and support to create a realistic and actionable plan that aligns with your vision and mission. Get in touch to discuss further!

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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How to Set, Track, and Achieve Business Objectives with 60 Examples

By Kate Eby | April 10, 2023

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Businesses that set objectives make better decisions. Business objectives allow companies to focus their efforts, track progress, and visualize future success. We’ve worked with experts to create the most comprehensive guide to business objectives.

Included in this article, you’ll find the differences between business objectives and business goals , the four main business objectives , and the benefits of setting business objectives . Plus, find 60 examples of business objectives , which you can download in Microsoft Word.

What Is a Business Objective?

A business objective is a specific, measurable outcome that a company works to achieve. Company leaders set business objectives that help the organization meet its long-term goals. Business objectives should be recorded so that teams can easily access them. 

Business objectives cover many different factors of a company’s success, such as financial health, operations, productivity, and growth. 

One easy way to make sure that you are setting the right business objectives is to follow the SMART goal framework . SMART objectives are specific, measurable, achievable, relevant, and time-bound. 

To learn about setting project objectives using the SMART framework, see this comprehensive guide to writing SMART project objectives .

Business Objectives vs. Business Goal

A business goal is a broad, long-term outcome that a company works toward. Goals usually inform which strategies that department leaders will implement. A business objective , however, is a specific, short-term outcome or action that helps the company achieve long-term goals.

Although the terms are often used interchangeably, goals and objectives are not the same . In general, goals are broad in scope and describe an outcome, while objectives are narrow in scope and describe a specific action or step. 

While these differences are important to understand, many of the common frameworks for successful goal-setting — such as SMART, objectives and key results ( OKRs ), and management by objectives (MBO) — can be useful when writing business objectives. 

When deciding on objectives for a team or department, keep in mind the overarching goals of a business. Each objective should move the company closer to its long-term goals.

Project Goals and Objectives Template

Download the Project Goals and Objectives Template for Excel | Microsoft Word | Adobe PDF

Use this free, printable template to learn how to break down project goals into individual objectives using the SMART framework. Write the primary goal at the top of the worksheet, then follow the SMART process to create one or more specific objectives that will help you achieve that goal. 

For resources to help with setting and tracking goals at your company, see this all-inclusive list of goal tracking and setting templates .

What Are the Four Main Business Objectives?

The four main business objectives are economic, social, human, and organic. Each can help a business ensure their prolonged health and growth. For example, human objectives refer to employees’ well-being, while economic objectives refer to the company’s financial health. 

These are the four main business objectives:

• Example: Reduce spending on paid advertisements by 20 percent.
• Example: Reduce average customer wait times from eight minutes to four minutes. 
• Example: Hire two new chemical engineers by the end of Q2.
• Example: Improve the efficiency of a specific software product by 15 percent.

Types of Business Objectives

There are many types of business objectives beyond the main four. These range from regulation objectives to environmental objectives to municipal objectives. For example, a global objective might be to distribute a product to a new country. 

In addition to economic, social, human, and organic objectives, here are some other types of business objectives companies might set: 

• Regulatory: These objectives relate to compliance requirements, such as meeting quality standards or conducting internal audits.
• National: These objectives relate to a company’s place in and how they contribute to the country they operate in, such as promoting social justice causes and creating employment opportunities. 
• Global: These objectives relate to a company’s place in and its contribution to many countries, such as improving living standards and responding to global demands for products and services. 
• Environmental: These objectives relate to a company’s environmental impact, such as reducing chemical waste or making eco-friendly investments. 
• Healthcare: These objectives relate to the health and well-being of a population, whether within or outside an organization. These objectives might be improving healthcare benefit options for employees or refining a drug so that it has fewer side effects.

The Importance of Having Business Objectives

Teams need business objectives to stay focused on the company’s long-term goals. Business objectives help individual employees understand how their roles contribute to the larger mission of the organization. Setting business objectives facilitates effective planning. 

Here are some benefits to setting business objectives:

• Develops Leadership: Company leaders are more effective when they have a clear vision and can delegate tasks to make it a reality. Setting objectives is a great way to improve one’s leadership skills.
• Increases Motivation: People tend to be more invested in work when they have clear, attainable objectives to achieve. Plus, each completed objective provides a morale boost to keep teams happy and productive. 
• Encourages Innovation and Productivity: With increased motivation and workplace satisfaction come more innovations. Set attainable but challenging objectives, and watch teams come up with creative solutions to get things done.
• Improves Strategy: Setting objectives that align with overarching company goals means that everyone across the company can stay aligned on strategic implementation. 
• Enhances Customer Satisfaction: Overall customer satisfaction is more likely to increase over time when measurable quality improvements are in place. 
• Improves Prioritization: When they are being able to see all of the current objectives, team members can more easily prioritize their work, which in turn makes their workloads feel more manageable. 
• Improves Financial Health: Setting economic objectives in particular can help companies stay on top of their financial goals.

60 Examples of Business Objectives

Company leaders can use business objectives to improve every facet of an organization, from customer satisfaction to market share to employee well-being. Here are 60 examples of business objectives that can help a company achieve its goals. 

Economic Business Objectives

• Increase profit margins by 5 percent by the end of the Q4. 
• Recover 50 percent of total outstanding debts from each quarter the following quarter for the next year. 
• “Increase revenue by 10 percent each year for the next five years,” suggests Tyler. 
• Offer three new holiday sales events in the coming year. 
• Move 30 percent of surplus stock by the end of Q2.
• “Reduce costs by 10 percent each year for the next five years,” suggests Tyler.
• Reduce monthly interest payments by 1.5 percent by consolidating debt. 
• Introduce a new credit payment option to expand the potential customer base. 
• Apply for six government grants by the end of the year. 
•  Hire an accountant to track expenses and file the company’s taxes. 
•  Secure a $100,000 loan to start a business.
•  Pitch your business ideas to a venture capital firm. 
• Improve your business credit score from 75 to 85 in two years. 
• Invest in solar panels for your company headquarters to reduce building energy costs by 75 percent. 
• Establish a monthly practice to analyze your cash flow statement.

Social Business Objectives

• Decrease customer average customer wait times by 20 percent in two months.
• Improve the average customer service satisfaction rating from 3.2/5 to 3.8/5 in six months through targeting trainings. 
• Hire a contract UX designer to redesign the company website interface in four months. 
• Decrease customer churn by 15 percent in one year. 
• “Triple the customer base within two years,” suggests Tyler.
• Offer 20 percent more customer discounts and specials over the course of two years. 
• Increase market share by 5 percent in three years. 
• Increase monthly sales quotas for sales associates by 10 percent. 
• Develop a sales incentive program to reward top-performing sales associates with vacations, bonuses, and other prizes. 
• Donate $10,000 to local causes, such as public school funds or local charities. 
• Partner with a charitable organization to host a company-wide 5K.
• Increase your marketing budget by 15 percent.
• Hire a new marketing director by the end of Q3.
• Donate 40 percent of surplus stock to a relevant charity. 
• Increase engagement across all social media platforms by 10 percent with a multiplatform ad campaign.

Human Business Objectives

• Hire three new employees by the end of Q1.
• Hire a contractor to train your IT team on new software. 
• Rewrite and distribute your company values statement. 
• Conduct a quarterly, company-wide productivity training over the next two years. 
• Establish a diversity, equity, and inclusion (DEI) committee. 
• Design and implement a mentorship program for diverse employees. 
• Create an incentive program that grants additional vacation days for all employees when company-wide productivity goals are met. 
• Offer a free monthly happy hour to improve the employee experience. 
• Select change leaders across multiple teams to provide support for a corporate reorg.
• Start three employee resource groups (ERGs) within the next six months. 
• Diversify websites and career fairs where the hiring team recruits applicants to encourage a more diverse pool of candidates for new jobs. 
• Invest in an office redesign that improves the office atmosphere and provides more in-office resources, such as free coffee and snacks, to on-site employees. 
• Upgrade employee laptops to improve productivity and employee satisfaction. 
• Conduct a yearly, comprehensive employee experience survey to identify areas of improvement. 
• Throw office parties to celebrate change milestones. 

Organic Business Objectives

• Increase the top line by 15 percent every year for the next five years.
• Achieve 20 percent net profit from 10 product enhancements in the next two years.
• Decrease raw materials costs by 10 percent by the end of the year.
• Reduce downtime by 25 percent by the end of the year.
• Within two years, attain a rate of 25 percent new revenue from products released within the last year.
• Improve customer acquisition ration by 10 percent every quarter for the next two years. 
• Reduce total inventory levels by 20 percent over four months.
• Interact with at least 20 Instagram users every month for one year.
• Have a new product launch covered by at least three reputable industry publications within two months of the launch date.
• Grow both the top line and the bottom line by 60 percent every year for three years. 
• Reduce product defects by 15 percent every year for four years.
• Increase on-time delivery dates for top customers by 25 percent over the span of three quarters.
• Conduct yearly workplace safety reviews.
• Decrease average customer wait times for responses to social media queries from 45 minutes to 15 minutes by the end of Q4.
• Improve your company website to be on the first page of search results within six months.

