what are 3 types of business plans

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

Published: June 28, 2024

Years ago, I had an idea to launch a line of region-specific board games. I knew there was a market for games that celebrated local culture and heritage. I was so excited about the concept and couldn't wait to get started.

But my idea never took off. Why? Because I didn‘t have a plan. I lacked direction, missed opportunities, and ultimately, the venture never got off the ground.

And that’s exactly why a business plan is important. It cements your vision, gives you clarity, and outlines your next step.

In this post, I‘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.

Table of Contents

What is a business plan?

What is a business plan used for.

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Purposes of a Business Plan

What does a business plan need to include, types of business plans.

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A business plan is a comprehensive document that outlines a company's goals, strategies, and financial projections. It provides a detailed description of the business, including its products or services, target market, competitive landscape, and marketing and sales strategies. The plan also includes a financial section that forecasts revenue, expenses, and cash flow, as well as a funding request if the business is seeking investment.

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.

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.

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BUSINESS STRATEGIES

7 types of business plans every entrepreneur should know

• Amanda Bellucco Chatham
• Aug 3, 2023

What’s the difference between a small business that achieves breakthrough growth and one that fizzles quickly after launch? Oftentimes, it’s having a solid business plan.

Business plans provide you with a roadmap that will take you from wantrepreneur to entrepreneur. It will guide nearly every decision you make, from the people you hire and the products or services you offer, to the look and feel of the business website you create.

But did you know that there are many different types of business plans? Some types are best for new businesses looking to attract funding. Others help to define the way your company will operate day-to-day. You can even create a plan that prepares your business for the unexpected.

Read on to learn the seven most common types of business plans and determine which one fits your immediate needs.

What is a business plan?

A business plan is a written document that defines your company’s goals and explains how you will achieve them. Putting this information down on paper brings valuable benefits. It gives you insight into your competitors, helps you develop a unique value proposition and lets you set metrics that will guide you to profitability. It’s also a necessity to obtain funding through banks or investors.

Keep in mind that a business plan isn’t a one-and-done exercise. It’s a living document that you should update regularly as your company evolves. But which type of plan is right for your business?

7 common types of business plans

Startup business plan

Feasibility business plan

One-page business plan

What-if business plan

Growth business plan

Operations business plan

Strategic business plan

01. Startup business plan

The startup business plan is a comprehensive document that will set the foundation for your company’s success. It covers all aspects of a business, including a situation analysis, detailed financial information and a strategic marketing plan.

Startup plans serve two purposes: internally, they provide a step-by-step guide that you and your team can use to start a business and generate results on day one. Externally, they prove the validity of your business concept to banks and investors, whose capital you’ll likely need to make your entrepreneurial dreams a reality.

Elements of a startup business plan should include the following steps:

Executive summary : Write a brief synopsis of your company’s concept, potential audience, product or services, and the amount of funding required.

Company overview: Go into detail about your company’s location and its business goals. Be sure to include your company’s mission statement , which explains the “why” behind your business idea.

Products or services: Explain exactly what your business will offer to its customers. Include detailed descriptions and pricing.

Situation analysis: Use market research to explain the competitive landscape, key demographics and the current status of your industry.

Marketing plan: Discuss the strategies you’ll use to build awareness for your business and attract new customers or clients.

Management bios: Introduce the people who will lead your company. Include bios that detail their industry-specific background.

Financial projections: Be transparent about startup costs, cash flow projections and profit expectations.

Don’t be afraid to go into too much detail—a startup business plan can often run multiple pages long. Investors will expect and appreciate your thoroughness. However, if you have a hot new product idea and need to move fast, you can consider a lean business plan. It’s a popular type of business plan in the tech industry that focuses on creating a minimum viable product first, then scaling the business from there.

02. Feasibility business plan

Let’s say you started a boat rental company five years ago. You’ve steadily grown your business. Now, you want to explore expanding your inventory by renting out jet skis, kayaks and other water sports equipment. Will it be profitable? A feasibility business plan will let you know.

Often called a decision-making plan, a feasibility business plan will help you understand the viability of offering a new product or launching into a new market. These business plans are typically internal and focus on answering two questions: Does the market exist, and will you make a profit from it? You might use a feasibility plan externally, too, if you need funding to support your new product or service.

Because you don’t need to include high-level, strategic information about your company, your feasibility business plan will be much shorter and more focused than a startup business plan. Feasibility plans typically include:

A description of the new product or service you wish to launch

A market analysis using third-party data

The target market , or your ideal customer profile

Any additional technology or personnel needs required

Required capital or funding sources

Predicted return on investment

Standards to objectively measure feasibility

A conclusion that includes recommendations on whether or not to move forward

03. One-page business plan

Imagine you’re a software developer looking to launch a tech startup around an app that you created from scratch. You’ve already written a detailed business plan, but you’re not sure if your strategy is 100% right. How can you get feedback from potential partners, customers or friends without making them slog through all 32 pages of the complete plan?

That’s where a one-page business plan comes in handy. It compresses your full business plan into a brief summary. Think of it as a cross between a business plan and an elevator pitch—an ideal format if you’re still fine-tuning your business plan. It’s also a great way to test whether investors will embrace your company, its mission or its goals.

Ideally, a one-page business plan should give someone a snapshot of your company in just a few minutes. But while brevity is important, your plan should still hit all the high points from your startup business plan. To accomplish this, structure a one-page plan similar to an outline. Consider including:

A short situation analysis that shows the need for your product or service

Your unique value proposition

Your mission statement and vision statement

Your target market

Your management team

The funding you’ll need

Financial projections

Expected results

Because a one-page plan is primarily used to gather feedback, make sure the format you choose is easy to update. That way, you can keep it fresh for new audiences.

04. What-if business plan

Pretend that you’re an accountant who started their own financial consulting business. You’re rapidly signing clients and growing your business when, 18 months into your new venture, you’re given the opportunity to buy another established firm in a nearby town. Is it a risk worth taking?

The what-if business plan will help you find an answer. It’s perfect for entrepreneurs who are looking to take big risks, such as acquiring or merging with another company, testing a new pricing model or adding an influx of new staff.

A what-if plan is additionally a great way to test out a worst-case scenario. For example, if you’re in the restaurant business, you can create a plan that explores the potential business repercussions of a public health emergency (like the COVID-19 pandemic), and then develop strategies to mitigate its effects.

You can share your what-if plan internally to prepare your leadership team and staff. You can also share it externally with bankers and partners so that they know your business is built to withstand any hard times. Include in your plan:

A detailed description of the business risk or other scenario

The impact it will have on your business

Specific actions you’ll take in a worst-case scenario

Risk management strategies you’ll employ

05. Growth business plan

Let’s say you’re operating a hair salon (see how to create a hair salon business plan ). You see an opportunity to expand your business and make it a full-fledged beauty bar by adding skin care, massage and other sought-after services. By creating a growth business plan, you’ll have a blueprint that will take you from your current state to your future state.

Sometimes called an expansion plan, a growth business plan is something like a crystal ball. It will help you see one to two years into the future. Creating a growth plan lets you see how far—and how fast—you can scale your business. It lets you know what you’ll need to get there, whether it’s funding, materials, people or property.

The audience for your growth plan will depend on your expected sources of capital. If you’re funding your expansion from within, then the audience is internal. If you need to attract the attention of outside investors, then the audience is external.

Much like a startup plan, your growth business plan should be rather comprehensive, especially if the people reviewing it aren’t familiar with your company. Include items specific to your potential new venture, including:

A brief assessment of your business’s current state

Information about your management team

A thorough analysis of the growth opportunity you’re seeking

The target audience for your new venture

The current competitive landscape

Resources you’ll need to achieve growth

Detailed financial forecasts

A funding request

Specific action steps your company will take

A timeline for completing those action steps

Another helpful thing to include in a growth business plan is a SWOT analysis . SWOT stands for strengths, weaknesses, opportunities and threats. A SWOT analysis will help you evaluate your performance, and that of your competitors. Including this type of in-depth review will show your investors that you’re making an objective, data-driven decision to expand your business, helping to build confidence and trust.

06. Operations business plan

You’ve always had a knack for accessories and have chosen to start your own online jewelry store. Even better, you already have your eCommerce business plan written. Now, it’s time to create a plan for how your company will implement its business model on a day-to-day basis.

An operations business plan will help you do just that. This internal-focused document will explain how your leadership team and your employees will propel your company forward. It should include specific responsibilities for each department, such as human resources, finance and marketing.

When you sit down to write an operations plan, you should use your company’s overall goals as your guide. Then, consider how each area of your business will contribute to those goals. Be sure to include:

A high-level overview of your business and its goals

A clear layout of key employees, departments and reporting lines

Processes you’ll use (i.e., how you’ll source products and fulfill orders)

Facilities and equipment you’ll need to conduct business effectively

Departmental budgets required

Risk management strategies that will ensure business continuity

Compliance and legal considerations

Clear metrics for each department to achieve

Timelines to help you reach those metrics

A measurement process to keep your teams on track

07. Strategic business plan

Say you open a coffee shop, but you know that one store is just the start. Eventually, you want to open multiple locations throughout your region. A strategic business plan will serve as your guide, helping define your company’s direction and decision-making over the next three to five years.

You should use a strategic business plan to align all of your internal stakeholders and employees around your company’s mission, vision and future goals. Your strategic plan should be high-level enough to create a clear vision of future success, yet also detailed enough to ensure you reach your eventual destination.