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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.

Business growth

Business tips

Business objectives: How to set them (with 5 examples and a template)

As anyone who played rec league sports in the '90s might remember, being on a team for some reason required you to sell knockoff candy bars to raise funds. Every season, my biggest customer was always me. Some kids went door-to-door, some set up outside local businesses, some sent boxes to their parents' jobs—I just used my allowance to buy a few for myself.

Aside from initiative, what my approach lacked was a plan, a goal, and accountability. A lot to ask of an unmotivated nine-year-old, I know, but 100% required for anyone who runs an actual business.

Business objectives help companies avoid my pitfalls by laying the groundwork for all the above so they can pursue achievable growth.

Table of contents:

What are business objectives?

What you want the company to achieve

How you can measure success

Which players are involved in driving success

The timelines needed to plan, initiate, and implement steps

How, if successful, these actions can be integrated sustainably going forward

Business objectives vs. goals

Here's what that breakdown could have looked like for nine-year-old me selling candy for my little league team: 

Business objective: I will increase my sales output by learning and implementing point-of-sale conversion frameworks. I'll measure success by comparing week-over-week sales growth to median sales across players on my baseball team.

Business goal: I will sell more candy bars than anyone on my team and earn the grand prize: a team party at Pizza Hut.

The benefits of setting business objectives

You might think it's good enough to continue working status quo toward your goals, but as the cliche goes, good enough usually isn't. Establishing and following defined, actionable steps through business objectives can:

Help establish clear roadmaps: You can translate your objectives into time-sensitive sequences to chart your path toward growth.

Set groundwork for culture: Clear objectives should reflect the culture you envision, and, in turn, they should help guide your team to foster it.

Influence talent acquisition: Once you know your objectives, you can use them to find the people with the specific skills and experiences needed to actualize them.

Encourage teamwork: People work together better when they know what they're working toward.

Establish accountability: By measuring progress, you can see where errors and inefficiencies come from.

Drive productivity: The endgame of an objective is to make individual team members and processes more effective.

How to set business objectives

Setting business objectives takes a thoughtful, top-to-bottom approach. At every level of your business—whether you're a massive candy corporation or one kid selling chocolate almond bars door-to-door—there are improvements to make, steps to take, and players with stakes (or in my case, bats) in the game.

1. Establish clear goals

You can't hit a home run without a fence, and you can't reach a goal without setting it. Before you start brainstorming your objectives, you need to know what your objectives will help you work toward.

Increase total revenue by 25% over the next two years

Reduce production costs by 10% by the end of the year

Provide health insurance for employees by next fiscal year

Grow design department to 10+ employees this year

Reach 100k Instagram followers ahead of new product launch

Implement full rebrand before new partnership announcement

Once you have these goals in place, you can establish individual objectives that position your company to reach them.

2. Set a baseline

Like a field manager before a game, you've got to set your baselines. (Very niche pun, I know.) With a definite goal in mind, the only way to know your progress is to know where you're starting from. 

Analyzing your baselines could also help you recalibrate your goals. You may have decided abstractly that you want conversion rates to double in six months, but is that really possible? If your measurables show there's potentially a heavier lift involved than you expected, you can always roll back the goal performance or expand the timeline.

3. Involve players at all levels in the conversation

Too often, the most important people are left out of conversations about goals and objectives. The more levels of complexity and oversight, the more important it is to hear from everyone—yet the more likely it is that some will be excluded.

Let's say you want to reduce overhead by 5% over the next two years for your sporting goods manufacturing outfit. At a high level, your team finds you can reduce production costs by using cheaper materials for baseball gloves. A member of your sales team points out that the reduction in quality, which your brand is famous for, could lead to losses that offset those savings. Meanwhile, a factory representative points out that replacing outdated machines would be expensive initially but would increase efficiency, reduce defects, and cut maintenance costs, breaking even in four years.

By involving various teams at multiple levels, you find it's worth it to extend timelines from two to four years. Your overhead reduction may be lower than 5% by year two but should be much higher than that by year four based on these changes.

The takeaway from this pretty crude example is that it's helpful to make sure every team that touches anything related to your objective gets consulted. They should give valuable, practical input thanks to their boots- (or cleats-) on-the-ground experience.

4. Define measurable outcomes

An objective should be exactly that. Using KPIs (key performance indicators) to apply a level of objectivity to your action steps allows you to measure their progress and success over time and either adapt as you go along or stay the course.

How do you know if your specific objectives are leading to increased web traffic, or if that's just natural (or even incidental) growth? How do you know if your recruiting efforts lead to better candidates, or whether your employees are actually more satisfied? Here are a few examples of measurable outcomes to show proof:

Percentage change (15% overall increase in revenue)

Goal number (10,000 subscribers)

Success range (five to 10 new clients)

Clear change (new company name)

Executable action (weekly newsletter launch)

5. Outline a roadmap with a schedule

You've got your organizational goals defined, logged your baselines, sourced objectives from across your company, and know your metrics for defining success. Now it's time to set an actionable plan you can execute.

Your objectives roadmap should include all involved team members and departments and clear timelines for reaching milestones. Within your objectives, set action items with deadlines to stay on track, along with corresponding progress markers. For the objective of "increase lead conversion efficiency by 10%," that could look like:

May 15: Begin time logging 

June 1: Register team members for productivity seminar

June 15: Integrate Trello for managing processes

June 15: Audit time log

August 1: Audit time log—goal efficiency increase of 5%

6. Integrate successful changes

You've successfully achieved your objectives—great! But as Yogi Berra famously said, "It ain't over till it's over," and it ain't over yet. 

Don't let this win be a one-off accomplishment. Berra also said "You can observe a lot by just watching," and applying what you observed from this process will help you continue growing your company. Take what worked, and integrate it into your business processes for sustainable improvement. Then create new objectives, so you can continue the cycle.

Examples of business objectives and goals

Business objectives aren't collated plans or complicated flowcharts—they're short, impactful statements that are easy to memorize and communicate. There are four basic components every business objective should have: 

A growth-oriented intention (improve efficiency)

One or more actions (implement monthly training sessions)

A measurement for success (20% increase)

A timeline to reach success (by end of year)

Our SaaS product's implementation team will grow to five during the next fiscal year. This will require us to submit a budget proposal by the end of the quarter and look into restructured growth tracks, new job posting templates, and revised role descriptions by the start of next fiscal year.

We will increase customer satisfaction for our mobile app product demonstrably by the end of the year by integrating a new AI chatbot feature. To measure the change in customer satisfaction, we will monitor ratings in the app store, specifically looking for decreases in rates of negative reviews by 5%-10%  as well as increases in overall positive reviews by 5%-10%.

Each of our water filtration systems will achieve NSF certification ahead of the launch of our rebranding campaign. Our product team will establish a checklist of changes necessary for meeting certification requirements and communicate timelines to the marketing team.

HR will implement bi-annual performance reviews starting next year. Review timelines will be built into scheduling software, and HR will automate email reminders to managers to communicate to their teams.

Business objective template

Business objectives can be as simple as one action or as complex as a multi-year roadmap—but they should be able to fall into a clear, actionable framework.

Tips for achieving business objectives

Calling your shot to the left centerfield wall and hitting a ball over that wall are two different things—the same goes for setting an objective and actualizing it.

Start with clear, attainable goals: Objectives should position your business to reach broader growth goals, so start by establishing those.

Align decisions with objectives: Once you set objectives, they should inform other decisions. Decision-makers should think about how changes they make along the way affect their objectives' timelines and execution.

Listen to team members at all levels: Those most affected by organizational changes can be the ones with the least say in the matter. Great ideas and insights can come from any level—even if they're only tangentially related to an outcome.

What makes business objectives so useful is that they can help you build a plan with defined steps to reach obtainable growth goals. As (one more time) Yogi Berra also once said, "You've got to be very careful if you don't know where you are going, because you might not get there." 

As you outline your objectives, here are some guides that can help you find KPIs and improvement opportunities:

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Bryce Emley

Currently based in Albuquerque, NM, Bryce Emley holds an MFA in Creative Writing from NC State and nearly a decade of writing and editing experience. His work has been published in magazines including The Atlantic, Boston Review, Salon, and Modern Farmer and has received a regional Emmy and awards from venues including Narrative, Wesleyan University, the Edward F. Albee Foundation, and the Pablo Neruda Prize. When he isn’t writing content, poetry, or creative nonfiction, he enjoys traveling, baking, playing music, reliving his barista days in his own kitchen, camping, and being bad at carpentry.

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Setting Business Goals & Objectives: 4 Considerations

• 31 Oct 2023

Setting business goals and objectives is important to your company’s success. They create a roadmap to help you identify and manage risk , gain employee buy-in, boost team performance , and execute strategy . They’re also an excellent marker to measure your business’s performance.

Yet, meeting those goals can be difficult. According to an Economist study , 90 percent of senior executives from companies with annual revenues of one billion dollars or more admitted they failed to reach all their strategic goals because of poor implementation. In order to execute strategy, it’s important to first understand what’s attainable when developing organizational goals and objectives.