Be sure to include:

An executive summary

A company overview

Your mission and vision statements

Market research

A SWOT analysis

Specific, measurable goals you wish to achieve

Strategies to meet those goals

Financial projections based on those goals

Timelines for goal attainment

Related Posts

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5 Types Of Business Plans (+ Customizable Templates)

Find the best form of business plan for your venture and learn to align your business plan model with a winning strategy. Grab a template to get started.

6 minute read

helped business professionals at:

Short answer

What are the main types of business plans?

5 main types of business plans:

Startup business plan

One-pager business plan

Operational business plan

Feasibility business plan

Growth business plan

Aligning your strategy with the wrong type of business plan leads to failure

Crafting a sharp business plan is non-negotiable if you want your project to lift off the ground.

Yet, many miss the mark by not adapting their strategy to the appropriate type of business plan. It's like trying to open a door with the wrong key, frustrating and futile. This oversight can lead to miscommunication, disinterest from crucial stakeholders, and missed growth opportunities.

Here's where I step in, offering you a master key to unlock the true potential of effective business planning.

You'll learn about the strategic value of tailoring your plan to fit specific needs, whether you're kickstarting a venture, seeking investment, or plotting growth. Let's go.

What makes a successful business plan?

Creating a business plan that stands out involves more than just outlining your business's operations. It's about highlighting how your business differentiates itself and thrives within its industry.

Drawing inspiration from expert advice on business planning, here's an overview of the key elements that make a business plan successful. 6 key elements of a winning business plan:

Precision and structure: It's sharp, structured, and zeroes in on the business's main goals and strategies without unnecessary fluff.

Grounded objectives and forecasts: It sets attainable objectives and includes grounded financial forecasts, informed by thorough market analysis and industry insights.

Flexibility: It remains adaptable, ready to evolve alongside the business and shifting market dynamics.

Audience-specific design: It's crafted with the target audience in mind, whether that's attracting investors, securing loans, or engaging customers, ensuring it resonates and meets their expectations.

Clear communication: It communicates the business idea, market potential, and growth trajectory clearly and persuasively.

Defined action plan: It provides a clear set of steps to be undertaken to reach the business's goals, making it practical and actionable.

Internal vs. external business plan

The difference between internal and external business plans is based on their intended audience.

INTERNAL BUSINESS PLAN

EXTERNAL BUSINESS PLAN

Internal business plan

Internal documents tailored for departments such as marketing or HR emphasize recruitment statistics , succinct insights about the company, and a more focused financial outlook. These documents usually adopt a less formal tone and are often managed using document management software to ensure efficient organization and accessibility.

Purpose: Align your team and streamline operations.

Key approach: Focus on strategy, flexibility, and clear metrics.

Tip: Regularly review and update the plan, and encourage team feedback.

External business plan

External documents reach out to those outside your immediate circle, such as investors or partners. They provide a thorough overview of your company, including detailed financials, and maintain a formal tone, typically aimed at securing funding or establishing partnerships.

Purpose: Impress and persuade investors or partners.

Key approach: Ensure clarity, and professionalism, and tailor content to your audience.

Tip: Understand your audience's priorities, and seek expert feedback before finalizing.

5 types of business plans to align your strategy with

Picking the right business plan is a big deal for founders, managers, and leaders. But let's be honest, diving into the sea of options can feel overwhelming.

Whether you're chasing funding, dreaming of expanding or looking to streamline your operations, I've got you covered.

I'm talking about seizing opportunities to not just meet your goals but to exceed them. Let's dive in and align your ambitions with the perfect plan.

1) Startup business plan

Audience: External stakeholders, including investors and financial institutions.

Depth: Comprehensive and detailed.

Purpose: To outline the steps for launching a new venture and securing funding.

The startup plan is your blueprint for launching a new venture.

It's packed with everything from a punchy executive summary that grabs you with the business concept to deep dives into market trends and who you're up against.

It lays out financial forecasts with precision, giving potential backers a crystal-clear picture of where you're headed in terms of profits and what you need to get there.

This plan isn't just about pulling in funds; it's your strategic playbook for carving out a successful path forward. For newbies on the entrepreneurial scene, it's nothing short of essential.

Here’s an example of a start-up business plan:

2) One-pager business plan

Audience: External parties, such as potential investors, partners, and vendors.

Depth: High-level and succinct.

Purpose: To quickly communicate the business's value proposition and growth potential.

The one-page plan condenses the core of a business strategy into a succinct and impactful document, crafted to immediately capture the attention of potential investors, partners, and vendors.

It showcases the unique value proposition, targets the market with effective strategies, and highlights financial insights and growth potential.

This streamlined plan turns out to be a game-changer for entrepreneurs looking to share their vision and strategy in a clear, easy-to-understand way.

It quickly gets the point across and sparks interest from potential stakeholders, encouraging them to dive deeper.

Here’s an example of a one-pager business plan:

3) Operational business plan

Audience: Internal management teams and department heads.

Depth: Detailed, focusing on day-to-day operations and short-term goals.