If you’re struggling to establish realistic benchmarks for your business, here’s an overview of what business goals and objectives are, how to set them, and what you should consider during the process.

Access your free e-book today.

What Are Business Goals and Objectives?

Business objectives dictate how your company plans to achieve its goals and address the business’s strengths, weaknesses, and opportunities. While your business goals may shift, your objectives won’t until there’s an organizational change .

Business goals describe where your company wants to end up and define your business strategy’s expected achievements.

According to the Harvard Business School Online course Strategy Execution , there are different types of strategic goals . Some may even push you and your team out of your comfort zone, yet are important to implement.

For example, David Rodriguez, global chief human resources officer at Marriott, describes in Strategy Execution the importance of stretch goals and “pushing people to not accept today's level of success as a final destination but as a starting point for what might be possible in the future.”

It’s important to strike a balance between bold and unrealistic, however. To do this, you must understand how to responsibly set your business goals and objectives.

Related: A Manager’s Guide To Successful Strategy Implementation

How to Set Business Goals and Objectives

While setting your company’s business goals and objectives might seem like a simple task, it’s important to remember that these goals shouldn’t be based solely on what you hope to achieve. There should be a correlation between your company’s key performance indicators (KPIs)—quantifiable success measures—and your business strategy to justify why the goal should, and needs to, be achieved.

This is often illustrated through a strategy map —an illustration of the cause-and-effect relationships that underpin your strategy. This valuable tool can help you identify and align your business goals and objectives.

“A strategy map gives everyone in your business a road map to understand the relationship between goals and measures and how they build on each other to create value,” says HBS Professor Robert Simons in Strategy Execution .

While this roadmap can be incredibly helpful in creating the right business goals and objectives, a balanced scorecard —a tool to help you track and assess non-financial measures—ensures they’re achievable through your current business strategy.

“Ask yourself, if I picked up a scorecard and examined the measures on that scorecard, could I infer what the business's strategy was,” Simon says. “If you've designed measures well, the answer should be yes.”

According to Strategy Execution , these measures are necessary to ensure your performance goals are achieved. When used in tandem, a balanced scorecard and strategy map can also tell you whether your goals and objectives will create value for you and your customers.

“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” Simons says.

These four perspectives are key considerations when setting your business goals and objectives. Here’s an overview of what those perspectives are and how they can help you set the right goals for your business.

4 Things to Consider When Setting Business Goals and Objectives

1. financial measures.

It’s important to ensure your plans and processes lead to desired levels of economic value. Therefore, some of your business goals and objectives should be financial.

Some examples of financial performance goals include:

• Cutting costs
• Increasing revenue
• Improving cash flow management

“Businesses set financial goals by building profit plans—one of the primary diagnostic control systems managers use to execute strategy,” Simons says in Strategy Execution . “They’re budgets drawn up for business units that have both revenues and expenses, and summarize the anticipated revenue inflows and expense outflows for a specified accounting period.”

Profit plans are essential when setting your business goals and objectives because they provide a critical link between your business strategy and economic value creation.

According to Simons, it’s important to ask three questions when profit planning:

• Does my business strategy generate enough profit to cover costs and reinvest in the business?
• Does my business generate enough cash to remain solvent through the year?
• Does my business create sufficient financial returns for investors?

By mapping out monetary value, you can weigh the cost of different strategies and how likely it is you’ll meet your company and investors’ financial expectations.

2. Customer Satisfaction

To ensure your business goals and objectives aid in your company’s long-term success, you need to think critically about your customers’ satisfaction. This is especially important in a world where customer reviews and testimonials are crucial to your organization’s success.

“Everything that's important to the business, we have a KPI and we measure it,” says Tom Siebel, founder, chairman, and CEO of C3.ai, in Strategy Execution . “And what could be more important than customer satisfaction?”

Unlike your company’s reputation, measuring customer satisfaction has a far more personal touch in identifying what customers love and how to capitalize on it through future strategic initiatives .

“We do anonymous customer satisfaction surveys every quarter to see how we're measuring up to our customer expectations,” Siebel says.

While this is one example, your customer satisfaction measures should reflect your desired market position and focus on creating additional value for your audience.

Related: 3 Effective Methods for Assessing Customer Needs

3. Internal Business Processes

Internal business processes is another perspective that should factor into your goal setting. It refers to several aspects of your business that aren’t directly affected by outside forces. Since many goals and objectives are driven by factors such as business competition and market shifts, considering internal processes can create a balanced business strategy.

“Our goals are balanced to make sure we’re holistically managing the business from a financial performance, quality assurance, innovation, and human talent perspective,” says Tom Polen, CEO and president of Becton Dickinson, in Strategy Execution .

According to Strategy Execution , internal business operations are broken down into the following processes:

• Operations management
• Customer management

While improvements to internal processes aren’t driven by economic value, these types of goals can still reap a positive return on investment.

“We end up spending much more time on internal business process goals versus financial goals,” Polen says. “Because if we take care of them, the financial goals will follow at the end of the day.”

4. Learning and Growth Opportunities

Another consideration while setting business goals and objectives is learning and growth opportunities for your team. These are designed to increase employee satisfaction and productivity.

According to Strategy Execution , learning and growth opportunities touch on three types of capital:

• Human: Your employees and the skills and knowledge required for them to meet your company’s goals
• Information: The databases, networks, and IT systems needed to support your long-term growth
• Organization: Ensuring your company’s leadership and culture provide people with purpose and clear objectives

Employee development is a common focus for learning and growth goals. Through professional development opportunities , your team will build valuable business skills and feel empowered to take more risks and innovate.

To create a culture of innovation , it’s important to ensure there’s a safe space for your team to make mistakes—and even fail.

“We ask that people learn from their mistakes,” Rodriguez says in Strategy Execution . “It's really important to us that people feel it’s safe to try new things. And all we ask is people extract their learnings and apply it to the next situation.”

Achieve Your Business Goals

Business goals aren’t all about your organization’s possible successes. It’s also about your potential failures.

“When we set goals, we like to imagine a bright future with our business succeeding,” Simons says in Strategy Execution . “But to identify your critical performance variables, you need to engage in an uncomfortable exercise and consider what can cause your strategy to fail.”

Anticipating potential failures isn’t easy. Enrolling in an online course—like HBS Online’s Strategy Execution —can immerse you in real-world case studies of past strategy successes and failures to help you better understand where these companies went wrong and how to avoid it in your business.

Do you need help setting your business goals and objectives? Explore Strategy Execution —one of our online strategy courses —and download our free strategy e-book to gain the insights to create a successful strategy.

About the Author

How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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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.

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

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

Business Plan Template [ Download Now ]

Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

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Free Business Plan [Template]

Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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How To Write a Business Plan

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Starting a business is a wild ride, and a solid business plan can be the key to keeping you on track. A business plan is essentially a roadmap for your business — outlining your goals, strategies, market analysis and financial projections. Not only will it guide your decision-making, a business plan can help you secure funding with a loan or from investors .

Writing a business plan can seem like a huge task, but taking it one step at a time can break the plan down into manageable milestones. Here is our step-by-step guide on how to write a business plan.

Table of contents

• Write your executive summary
• Do your market research homework
• Set your business goals and objectives
• Plan your business strategy
• Describe your product or service
• Crunch the numbers
• Finalize your business plan

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Step 1: Write your executive summary

Though this will be the first page of your business plan , we recommend you actually write the executive summary last. That’s because an executive summary highlights what’s to come in the business plan but in a more condensed fashion.

An executive summary gives stakeholders who are reading your business plan the key points quickly without having to comb through pages and pages. Be sure to cover each successive point in a concise manner, and include as much data as necessary to support your claims.

You’ll cover other things too, but answer these basic questions in your executive summary:

• Idea: What’s your business concept? What problem does your business solve? What are your business goals?
• Product: What’s your product/service and how is it different?
• Market: Who’s your audience? How will you reach customers?
• Finance: How much will your idea cost? And if you’re seeking funding, how much money do you need? How much do you expect to earn? If you’ve already started, where is your revenue at now?

Step 2: Do your market research homework

The next step in writing a business plan is to conduct market research . This involves gathering information about your target market (or customer persona), your competition, and the industry as a whole. You can use a variety of research methods such as surveys, focus groups, and online research to gather this information. Your method may be formal or more casual, just make sure that you’re getting good data back.

This research will help you to understand the needs of your target market and the potential demand for your product or service—essential aspects of starting and growing a successful business.

Step 3: Set your business goals and objectives

Once you’ve completed your market research, you can begin to define your business goals and objectives. What is the problem you want to solve? What’s your vision for the future? Where do you want to be in a year from now?

Use this step to decide what you want to achieve with your business, both in the short and long term. Try to set SMART goals—specific, measurable, achievable, relevant, and time-bound benchmarks—that will help you to stay focused and motivated as you build your business.

Step 4: Plan your business strategy

Your business strategy is how you plan to reach your goals and objectives. This includes details on positioning your product or service, marketing and sales strategies, operational plans, and the organizational structure of your small business.

Make sure to include key roles and responsibilities for each team member if you’re in a business entity with multiple people.