Purpose: To streamline internal processes and enhance operational efficiency.

The operational business plan is like the company's playbook, focusing on fine-tuning every single part of your operations.

It lays out the operational goals that sync up with your big-picture strategies, breaking down the exact tasks and processes you need to nail those targets.

You've got everything mapped out, from streamlining workflows to boosting efficiency, and even who's doing what to ensure you're all pulling in the same direction.

It also covers allocating resources, from budgets to materials, ensuring every department has what it needs.

Diving into the nitty-gritty of your day-to-day, this plan is key for spotting where you can do better, ramping up productivity, and hitting your short-term goals more smoothly.

Here’s an example of an operational business plan:

4) Growth business plan

Audience: Both internal stakeholders for strategic alignment and external parties for investment or partnership opportunities.

Depth: This can vary from lean to standard, depending on the audience.

Purpose: To provide a strategic framework for business expansion.

The growth plan feels like launching into a new adventure, much like a startup plan, but for your next big leap.

It's about charting a course for new markets, beefing up your product lines, or scaling operations to new heights.

This plan packs deep dives into the business, financial forecasts that map out your journey, and a rundown of the resources you'll need to expand.

It's a guiding light for businesses aiming for sustainable growth, laying out a clear path and milestones to hit along the way.

Whether it's guiding your team internally or dazzling potential investors, the growth plan pulls everyone together, focusing efforts on shared growth targets.

It's about making sure every stakeholder is in sync, marching towards the same ambitious goals.

Here’s an example of a growth business plan:

5) Feasibility business plan

Audience: Primarily internal, though it can be external if linked to funding requests.

Depth: Focused and streamlined.

Purpose: To assess the viability of a new product or service.

A feasibility plan, or feasibility study, acts as a litmus test for proposed business expansions or new product launches.

It delves into the practicality of the idea, examining market demand, technical requirements, and financial implications.

By focusing on specific growth opportunities and analyzing them against objective standards, this plan helps decision-makers within the organization determine whether to proceed with the venture.

It's a critical step in the planning process, ensuring resources are allocated to projects with the highest potential for success.

For ventures requiring external funding, a more detailed version of this plan may be necessary to convince investors of the project's feasibility.

If you want to learn more, check out our guides on business plan:

7 Key Components of a Precise Business Plan (2024)

How to Write a Business Plan (Examples & Templates)

How to Make a Killer Business Plan Presentation (+Templates)

Create a Business Plan One-Pager (+ Proven Templates)

Don’t let poor design sabotage your business plan

Designing a business plan presentation in today's digital age goes beyond mere text on a page, it's about crafting an engaging experience that captures and retains attention.

With the shift towards digital, the presentation of your plan is as crucial as its content.

5 crucial business plan design principles:

1) Transition from static to interactive

The era of static, text-heavy presentations is behind us. Modern business plans thrive on interactivity, incorporating elements like clickable links, dynamic charts, and embedded videos.

This approach not only enriches the reader's experience but also fosters a deeper engagement with the material, making your business plan far more compelling.

Here's what a static PPT looks like compared to an interactive deck:

Static PowerPoint

Interactive Storydoc

2) Implement scroll-based design

Ditch the cumbersome PDF format for a scroll-based design that mirrors the seamless experience of browsing a modern website.

This design choice is intuitive and aligns with our habitual online content consumption, making your business plan both accessible and enjoyable to navigate.

Here's an example of scroll-based design:

3) Prioritize mobile-friendliness

In a world where mobile devices dominate, ensuring your business plan looks great on any screen is non-negotiable.

Adopting responsive design guarantees that your plan is legible and appealing across all devices, from smartphones to desktops, ensuring your message resonates clearly with every reader.

4) Move to online documents

Forget about clunky Word docs or static PDFs. The future is online documents that allow for real-time updates, easy sharing, and collaboration.

They're not only convenient for you but also for your busy investors, offering access from anywhere, at any time.

For more information, check out our comparison of the best business plan document types .

5) Master visual storytelling

Leverage the power of visuals infographics, charts, and graphs to narrate your business's story.

Visuals can simplify complex information, making your key points more digestible and engaging than text alone could ever achieve.

Here's a great example of visual storytelling:

All forms of business plan templates to get you started

Just as a captivating presentation can transform the way your message is received, a well-crafted business plan is your gateway to turning your business vision into reality.

Why settle for a dry, uninspiring document when you can create a business plan that's a dynamic blueprint for success?

Consider your business plan as a journey for your readers — investors, partners, or internal team members — keeping them engaged from the executive summary to the final appendix.

These business plan templates serve as the perfect foundation for this journey.

I am a Marketing Specialist at Storydoc, I research, analyze and write on our core topics of business presentations, sales, and fundraising. I love talking to clients about their successes and failures so I can get a rounded understanding of their world.

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What Is a Business Plan? Definition and Planning Essentials Explained

Posted august 1, 2024 by kody wirth.

What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance. 

A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner. 

Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed. 

What is a business plan?

A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.  

Why do you need a business plan?

The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster , and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis. 

These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. 

The biggest mistake you can make is not writing a business plan, and the second is never updating it. By regularly reviewing your plan, you can understand what parts of your strategy are working and those that are not.

That just scratches the surface of why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .  

What can you do with your plan?

So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.

Test an idea

Writing a plan isn’t just for those who are ready to start a business. It’s just as valuable for those who have an idea and want to determine whether it’s actually possible. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful. 

Market and competitive research alone can tell you a lot about your idea. 

• Is the marketplace too crowded?
• Is the solution you have in mind not really needed? 

Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability, and you can paint a pretty clear picture of your business’s potential.

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

Document your strategy and goals

Understanding where you’re going and how you’re going to get there is vital for those starting or managing a business. Writing your plan helps you do that. It ensures that you consider all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen. 

With a plan in place, you’ll know where you want your business to go and how you’ve performed in the past. This alone prepares you to take on challenges, review what you’ve done before, and make the right adjustments.

Pursue funding

Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. 

So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can keep it up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.

The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but also easily report on how it’s been used. 

Better manage your business

A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.

Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.

What should your business plan include?

The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see. 

Executive summary

The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover:

• The problem you’re solving
• A description of your product or service
• Your target market
• Organizational structure
• A financial summary
• Necessary funding requirements.

This will be the first part of your plan, but it’s easiest to write it after you’ve created your full plan.

Products & Services

When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. 

Lastly, outline the steps or milestones you’ll need to hit to launch your business successfully. If you’ve already achieved some initial milestones, like taking pre-orders or early funding, be sure to include them here to further prove your business’s validity. 

Market analysis

A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the industry’s overall state and potential, who your ideal customers are, the positioning of your competition, and how you intend to position your own business.

This helps you better explore the market’s long-term trends, what challenges to expect, and how you will need to introduce and even price your products or services.

Check out our full guide for how to conduct a market analysis in just four easy steps.  

Marketing & sales

Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add them. 

Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.

Check out our full write-up to learn how to create a cohesive marketing strategy for your business. 

Organization & management

This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history.

Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.

Financial projections

Possibly the most important piece of your plan, your financials section is vital for showcasing your business’s viability. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex, but it can be far easier than you think. 

Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate. 

Here are the statements you should include in your financial plan:

• Sales and revenue projections
• Profit and loss statement
• Cash flow statement
• Balance sheet

The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first; only add documentation that you think will benefit anyone reading your plan.

Types of business plans explained

While all business plans cover similar categories, the style and function depend on how you intend to use your business plan . So, to get the most out of your plan, it’s best to find a format that suits your needs. Here are a few common business plan types worth considering. 

Traditional business plan

The tried-and-true traditional business plan (sometimes called a detailed business plan ) is a formal document meant for external purposes. It is typically required when applying for a business loan or pitching to investors. 

It can also be used when training or hiring employees, working with vendors, or any other situation where the full details of your business must be understood by another individual. 

A traditional 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. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information. 

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. 

The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update and much easier for you, your team, and anyone else to visualize your business operations. 

The business model canvas is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan . Sometimes referred to as a lean plan, this format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.

By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. 

A one-page business plan is 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.

Growth plan

Now, the option that we here at LivePlan recommend is a growth plan . However, growth planning 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 holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27-minutes . 

However, it’s even easier to convert into a more detailed business plan thanks to how heavily it’s tied to your financials. The overall goal of growth planning isn’t to just produce documents that you use once and shelve. Instead, the growth planning process helps you build a healthier company that thrives in times of growth and stable through times of crisis.

It’s faster, concise, more focused on financial performance, and ensures that your plan is always up-to-date.

How can you write your own business plan?

Now that you know the definition of a business plan, it’s time to write your own.

Get started by downloading our free business plan template or try a business plan builder like LivePlan for a fully guided experience and an AI-powered Assistant to help you write, generate ideas, and analyze your business performance.

No matter which option you choose, writing a business plan will set you up for success. You can use it to test an idea, figure out how you’ll start, and pursue funding.  And if you review and revise your plan regularly, it can turn into your best business management tool.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, 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 outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

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, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• 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 : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

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

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While 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 ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

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

Harvard Business Review. " How to Write a Winning Business Plan ."

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

SCORE. " When and Why Should You Review Your Business Plan? "

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The 8 Types of Business Plans Explained

by  Antony W

June 8, 2024

In this guide, we look at the different types of business plans and where they apply.

You can write a standard, lean, one-page, startup, strategic, feasibility, operational, or growth business plan depending on your needs.

Here’s an explanation for each:

1. Standard Business Plan

A standard business plan gives a detailed description of the operations of a business so stakeholders can understand the business well. A standard business plan features an executive summary , competitive analysis, SWOT analysis, and market summary.