Step 5: Describe your product or service

In this section, get into the nitty-gritty of your product or service. Go into depth regarding the features, benefits, target market, and any patents or proprietary tech you have. Make sure to paint a clear picture of what sets your product apart from the competition—and don’t forget to highlight any customer benefits.

Step 6: Crunch the numbers

Financial analysis is an essential part of your business plan. If you’re already in business that includes your profit and loss statement , cash flow statement and balance sheet .

These financial projections will give investors and lenders an understanding of the financial health of your business and the potential return on investment.

You may want to work with a financial professional to ensure your financial projections are realistic and accurate.

Step 7: Finalize your business plan

Once you’ve completed everything, it's time to finalize your business plan. This involves reviewing and editing your plan to ensure that it is clear, concise, and easy to understand.

You should also have someone else review your plan to get a fresh perspective and identify any areas that may need improvement. You could even work with a free SCORE mentor on your business plan or use a SCORE business plan template for more detailed guidance.

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The takeaway

Writing a business plan is an essential process for any forward-thinking entrepreneur or business owner. A business plan requires a lot of up-front research, planning, and attention to detail, but it’s worthwhile. Creating a comprehensive business plan can help you achieve your business goals and secure the funding you need.

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• 22 types of business objectives to meas ...

22 types of business objectives to measure success

Clear business objectives help you achieve your mission statement and long-term company vision. These objectives can range from financial objectives to organization specific objectives. Take a look at 22 types of business objectives you can set—plus, learn when to use business objectives vs. 14 other goal frameworks. 

Whether you work at a small business, a start up, or as a team lead at a larger enterprise, as a key business owner, you’re responsible for identifying the business objectives that will help your organization hit its long-term goals. Setting goals and strategic objectives is the best way to know where you’re going and how to get there. 

In this article, learn about 22 different types of business objectives and how to make them achievable. Then, take a look at the 15 different types of goals you can set, depending on why you’re setting those goals.

What is a business objective? 

Business objectives are the results you are aiming to achieve in order to accomplish your longer-term company vision. Think of business objectives as metrics to measure your overall business success.

Hitting your business objectives means you’re on the path towards achieving larger company goals. As such, business objectives should focus on large-scale organizational impact. Good business objectives are measurable, specific, and time-bound. 

22 types of business objectives

Set business objectives based on factors that measure and impact your organization’s success. For example, you might set the following business objectives:

Financial business objectives

1. Profitability: A profitability-focused business objective is important if your company is relying on outside investors. Achieving—and maintaining—profitability ensures your long-term success so you can make progress towards your overall company mission. 

2. Revenue: Revenue-focused business objectives help you balance your income with your costs in order to stay in business. You might set business objectives to achieve a certain annual revenue goal, or to increase revenue by a certain percentage over a period of time. 

3. Costs: Costs refer to how much money you’re spending on your business. Reducing costs can help you increase revenue and achieve profitability. Business objectives related to cost can help you control production or operations cost to improve your business’s financial performance. 

4. Cash flow: Cash flow refers to the money moving into and out of your business. Cash flow can be positive—when you’re making more than you’re spending—or negative—when you’re spending more than you’re making. Similar to profitability, a cash flow-oriented business objective can help set you up for long term financial success. 

5. Sustainable growth: In order to grow as a business, you need to grow sustainably. Setting business objectives around sustainable growth can help you plan your financial projections, employee costs, and other financial considerations. 

Customer-centric business objectives

6. Competitive positioning: A big element of your business strategy is thinking about how your product or service compares to others in the same market. By setting a business objective focused on competitive positioning, you can ensure your product or service reaches parity with what’s expected in the market, or use competitive positioning to outdo your competitors in a key area. 

8. Customer satisfaction: In order to succeed as a business, you need happy customers. Focusing on a customer satisfaction-based business objective can help you better serve your customers. Depending on the business objective, this might focus on a customer advocacy program, a better help desk, or something similarly customer-facing. 

9. Brand awareness: Your brand is what makes your organization stand out from the crowd. Brand awareness is an important way to understand how your customers think of your brand, and how aware they are of your distinct brand vs. your competitors. Understanding—and increasing—brand awareness is a key part of your long-term marketing strategy .

10. Sales: You’ll often find business objectives related to improving or refining the sales cycle. This could include anything from reducing customer acquisition cost (CAC), developing better lead tracking, increasing cross-selling, or something else.

11. Churn: In business, your churn rate refers to how many customers you lose over a set period of time. Reducing churn is a great way to increase your revenue and ensure your customers are satisfied with the product or service you provide. 

Internal business objectives

12. Employee satisfaction and engagement: Part of your business is how your employees feel about working there, too. Increasing employee satisfaction and engagement leads to happier employees, reduced burnout , and more effective teams. 

13. Employee retention: A key internal business objective is how long your employees spend at your company. Increasing tenure and reducing turnover can help you achieve more complex projects with knowledgeable employees. 

14. Company growth: In order to grow your business, you also need to grow the number of people you employ. Growing your company sustainably can be difficult—which is why businesses often set company growth as a key business objective. 

15. Organizational culture: Organizational culture is the ideals, values, and group norms that shape how team members interact within your company. Good culture drives employee engagement and increases retention, which is one of the key reasons so many companies set organizational culture-focused business objectives. 

16. Change management: Smoothly implement large-scale organizational change with change management . Though you typically won’t see organizations set this type of business objective year after year, it can be a helpful objective to set if you have large changes on the horizon. 

17. Productivity: At Asana, we don’t think of productivity as “doing the most you can,” but rather as a way to optimize your time and get your best work done. Increasing employee productivity can help your teams achieve their high-impact work more efficiently. 

18. Employee effectiveness: Teams don’t just need to be efficient—they also need to know the right things to work on. The best companies aim for efficiency and effectiveness—which is where an effectiveness-based business objective comes into play. To learn more, read our article about the difference between efficiency and effectiveness . 

19. Diversity and inclusion: A big part of a welcoming company culture is making sure your employees feel like they belong. Investing in diversity and inclusion programs can help your business be more welcoming to your current and potential employees. 

Regulation related business objectives

20. Quality control: Implementing quality control measures as a business objective can help you ensure your product or services are at the level you want them to be. This in turn leads to better customer relationships and overall increase in revenue. 

21. Compliance: If your business has any compliance needs to meet in the near future, setting those compliance requirements as a business objective will ensure you hit your targets on time. 

22. Sustainability or waste reduction: Some businesses set business objectives to reduce waste or increase sustainability. While this may not directly impact your business, proving that you’re environmentally minded can help you reach specific audiences you’re targeting. 

Which goal framework is right for you?

Figuring out exactly what type of goal you need to set can be tricky. Each goal framework is slightly different—and implementing the right one can help you achieve success. 

The type of goal you set will depend on the business activities you’re running and the specific goals you have. If your goals have a set time frame, you may want to go with short-term objectives, whereas larger goals have their own unique frameworks. 

If you’re not sure where to start, check out these 15 goal frameworks for different situations: 

1. Business objectives: Set goals based on operating factors that impact your company’s long-term success.

2. Business plan : Also called a business strategy plan. Document your business’ goals and plan out how you’ll get there.

3. Vision statement : Set an organization-wide North Star.

4. Big Hairy Audacious Goals (BHAGs) : Set organization-sized stretch goals .

5. Company values : Align your team around core principles. 

6. Strategic plan : Clarify your three to five year company goals during the strategic planning process. 

7. Strategic goal : Set the goals you want to achieve by the end of your strategic plan.

8. Critical success factors : Clarify the high-level goals you need to achieve in order to achieve your strategic goals. 

9. Strategic management : Execute against your strategic plan in order to achieve your company goals. 

10. Business goals : Set predetermined targets to achieve in a set period of time.  

11. Objectives and key results (OKRs) : Set and communicate annual company goals.

12. Key performance indicators (KPIs) : Set quantitative goals.

13. Project objectives : Share what you want to achieve by the end of a project.

14. Project deliverables : Identify a project’s output.

15. Project milestones : Mark specific checkpoints along a project’s timeline.

More goal setting resources

Clear goals are critical to keep your organization functioning. In addition to business objectives, check out our goal setting resource hub for tips on setting goals and achieving high-impact results. Then when you’re ready, get started with Asana for goal tracking. With Asana , you can connect your company goals to the work that supports them—all in one place. 

Related resources

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What are objectives and key results (OKRs)?

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

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

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

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

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

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

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

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Plan Your Business Plan Before you put pen to paper, find out how to assess your business's goals and objectives.

You've decided to write a business plan, and you're ready to get started. Congratulations. You've just greatly increased the chances that your business venture will succeed. But before you start drafting your plan, you need to--you guessed it--plan your draft.

One of the most important reasons to plan your plan is that you may be held accountable for the projections and proposals it contains. That's especially true if you use your plan to raise money to finance your company. Let's say you forecast opening four new locations in the second year of your retail operation. An investor may have a beef if, due to circumstances you could have foreseen, you only open two. A business plan can take on a life of its own, so thinking a little about what you want to include in your plan is no more than common prudence.