The success of a standard business plan anchors on the information it provides. Therefore, focus on providing accurate information, so investors can have an easy time evaluating the risk and potential of the business before releasing funds.

A standard business plan should also include financial plan, problem analysis, and management objectives.

2. Lean Business Plan

A lean business plan is a condensed and straightforward document that highlights and summarizes the most important aspects of a business. Many entrepreneurs use this plan for efficient communication because it highlights only the most significant elements and milestones.

The necessary details to include in a lean business plan are operation strategies, financial projections, and the strategies necessary for business success in a rather competitive marketing landscape.

3. One-page Business Plan

A one-page business plan is more or less for direct to the point communication. It’s the best plan to use if you want to pitch investors and stakeholders who don’t have much time to read extensive documents.

The main benefit of a one-page business plan is that it presents only the most important information guaranteed to pique an audience’s attention. While the plan doesn’t have peripheral explanations, the information presented is enough to give a clear overview of the business.

A well-written one-page business plan summarizes the target market, operational requirements, objectives, forecasts, and products or services.

4. Startup Business Plan

A startup business plan states the requirements a business must meet to start operating in a specific market. It incorporates elements of lean and standard business plans, and its detailed sections are common when establishing new techniques likely to support the business’s overall operations.

A startup business plan has to address licensing, business permits, necessary equipment, and human resource management questions. And while the plan will vary based on the nature of business activities, comprehensive details are mandatory.

5. Strategic Business Plan

A strategic business plan describes the roadmap that a business leader intends to use to steer the enterprise in the right direction after overcoming different challenges and exploring opportunities.

You can only write a comprehensive strategic business plan after conducting an in-depth SWOT analysis and identifying the implementation processes necessary to put the business in the right direction.

The plan allows you to influence stakeholders to focus on specific aspects that eventually contribute to the overall success of the business.

6. Feasibility Business Plan

A feasibility plan allows a business to determine the existence of new markets and the potential benefits of investing in such markets.

To write a comprehensive feasibility plan, you have to understand the current business environment, evaluate opportunities, and consolidate funds to support the new ventures.

Keep in mind that your feasibility business plan may lead to recommendations that point out weaknesses and indicate ideas for growth after investments.

7. Operational Business Plan

An operational business plan is lean and focused on the implementation processes after goals are set and resources allocated to specific functions.

The specific sections of the plan will describe milestones, responsibilities, stakeholders, and goals.

Because an operational business plan focuses on internal processes, outsiders cannot contribute significantly to the business. However, they can participate in evaluation and tracking progress.

8. Growth Business Plan

Business growth is all about expansion. Therefore, you have to come up with a plan that identifies and integrate activities that facilitate expansion and drive the business to achieve specific milestone.

Your focus on growth requires accurate descriptions of long-term goals and the steps necessary to ignite the change you desire to see in your business.

The growth business plan integrates internal and external considerations to forecast, analyze, and secure resources for expansion. Incorporating What-if scenarios into the growth plan enables preparation for risky investments, ensuring readiness to address potential adverse outcomes.

What is a Business Plan?

We define a business plan as a document that describes a business’s goals and how it intends to achieve those goals. Business plans are for established enterprises and startups. A business plan is important because it documents an entity’s finance, marketing, and operational standpoint.

A comprehensive business plan acts as a powerful tool to attract investors, predict business demands in the future, and outline a long-term game plan for the business.  

How Do I Write a Business Plan?

You can write a business plan by following the process we’ve outlined to get the task completed.

• Conduct in-depth business and market research to learn more about your audience.
• Have clear goals before you start writing.
• Go straight to the point.
• Keep your tone, voice, and style consistent and professional as you write.

What is the Best Business Plan Writing Service?

Help for Assessment is the best business plan writing service online. Our company has highly trained writers with years of academic and business experience. Therefore, paying for our service will definitely get you the best results.

Our business plan writing service takes you from a completely blank page to a comprehensive document in just 7 days. It doesn’t matter if you have a strict deadline to beat or a flexible deadline to meet. You can count on our team.

How Much Do You Charge to Write a Business Plan?

We charge $12.99 to $40 per page to write a business plan. The overall cost for a business plan depends on the number of pages ordered, number of charts requested, level of expertise required, number of slides, and urgency. 

Help for Assessment offers up to 10% discount to new customers. Therefore, you can save money and benefit from our cost-effective writing if you’re on tight budget.

About the author 

Antony W is a professional writer and coach at Help for Assessment. He spends countless hours every day researching and writing great content filled with expert advice on how to write engaging essays, research papers, and assignments.

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The Different Types of Business Plans

Free Business Plan Template

• June 29, 2023

Different situations call for different business plans.

Whether you want to acquire funds, analyze market risks, introduce a new product, or simply need a roadmap for business operations— a specifically tailored business plan is essential for different business purposes.