Second, as you'll soon learn if you haven't already, business plans can be complicated documents. As you draft your plan, you'll be making lots of decisions on serious matters, such as what strategy you'll pursue, as well as less important ones, like what color paper to print it on. Thinking about these decisions in advance is an important way to minimize the time you spend planning your business and maximize the time you spend generating income.

To sum up, planning your plan will help control your degree of accountability and reduce time-wasting indecision. To plan your plan, you'll first need to decide what your goals and objectives in business are. As part of that, you'll assess the business you've chosen to start, or are already running, to see what the chances are that it will actually achieve those ends. Finally, you'll take a look at common elements of most plans to get an idea of which ones you want to include and how each will be treated.

Determine Your Objectives Close your eyes. Imagine that the date is five years from now. Where do you want to be? Will you be running a business that hasn't increased significantly in size? Will you command a rapidly growing empire? Will you have already cashed out and be relaxing on a beach somewhere, enjoying your hard-won gains?

Answering these questions is an important part of building a successful business plan. In fact, without knowing where you're going, it's not really possible to plan at all.

Now is a good time to free-associate a little bit--to let your mind roam, exploring every avenue that you'd like your business to go down. Try writing a personal essay on your business goals. It could take the form of a letter to yourself, written from five years in the future, describing all you have accomplished and how it came about.

As you read such a document, you may make a surprising discovery, such as that you don't really want to own a large, fast-growing enterprise but would be content with a stable small business. Even if you don't learn anything new, though, getting a firm handle on your goals and objectives is a big help in deciding how you'll plan your business.

Goals and Objectives Checklist If you're having trouble deciding what your goals and objectives are, here are some questions to ask yourself:

• How determined am I to see this succeed?
• Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?
• What's going to happen to me if this venture doesn't work out?
• If it does succeed, how many employees will this company eventually have?
• What will be its annual revenues in a year? Five years?
• What will be its market share in that time frame?
• Will it be a niche marketer, or will it sell a broad spectrum of good and services?
• What are my plans for geographic expansion? Local? National? Global?
• Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?
• If I delegate, what sorts of tasks will I share? Sales? Technical? Others?
• How comfortable am I taking direction from others? Could I work with partners or investors who demand input into the company's management?
• Is it going to remain independent and privately owned, or will it eventually be acquired or go public?

Your Financing Goals

It doesn't necessarily take a lot of money to make a lot of money, but it does take some. That's especially true if, as part of examining your goals and objectives, you envision very rapid growth.

Energetic, optimistic entrepreneurs often tend to believe that sales growth will take care of everything, that they'll be able to fund their own growth by generating profits. However, this is rarely the case, for one simple reason: You usually have to pay your own suppliers before your customers pay you. This cash flow conundrum is the reason so many fast-growing companies have to seek bank financing or equity sales to finance their growth. They are literally growing faster than they can afford.

Start by asking yourself what kinds of financing you're likely to need--and what you'd be willing to accept. It's easy when you're short of cash, or expect to be short of cash, to take the attitude that almost any source of funding is just fine. But each kind of financing has different characteristics that you should take into consideration when planning your plan. These characteristics take three primary forms:

• First, there's the amount of control you'll have to surrender. An equal partner may, quite naturally, demand approximately equal control. Venture capitalists often demand significant input into management decisions by, for instance, placing one or more people on your board of directors. Angel investors may be very involved or not involved at all, depending on their personal style. Bankers, at the other end of the scale, are likely to offer no advice whatsoever as long as you make payments of principal and interest on time and are not in violation of any other terms of your loan.
• You should also consider the amount of money you're likely to need. Any amount less than several million dollars is too small to be considered for a standard initial public offering of stock, for example. Venture capital investors are most likely to invest amounts of $250,000 to $3 million. On the other hand, only the richest angel investor will be able to provide more than a few hundred thousand dollars, if that.

Almost any source of funds, from a bank to a factor, has some guidelines about the size of financing it prefers. Anticipating the size of your needs now will guide you in preparing your plan.

• The third consideration is cost. This can be measured in terms of interest rates and shares of ownership as well as in time, paperwork and plain old hassle.

How Will You Use Your Plan

Believe it or not, part of planning your plan is planning what you'll do with it. No, we haven't gone crazy--at least not yet. A business plan can be used for several things, from monitoring your company's progress toward goals to enticing key employees to join your firm. Deciding how you intend to use yours is an important part of preparing to write it.

Do you intend to use your plan to help you raise money? In that case, you'll have to focus very carefully on the executive summary, the management, and marketing and financial aspects. You'll need to have a clearly focused vision of how your company is going to make money. If you're looking for a bank loan, you'll need to stress your ability to generate sufficient cash flow to service loans. Equity investors, especially venture capitalists, must be shown how they can cash out of your company and generate a rate of return they'll find acceptable.

Do you intend to use your plan to attract talented employees? Then you'll want to emphasize such things as stock options and other aspects of compensation as well as location, work environment, corporate culture and opportunities for growth and advancement.

Do you anticipate showing your plan to suppliers to demonstrate that you're a worthy customer? A solid business plan may convince a supplier of some precious commodity to favor you over your rivals. It may also help you arrange supplier credit. You may want to stress your blue-ribbon customer list and spotless record of repaying trade debts in this plan.

Assessing Your Company's Potential

For most of us, unfortunately, our desires about where we would like to go aren't as important as our businesses' ability to take us there. Put another way, if you choose the wrong business, you're going nowhere.

Luckily, one of the most valuable uses of a business plan is to help you decide whether the venture you have your heart set on is really likely to fulfill your dreams. Many, many business ideas never make it past the planning stage because their would-be founders, as part of a logical and coherent planning process, test their assumptions and find them wanting.

Test your idea against at least two variables. First, financial, to make sure this business makes economic sense. Second, lifestyle, because who wants a successful business that they hate?

Answer the following questions to help you outline your company's potential. There are no wrong answers. The objective is simply to help you decide how well your proposed venture is likely to match up with your goals and objectives.

• What initial investment will the business require?
• How much control are you willing to relinquish to investors?
• When will the business turn a profit?
• When can investors, including you, expect a return on their money?
• What are the projected profits of the business over time?
• Will you be able to devote yourself full time to the business, financially?
• What kind of salary or profit distribution can you expect to take home?
• What are the chances the business will fail?
• What will happen if it does?
• Where are you going to live?
• What kind of work are you going to be doing?
• How many hours will you be working?
• Will you be able to take vacations?
• What happens if you get sick?
• Will you earn enough to maintain your lifestyle?
• Does your family understand and agree with the sacrifices you envision?

Sources: The Small Business Encyclopedia , Business Plans Made Easy, Start Your Own Business and Entrepreneur magazine.

Continue on to the next section of our Business Plan How-To >> Elements of a Business Plan

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

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9 Main Objectives of Business Plan

April 16, 2019 | By Hitesh Bhasin | Filed Under: Business

A recent study has shown that a vast majority of businesses fail due to the lack of a proper business plan. The business plan can you help arrive at the proper objectives for your business. Of course, having a complete overview of the business may be a difficult task, especially when you are still planning your business.

So what is a business plan and what objectives of an organization does it serve? We will attempt in helping you understand the concept better.

Table of Contents

What is a Business Plan?

Any business plan has two purposes to serve. To begin with, it helps you run your business with a cohesive vision based on where you would want to see the business in a year from now. It serves as a roadmap to achieve the business goals you have set for yourself.

Another purpose that you need to have a business plan is to show to the financial institutions and banks that you have access to the business roadmap. Banks want to make sure that you have a clear vision for developing your business ahead so that their risk factors are mitigated to a greater extent.

Objectives of Business Plan

The major objectives that a business Plan looks to achieve include the following elements.

1) Dedicating enough time for planning

A workable business plan cannot be created overnight. It is bound to take its own time to develop. So, a perfect business plan will attempt to spend enough time and hard work to achieve successful implementation. This should be one of the crucial stages in a business plan.

A complete analysis of the current situation is the key to evolving plans. Review the situation through brainstorming and other techniques to define the goals.

2) Create goals and objectives

An organization depends heavily on the business plan to arrive at the description of business it performs. There are several areas that a company will focus on if it wants to realize its objectives, understand the market that it is planned to operate in and the strategy to achieve the goals.

Lack of a business plan will leave the management without any means to check out the theories on how to operate the business. In essence, a business plan will help a company to test different methods in reaching the best standards and policies.

3) Evaluating performance

A business needs proper planning and control over the activities for enhanced performance. It will be an essential step towards achieving the long term survival of the organization as a whole. The business plan also comes with a financial part to it and used for comparing the actual performance with the estimated one.

The ability and provision for such a control and evaluation procedure are what offers you a great advantage in checking the success of the operations. This way, you will be able to detect issues like production or delivery delays, or even increasing production costs.

4) Gauging business strategy and applying due correction

A Business plan is what would assist you in assessing the efficiency of your strategies for achieving business goals. In an ideal condition, a business needs to have the planned results with which the actual results can be compared, and the way forward is decided.

If any of the strategies are found to be unsuccessful in achieving the relevant results, it may be a perfect idea to ditch the strategy or take corrective actions. It is wise to have a good business plan so that the management does have a reference with which it can have a healthy comparison of the actual result achieved.

5) Arranging financial resources

A business plan can be much helpful and instrumental in acquiring adequate business financing. Like we stated already, banks and lenders look for a proper business plan before lending you any sort of finance.

A business plan should be prepared in such a manner that the banks will have a clear understanding of the business perspective that the owner has. The lenders will be able to get to the root of the actual vision shared by the promoters and the methods of operation that will be employed.

Being financially viable is one of the prime objectives of a good business plan.

6) Stay consistent

This should be yet another objective that a business plan needs to be focussed with is being consistent. A good business plan should place proper value on the exact process and its adherence to the planned goals.

Sticking to a consistent schedule will work wonders in achieving the planned goals effectively. This will also help the employees and other staff to fall into a proper routine. This will help the concept of planning to be a part of your business culture .

7) Keep your goals ’SMART’

No, we are not referring to SMART as in the word intelligent. We mean your goals in the business plan should be S-M-A-R-R-T ( Specific, Measurable, Actionable, Realistic, and Time-Bound) to achieve success.

This will help you achieve the business goals as laid out in the business plan effectively and efficiently. It would be practical to have your team member analyze the goals set so that you will get back to a realistic approach.

8) Performing SWOT Analysis

SWOT Analysis is one of the best options you would want to go with when it comes to focus on an effective business plan. Having perfect knowledge of the strengths and weaknesses of your organization helps you come up with a better insight into the realistic goals.

The SWOT analysis also takes into account the opportunities and threats that the organization can come to face to face. This will assist you to focus on the positive factor and take corrective actions against the negatives.

9) Marketing Analysis

Marketing forms an integral part of a business and so does with the business plan. This part of the business plan should be focussed on determining the potential of your product or service while letting the business owners know more about future customers.

The marketing analysis part of the business plan should ideally provide you with a means of understanding your industry as a whole.

In Conclusion

In essence, a perfect business plan is what would help you configure your business in a more positive manner. It would help you foresee the unforeseen circumstances and take corrective action even before you face the situation in actual.

It takes into account the strategy on how to run the business along with the possible risk factors associated and the marketing avenues available in the long run.

Liked this post? Check out the complete series on Business

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About Hitesh Bhasin

Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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What Is The Objective Of A Business Plan?

Spontaneity is fun. But in the profit-driven world of big business, thorough planning just makes more sense. The Small Business Administration says 70% of start-ups are likely to fail within their first two years, and the reasons are too numerous to mention. One of the most significant factors of failure is a poorly constructed business plan -- or no plan at all.

While these documents are central to a business' success, many entrepreneurs are left scratching their heads, wondering what actually makes a good business plan.

At the core of a business plan

So much has been said about business plans, but they still remain widely misunderstood, often with unwelcome consequences. So, if you're just getting started, setting clear objectives is always the clearest path to a solid plan.

Keeping the focus

Perhaps the most overarching objective of a business plan is to provide a focus for your business. Write down product information, manpower requirements, financial projections and other details that characterize and set direction.

The Small Business Administration advises checking in with your business plan from time to time, and updating it whenever you make any changes. This can highlight how any adjustments can affect your business as a whole. Overall, the plan should remind you of your original goals for starting the business, any new goals you've established along the way and how these two influence your initial vision.

Testing strategies and evaluating performance

To get an accurate picture of strategy, you can compare actual and planned outcomes, and draw insights that help you make more confident business decisions moving forward. If some parts of the strategy have been unsuccessful, you might scrap them or modify them to perform better.

If a new product is currently underperforming, management may decide to improve it or repackage it. With a business plan, different theories can be tested, from financials and marketing to customer relations. Without the trail of a business plan, executives might make decisions based on speculations and assumptions, increasing their chances of failure.

Proper allocation of resources

One of the most important objectives of a business plan is to set the consensus on everything about the business -- vision and mission, goals, projections, strategies, processes, target markets, etc. Unless everyone is on the same page, the proper allocation of resources becomes difficult, thus stunting growth.

With a clear business plan, decision-makers can work in harmony without having to consult or check in with one another, saving everyone time while working toward mutual goals.

Securing financing

One very practical objective of a business plan is to build a case for financing. It's no secret that banks and other lenders ask for this vital document as part of their due diligence prior to granting loans.

With a plan in place, banks are able to explore a business' goals, ideals and methods of operation. All of these give clues to the company's comparative financial value. Needless to say, business plans form most of the foundation for loan providers to decide on approving or rejecting an application.

Providing motivation for growth

Starting a business can be intimidating, especially for first-time entrepreneurs. By breaking it down to something concrete, aspiring business owners can get a clearer and more reliable view of how they can materialize their goals.

The tangibility and objective nature of a business plan can help increase your confidence and motivation in growing your company. Yes, you can always discuss your plans verbally during meetings or conversations, but a black and white approach offers a stronger grasp of the direction you want to go and how to get there.

Attracting investors

Another objective of a business plan is to entice potential investors. Before people put their money into a company, they'll naturally want to review plans for performance, and a business plan couldn't be more perfect for this. The document will provide a crystal clear picture of the business' current financial performance, anticipated profit streams, marketing research for the target demographic, growth and expansion plans, and so on.

In other words, a business plan gives potential investors a bird's eye view of what they can expect from a certain company. It's a good vehicle for you to show off your business and get those investors on board.

Guiding new executives

As a company grows, you'll probably add executives to your team to help steer your business on the right path. A business plan gives these new decision-makers a wider scope of the business and how their skills can play an important role.

The absence of a business plan can also give rise to wrong expectations, disappointments and frustration, which can ultimately undermine the interests of both sides.

Planning to succeed

Just looking at a clear outline of a business plan with objectives will make it easier for you to see how it plays a pivotal role in success. But, aside from creating this plan, you also need to keep it from being static, letting it evolve with the dynamic needs and demands of the industry. A safe rule of thumb is to update this document annually.

A business plan is a good way to go back in time and appraise the business for what it's achieved so far, what needs more work and attention and, most importantly, how existing processes can be improved to produce competitive results.

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Modernizing business transition planning for the digital age

• Financial services
• Wealth and asset management
• Organizational performance
• Leadership development

As technology continues to disrupt business in the wealth management industry, a new leadership question has surfaced: What does all this change mean for business transition planning?

Though many traditional wealth management firms have embraced the need for change in their functional leadership, few have established business transition plans that put technology and transformation at the center of the process. And for many executives, a major concern is having talent now in leadership positions to sufficiently address their leadership transition needs.

For firms to survive, they must transform their transition plan by adjusting it for today’s workforce and modernizing their succession planning.

Adjusting for today’s workforce

The digital economy has placed unprecedented pressure on many financial services organizations. The workforce and its expectations are drastically different and will continue to change.

In 10 years, the average CEO will be someone who grew up with smartphones and social media playing a critical role in their daily lives. These leaders will be the ones who make legacy business models obsolete.

The traditional approach of “replacement planning” for open roles or “moving up the hierarchy” won’t meet business growth priorities, satisfy employee engagement and development needs or create a sustainable next generation of leadership.

As you evaluate how to incorporate workforce changes into your transition planning strategy, ask yourself the following:

1. Have you identified and started addressing your talent and skills shortage?

Gaps in leadership capabilities spell trouble for future growth. And the leadership gap is growing wider and wider as existing leaders are not equipped to lead a diverse workforce, and the incoming millennial workforce does not yet have the skills and capabilities necessary to lead at these levels.

It’s essential to include both the identification of future skills and capabilities needed, as well as development in your succession planning approach, to narrow this gap.

Including development in your plan is an opportunity to grow and leverage learning programs to actively grow your talent. Otherwise, your firm may struggle to proactively meet future growth demands.

2. Are you leveraging all five generations of talent?

For the first time in history, the workforce is comprised of five generations working side by side.

A new generation of executives is moving up through the corporate ranks. Millennials already make up the largest group in the workforce, with more and more entering executive positions. In addition, people are living and working longer. We have never in history employed as many aging workers as we do now. Careers just don’t look the way they did before.

It isn’t uncommon to see a millennial employee managing someone close to retirement. And while many organizations focus on millennials, successfully leveraging talent is more about the dynamics of these five generations, who have different levels of digital capability.

There are meaningful differences in how these generations view technology, processes and digital transformation. This creates an opportunity for things like cross-generational mentoring and greater diversity and collaboration. It also calls for increased transparency about career growth and future roles.

3. Are you considering the evolved employee value proposition?

Today’s high performers have a better understanding of their own value and are heavily recruited, especially those with specialized skills. Next-generation leaders expect more mobility across an organization, as well as transparency about their potential and career growth.

Managing differences in employee contribution is critical to maximizing firm performance.

Firms are shifting to continuous performance management. They’re also acknowledging the need to manage individual differences in performance found across different employees working in the same group.

Additionally, employees are more comfortable now moving on from organizations rather than having a “lifer” approach to their careers. In 2022, the median employee tenure was 4.3 years for men and 3.8 years for women.