Identifying the type of business plan you require is quintessential so that you create a document fit for your business needs.

In this blog post, we will introduce you to the 7 different types of business plans and help you understand which suits your business needs the best.

Ready to get started? Let’s dive right in.

Types of business plans

Businesses in different business situations call for different business plans.

To understand different types of business plans, we will categorize them based on audience, scope, and purpose to instill better clarity in your minds.

Let us understand these in detail to help you choose your ideal business plan.

Based on audience

Business plans are broadly categorized into two types based on the type of audience they cater to.

1. Internal business plans

As the name suggests, an internal business plan is solely for the people inside the company. These can be specific to certain departments such as marketing, HR, production, etc.

Internal business plans focus primarily on the company’s goals, operations, finances, and personnel and define the strategies to achieve their goals.

2. External business plans

On the contrary, external business plans are intended for people outside the company, such as investors, banks, partners, etc.

These plans usually contain detailed information about the company’s background, finances, market share, and business strategies.

Based on scope

Similarly, business plans are classified into two types based on their size and the depth of information they encompass.

1. Standard business plan

A standard plan or traditional business plan is a professional document offering a comprehensive understanding of your business idea. It serves as a step-by-step guide to launching your business and offers a roadmap to operate it efficiently.

A standard plan follows a structured format and usually includes components such as

• Executive summary
• Company description
• Market analysis
• Products and services
• Marketing and sales plan
• Operations plan
• Financial plan
• Funding demand

Most entrepreneurs follow this structure to write a business plan and add depth to the sections that hold significant value to them.

Best for: Startups and businesses that require a detailed roadmap or operate in highly volatile markets. These plans are also used for getting funding approvals.

2. Lean business plans

A lean plan, also known as a startup business plan, is a condensed version of the standard business plan including highlights and summaries of all its sections.

Such plans empower entrepreneurs to kickstart their business endeavors with a minimum viable product and build it gradually by gathering real market feedback.

Lean business plans are crafted with brevity and outline your strategies, revenue model, tactics, and timeline.

• Strategies: How will you reach your goals
• Tactics: What are the KPIs to evaluate your performance
• Revenue model: How will you make money
• Timeline: Who will accomplish the tasks

Drafting such plans is not only easier, it is considered to be more efficient compared to a standard plan.

Best for: Entrepreneurs who want to quickly launch their business in a hot-moving market.

Based on purpose

Every business plan tends to solve a specific purpose. Let’s understand 7 different types of business plans based on different purposes.

1. One-page business plan

One-page business plans offer a snapshot of your entire business idea in one page. Such plans follow the same structure as traditional plans, however, they are much more concise and crisp.

One-page plans are simplified versions of detailed business plans and can be placed together in less than 10 minutes.

They are quite useful when you want to convey essential information in a brief document without missing out on important points.

Best for: One-page business plan is best suited for startups and small businesses that require rapid adjustments and quick implementation.

2. Growth business plan

A growth business plan combines the crispness of one-page business plans and the detailing of financial forecasts to enable prompt decision-making.

Such plans are quite handy when you want to upscale or grow your business without writing a full-fledged detailed business plan.

Businesses can compare their forecasts with the actuals, identify the discrepancies in the current strategy, and adjust it to ensure maximum growth when they have a clear demonstration of financials.

To prepare your growth business plan, outline the target market, business strategies, and a business model as you do in your one-page plans. And additionally, also include detailed financial projections for sales, cash flow, and revenue to help individuals make data-driven decisions.

Best for: A growth plan is best for businesses entering new markets, launching new products, scaling operations, or practicing a growth planning process.

3. Strategic business plan

Strategic business plans highlight your strategic objectives, define your business strategies, and outline a roadmap to take you there. It covers the nitty-gritty about your company’s goals, mission objectives, and long-term vision.

Such plans are extremely efficient in communicating your goals to internal teams and stakeholders, while ensuring everyone is on the same page as you.

Best for: Businesses and startups planning long-term growth and nonprofits aiming to increase their impact.

4. Feasibility business plan

A feasibility business plan is specifically designed to test the viability of a new product or business expansion in a new market. As opposed to a detailed business plan, such plans focus on two primary matters:

• Determining the existence of a market
• Determining the profits of the initiative

This type of business plan usually excludes all the other sections included in usual business plans. Instead, it concentrates mainly on the scope of a new initiative, its profitability, market analysis, competition, and associated financial implications.

It is mostly crafted for internal management and ends with recommendations on whether the decision to enter a new market or introduce a new product or service is viable or not.

Best for: Established businesses and early-stage startups to assess the viability of a specific product, market, or business idea before allocating significant resources.

5. Operational business plan

Operational plans are specific documents outlining processes and procedures of day-to-day business activities. Such plans focus on operational aspects of the business such as logistics, inventory, supply chain, production, and resource allocation.