Succession and career development play a pivotal role in the new employee value proposition. A robust and transparent succession plan can help you retain employees, plan for future growth and narrow capability gaps.

4. Are you leveraging data to build your leadership bench strength?

Organizations that leverage quantifiable metrics and benchmarking in their workforce outperform those that don’t.

Gone are the days of large binders full of Excel spreadsheets that are outdated as soon as they are printed. Modern succession planning should be leveraging technology, real-time data analytics and data insights to build a bench that can help organizations grow and sustain their success.

Firm owners need to know who their people are and what skills and capabilities exist or are lacking. They also need to make key business decisions that are based on real-time, factual data versus the age-old “gut feeling” approach. Organizations need to build a sustainable model that incorporates data into the methodology of building a leadership pipeline.

Don’t let your organization avoid using data to drive decisions. This includes looking at data around flight risk, employee aspirations, mobility and agility.

5. Is your succession strategy linked to strategic objectives and financial performance commitments?

Firms that are most effective at building a sustainable leadership pipeline modernize their succession planning by embedding it with their business strategy.

Simple replacement planning will no longer work.

There is a significant difference between a succession approach that is more about exit planning versus one that is driven by strategic objectives, predictive analytics and a focus on investing in future leadership talent.

Firms need to proactively structure their pipeline of talent with growth targets, financial commitments, upcoming market expansion plans and other key objectives.

How Wipfli can help

Leadership gaps can hinder your growth, put your strategic priorities at risk and expose your organization to new talent management challenges.

Wipfli’s business transition group can help you put the binder away and shift your thinking toward a modern succession model. We help you make succession decisions that are supported by insightful technology and tied to your business results so that you can build effective leadership readiness.

To learn more about our objective and targeted guidance for your transition goals, contact us today . 

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What to Know About Claudia Sheinbaum, Mexico’s Newly Elected President

Here are five key insights into Mexico’s new president as people wonder whether she will diverge from Andrés Manuel López Obrador’s policies or focus on cementing his legacy.

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By Natalie Kitroeff

Reporting from Mexico City

Claudia Sheinbaum’s list of accolades is long: She has a Ph.D in energy engineering, participated in a United Nations panel of climate scientists awarded a Nobel Peace Prize and governed the capital, one of the largest cities in the hemisphere.

On Sunday, she added another achievement to her résumé: becoming the first woman elected president of Mexico.

Ms. Sheinbaum, 61, captured at least 58 percent of the vote in a landmark election on Sunday that featured two women competing for the nation’s highest office — a groundbreaking contest in a country long known for a culture of machismo and rampant violence against women.

Mexico Election Results: Sheinbaum Wins

See results and maps for Mexico’s 2024 presidential election.

“For the first time in 200 years of the republic, I will become the first female president of Mexico,” she said. “And as I have said on other occasions, I do not arrive alone. We all arrived, with our heroines who gave us our homeland, with our ancestors, our mothers, our daughters and our granddaughters.”

Now that she has clinched the presidency, Ms. Sheinbaum’s next hurdle will be stepping out of the shadow of her predecessor and longtime mentor, Andrés Manuel López Obrador, the outgoing president.

She and Mr. López Obrador are “different people,” she said in an interview. He’s an oilman who invested in environmentally questionable projects; she’s a climate scientist. Yet Ms. Sheinbaum has appealed to voters mainly by promising to cement his legacy, backing moves like his big bet on the national oil company and proposed constitutional changes that critics call antidemocratic.

Their alliance has also left many Mexicans asking: Can Ms. Sheinbaum be her own leader? Or will she just be his pawn?

“There’s this idea, because a lot of columnists say it, that I don’t have a personality,” Ms. Sheinbaum complained to reporters earlier this year. “That President Andrés Manuel López Obrador tells me what to do.”

She insists she will govern independently from Mr. López Obrador and has some different priorities. But veering too far from his agenda could be very risky.

Here are five things to know about the newly elected president of Mexico that help inform whether she will stray from Mr. López Obrador’s policies or dedicate herself to cementing his legacy.

1. Sheinbaum will inherit a host of challenges.

A former ballet dancer, Ms. Sheinbaum calls herself “obsessive” and “disciplined.” But discipline may not be enough, analysts say.

As president, she already stands to inherit a long list of troubles. The state-owned oil company is buckling under debt, migration through the country has reached historical highs and cartel violence continues to torment the country.

She has said she would continue Mr. López Obrador’s policy of addressing the drivers of violence instead of waging war on the criminal groups, but will also work to lower rates of impunity and build up the national guard.

With a U.S. presidential election just months away, she told The New York Times that she was prepared to work with whichever candidate wins. Publicly, she has echoed Mr. López Obrador’s emphasis on tackling migration by addressing its root causes.

In a hint of potential change, she said in a recent debate that she would seek to reform the c ountry’s migration authority , an agency often accused of corruption.

2. She’s seen as reserved, even aloof.

The Times spoke with two dozen people who have worked with or know Ms. Sheinbaum and also visited campaign events, reviewed her writings and her media appearances and interviewed her, once in 2020 and again this year.

What became clear is that Ms. Sheinbaum, (pronounced SHANE-balm), has long seemed more comfortable quietly getting things done than selling herself or her achievements.

The granddaughter of Jewish immigrants who fled Europe, she rarely discusses being Jewish or almost anything about her personal life, colleagues say. When interviewers ask her about the Nobel Prize she shared with a panel of climate researchers, she notes how many others were involved in the work.

She is known as a tough boss with a quick temper who can inspire in her staff fear and adoration at the same time. Publicly, though, her affect is so controlled it verges on aloof.

Some say her professorial demeanor could pose a challenge in a political landscape defined by Mr. López Obrador, who built his party into a juggernaut by relying on the force of his personality.

“She needs him,” said Carlos Heredia, a Mexican political analyst. “She doesn’t have the charisma, she doesn’t have the popularity, she doesn’t have the political stamina of her own, so she needs to borrow that from López Obrador.”

For some Mexicans, however, a thrills-free woman may be an ideal antidote to an entertaining man who plunged the country into partisan turmoil.

3. She’s long sought to keep Mr. López Obrador happy.

The candidate’s political career began when Mr. López Obrador was elected mayor of Mexico City in 2000 and invited her to a meeting at a diner. “What I want is to reduce pollution,” she recalled Mr. López Obrador telling her. “Do you know how to do that?”

Ms. Sheinbaum, who by then had written more than a dozen reports on energy use and carbon emissions, said yes. She became his environment minister. In meetings, she seemed willing to do almost anything to make her boss happy, according to several people who worked with her.

“The phrase she used over and over again was ‘The mayor said to,’” said Mr. Heredia, who worked with her in city government under Mr. López Obrador. What that meant, according to Mr. Heredia: “We are not a cabinet for giving ideas,” he said. “We are a group of people here to execute what he decides.”

In the years that followed, Ms. Sheinbaum straddled academia and politics, but she always stayed close to Mr. López Obrador. When he founded his Morena party in 2014, he asked her to run on the party’s ticket to become mayor of Tlalpan, a borough of Mexico City. With his backing, she won.

4. She is known for being a demanding boss.

In 2018, Mr. López Obrador was swept into the presidency in a landslide and Ms. Sheinbaum became Mexico City’s mayor. She quickly gained a reputation as an exacting boss.

“One doesn’t go to her meetings to tell her, ‘I’m working on it,’” said Soledad Aragón, a former member of Ms. Sheinbaum’s cabinet. When she walked into a room, Ms. Aragón said, everyone sat up straight.

As mayor, she could remember specific numbers mentioned in a meeting weeks after it occurred, Ms. Aragón said, calling her “brilliant” and “demanding,” especially of herself, adding: “It has gotten results.”

Five officials who have worked with Ms. Sheinbaum, who were not authorized to speak publicly, said that she was quick to anger at times and would yell at her subordinates in front of large groups. Through a spokesman, Ms. Sheinbaum declined to comment on the accusation.

Her defenders say some people merely reacted badly to a woman in charge.

“I know that in her government, sometimes people got offended or felt bad because she yelled at them,” said Marta Lamas, a longtime feminist activist who has been close to Ms. Sheinbaum and her team. “But if a man yells, it wouldn’t be an issue because culturally, it’s different.”

“People say it in a critical way: ‘She’s tough,’” Ms. Aragón said. “What do you want, someone soft in charge of the city?”

5. She is a true believer in Mr. López Obrador’s vision.

For years, Ms. Sheinbaum has tried to explain how she can be so in step with Mr. López Obrador while also being herself. The answer, she says, is simple: She genuinely believes in him.

In 2022, a radio host asked her a pointed question from a female listener: “Why don’t you choose to be a woman who governs with her own ideas? Why don’t you get out of AMLO’s circus?” she asked, using Mr. López Obrador’s nickname. “Why have the same rhetoric with the same words?”

Ms. Sheinbaum didn’t hesitate.

“If you think the same as another person, it’s not that you’re copying them; you just agree with the ideas,” she said. “You can’t deny what you believe.”

Emiliano Rodríguez Mega contributed reporting.

Natalie Kitroeff is the Mexico City bureau chief for The Times, leading coverage of Mexico, Central America and the Caribbean. More about Natalie Kitroeff

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The Japanese economy likely contracted at a slightly slower pace than initially reported in January-March due to upgrades to capital spending figures, a Reuters poll showed on Friday, although risks continue to cloud the outlook.

World Environment Day-- 5 June 2024

Land ecosystems provide invaluable services that are essential for life, such as oxygen, food and water. 

Land is also critical to our efforts to address climate change and to protect us from its worst impacts. 

And land is home to much of the world’s biodiversity:

• The forests, the plains and the meadows host an extraordinary wealth of life forms. 
• Soils teem with invertebrates and microorganisms working day and night to support life and our very existence on this planet. 

But land degradation through deforestation, desertification, pollution and waste, and climate change, are stifling land ecosystems, putting millions of people in harm’s way. 

We need to restore land and its ecosystem functions and services. 

The Kunming-Montreal Global Biodiversity Framework—also known as The Biodiversity Plan —is about halting and reversing biodiversity loss by 2030 for the benefit of people and planet.

This is humanity’s roadmap towards living in harmony with nature. 

The four goals of the plan aim to protect and restore nature, to prosper with nature, to share benefits fairly, and to invest and collaborate for nature. 

The Plan includes a specific target to restore 30% of all degraded ecosystems by 2030. Other Targets address land use-planning, sustainable agriculture, urban planning and reducing the risks from pollution. 

Achieving the ambitious goals and targets of the Plan requires a whole of society approach, with the active participation of indigenous peoples and local communities, women and youth, business and civil society and all levels of government.

We must all be part of the Plan. We must all be part of Generation Restoration.

Happy #WorldEnvironmentDay ! Join #GenerationRestoration and millions around the globe to take action to restore our land & soil! Read our web story: https://t.co/xfVGv7PqJO Watch a message from our Acting Executive Secretary @hdavidcooper 👇 pic.twitter.com/bmGADDhXs7 — UN Biodiversity (@UNBiodiversity) June 5, 2024

More information:

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Dry and Sub-humid Lands Biodiversity

The Biodiversity Plan

Related Targets in The Biodiversity Plan

 Ensure that all areas are under participatory, integrated and biodiversity inclusive spatial planning and/or effective management processes addressing land- and sea‑use change, to bring the loss of areas of high biodiversity importance, including ecosystems of high ecological integrity, close to zero by 2030, while respecting the rights of indigenous peoples and local communities.

Why is this target important?

Land-use and sea-use change are major direct drivers of biodiversity loss. Land-use change has had the largest relative negative impact on terrestrial and freshwater ecosystems since 1970, with agricultural expansion being the most widespread form of land-use change. Marine and coastal ecosystems have been significantly affected by human activities as well, with research demonstrating increasing cumulative impacts of human activities in more than 60 per cent of the ocean.   

Increasing demands and conflicting uses of land, inland water and ocean space and resources underscore the need for cross-sectoral approaches that allow for the consideration of multiple interests, values and types of use. Integrated spatial planning and/or effective management processes allow countries to analyze and then effectively allocate the spatial and temporal distribution of activities in each environment to achieve various social, ecological and economic objectives. Integrated and participatory spatial planning helps bring together all stakeholders for a particular space and thereby ensure the prioritization and proper allocation of various activities and thereby balance the need to safeguard nature, while advancing sustainable socioeconomic development and ensuring food security and human well-being. The ecosystem approach as well as the many examples of guidance and experience in implementing this approach also provide a strong basis for this target. 

Links to other elements of the Biodiversity Plan and other frameworks and processes. 

• Actions to reach Target 1 should take into account all of the considerations for implementation identified in  section C of the Kunming-Montreal Global Biodiversity Framework . 
• Progress towards this target will support the attainment of goals A and B of the Kunming-Montreal Global Biodiversity Framework. In addition, progress towards this target will directly support the attainment of targets  2 ,  3 ,  5 ,  10  and  12  of the Framework. Conversely, progress towards targets  14 ,  19 ,  20 ,  21 ,  22  and  23  will help to reach Target 1. 
• Target 1 addresses issues that were previously addressed by   Aichi Biodiversity Target 5 .
• Elements of Target 1 are also addressed in the targets of the Sustainable Development Goals, including targets  14.2 ,  15.1, 15.2, 15.5 and 15.9 . 

Click here for more information about Target 1

Ensure that by 2030 at least 30 per cent of areas of degraded terrestrial, inland water, and coastal and marine ecosystems are under effective restoration, in order to enhance biodiversity and ecosystem functions and services, ecological integrity and connectivity.

Habitat degradation is the result of human-induced processes that result in a decline in biodiversity, ecosystem functions and services, and resilience and can occur in terrestrial, freshwater or marine and coastal ecosystems. Because degradation can take many forms and be measured in different ways, there are varying estimates on the amount of degraded habitat globally. However, estimates suggest that between 20 and 40 per cent of the global land area alone could be considered degraded, affecting the well-being of at least 3.2 billion people

The main direct drivers of land degradation are the expansion of crop and grazing lands into natural areas, unsustainable agricultural and forestry practices, climate change, and, in specific areas, urban expansion, infrastructure development and extractive industry. Habitat loss through transformation and the decline in the suitability of the remaining habitat through degradation are the leading causes of biodiversity loss.  Ecosystems affected by land degradation mainly include forests, rangelands and wetlands. Wetlands are particularly degraded, with 87 per cent lost globally in the last 300 years, and 54 per cent since 1900. Marine ecosystems are experiencing high rates of habitat loss and degradation as well, particularly along coastlines, mangrove forests and coral reefs. 

• Actions to reach Target 2 should take into account all of the considerations for implementation identified in  section C of the Kunming-Montreal Global Biodiversity Framework . 
• Progress towards this target will support the attainment of goals A and B of the Kunming-Montreal Global Biodiversity Framework. In addition, progress towards this target will directly support the attainment of targets  3 ,  8 ,  11  and  12  of the Framework. Conversely, progress towards targets  1 ,  14 ,  19 ,  20 ,  21 ,  22  and  23  will help to reach Target 2. 
• Target 2 addresses issues that were previously addressed by  Aichi Biodiversity Target 15  
• Elements of Target 2 are also addressed in the targets of the Sustainable Development Goals, including targets  6.6 ,  14.2 ,  15.1 and 15.3
• Target 2 also links to processes under the United Nations Convention to Combat Desertification (UNCCD) related to land degradation neutrality and associated target setting, the Global Forest Goals and targets of the United Nations Strategic Plan for Forests developed under the United Nations Forum on Forests, Ramsar Resolution VII.17 as well as to the United Nations Decade on Ecosystem Restoration. 

Click here for more information about Target 2

Ensure and enable that by 2030 at least 30 per cent of terrestrial and inland water areas, and of marine and coastal areas, especially areas of particular importance for biodiversity and ecosystem functions and services, are effectively conserved and managed through ecologically representative, well-connected and equitably governed systems of protected areas and other effective area-based conservation measures, recognizing indigenous and traditional territories, where applicable, and integrated into wider landscapes, seascapes and the ocean, while ensuring that any sustainable use, where appropriate in such areas, is fully consistent with conservation outcomes, recognizing and respecting the rights of indigenous peoples and local communities, including over their traditional territories.

Click here for more information about Target 3

Minimize the impact of climate change and ocean acidification on biodiversity and increase its resilience through mitigation, adaptation, and disaster risk reduction actions, including through nature-based solution and/or ecosystem-based approaches, while minimizing negative and fostering positive impacts of climate action on biodiversity.

Climate change is one of the main direct drivers of biodiversity loss. In addition to climate change, rising atmospheric carbon dioxide concentrations have also resulted in ocean acidification. Various mitigation, adaptation and disaster risk reduction measures, including nature-based solutions and/or ecosystem-based approaches, have the potential to increase the resilience of ecosystems and human livelihoods to the impacts of climate change, including reducing emissions from deforestation and other land-use changes, and by enhancing carbon sinks. These approaches can also deliver numerous social, economic and environmental co-benefits.

• Actions to reach Target 8 should take into account all of the considerations for implementation identified in  section C of the Kunming-Montreal Global Biodiversity Framework . 
• Progress towards Target 8 will help to reach goals A and B of the Kunming-Montreal Global Biodiversity Framework. Progress towards this target could also help to reach targets  2 ,  3 ,  4 ,  10 ,  11 , and  12 . Conversely, progress towards targets  1 ,  10 ,  14 ,  19 ,  20 ,  21 ,  22  and  23  would facilitate progress towards this target. 
• Target 8 addresses issues previously addressed in  Aichi Biodiversity Target 10 .
• Elements of Target 8 are also addressed in the targets of the Sustainable Development Goals, including targets  13.1 ,  13.2  and  14.3 . 
• Target 8 is also relevant to work being undertaken under the Paris Agreement under the UNFCCC, as well as the Sendai Framework for Disaster Risk Reduction.

Click here for more information about Target 8

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