A well-mapped operational plan serves as a guidebook for internal team and management. It streamlines the workflow, establishes SOPs, and offers a clear understanding of who will perform what tasks and what resources will be required.

There is no strict format outlining the contents of such a plan. The plan just needs to be clear, communicative, and viable enough to implement practically.

Best for: Established businesses to manage operations and resource allocation and startups to establish standard clear processes.

6. Nonprofit business plan

Nonprofit business plans are suited for businesses that operate for a charitable or social cause. Such plans are quite similar to traditional plans, however, they include an additional section where you explain the impact your non-profit organization will make in society.

Like a traditional plan, you will highlight the business concept, outline the market research, set the business goals, determine your business and promotional strategies, and demonstrate your team.

Additionally, you will include a section demonstrating the financial sustainability of the nonprofit venture. This is essential to attract donors, grants, and investors for your nonprofit business.

Best for: Nonprofit startups planning to secure funding and grants from financial institutions.

7. What-If business plan

What-if business plans are contingency plans used to draft strategies for the worst-case scenarios. This plan is usually less formal unless a funding request is included.

Such planning allows you to test and study the impact of different hypothetical situations related to the market, environment, competition, and legal regulations on your business.

Best for: Businesses in highly volatile markets and companies practicing crisis management. Also suited when considering mergers, price hikes, or undertaking any major business decision.

And those are some of the many different types of business plans you can have for your business. Wondering which one your business needs? Let us make your choice easier.

Choosing the right type of business plan

Here are the 2 criteria that will help in determining the right plan for your business.

The first step to choosing a business plan is to understand the purpose and objective of writing a business plan. For instance, your objective could be to acquire funds, guide an internal team, create a strategic roadmap, expand into a new geographic market, or prepare for contingencies.

Align your objective with the purpose of specific business plans and see which one suits you the best.

2. Scope of business

The scope and complexity of your business play a crucial role in determining the type of business plan you require. Take into account factors like products and service offerings, the scale of the business, and the business complexity to make a choice.

Even the stage of your business, depending on whether it is a startup or an established business, will influence this decision.

Start preparing your business plan with Upmetrics

You now have a proper understanding of the different types of business. If you’re not sure which one to pick, let us help you.

Our business planning software helps create stellar business plans and saves you the pain of writing one from scratch.

You can either choose a business plan sample and follow its step-by-step instructions to prepare your functional and actionable business plan.

Don’t have enough time to write the entire thing from scratch? Go ahead with our AI business plan generator ; it will quickly generate the entire plan for you..

Simply enter your business details, answer a few questions, and see your plan coming together in front of your eyes in less than 15 minutes.

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Frequently Asked Questions

What are the 8 most common sections of a business plan.

The 8 common components of a successful business plan include

• Management team

Which type of business plan is right for me?

The answer entirely depends upon what you want to achieve with your business plan. Apart from that the scope, nature, and complexity of your business will determine the type of business plan you need.

Do I need a business plan to start a business?

A business plan is highly recommended before you kickstart your business endeavor. It builds a solid foundation for your business idea and offers a roadmap to achieve your strategic and business objectives. A well-drafted business proposal increases the chances of your business venture succeeding.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

Reach Your Goals with Accurate Planning

How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.

Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.

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Drafting the Summary

An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.

Ask for Help

When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.

After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business. 

The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.

Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.

Numbers-based Goals

Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.

Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.

Intangible Goals

Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.

The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.

If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.

This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.

You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.

Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.

Business Operations Costs

Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.

Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.

Other Costs

Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.

Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

What are some common mistakes in a business plan?

The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.

What basic items should be included in a business plan?

When writing out a business plan, you want to make sure that you cover everything related to your concept for the business,  an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.

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The 4 Types of Business Plans Learn which of these four business plan formats best fits your needs.

By Teresa Ciulla Dec 4, 2014

Opinions expressed by Entrepreneur contributors are their own.

In their book Write Your Business Plan , the staff of Entrepreneur Media offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors describe four different types of plans you could write and what you'd use each one for.

Business plans can be divided roughly into four distinct types. There are very short plans, or miniplans, presentation plans or decks, working plans, and what-if plans. They each require very different amounts of labor and not always with proportionately different results. That is to say, a more elaborate plan isn't guaranteed to be superior to an abbreviated one. Success depends on various factors and whether the right plan is used in the right setting. For example, a new hire may not want to read the same, elaborate version of your plan that might be important to a potential investor.

The Miniplan

The miniplan is preferred by many recipients because they can read it or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights while telling the same story. For a small-business venture, it's typically all that you need. For a more complex business, you may need the longer version.

The Presentation Plan

The advent of PowerPoint presentations changed the way many, if not most, plans are presented. And while the plan is shorter than its predecessors, it's not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of their business. But presenting your plan as a deck can be very powerful. Readers of a plan can't always capture your passion for the business nor can they ask questions when you finish. But in 20 minutes, you can cover all the key points and tell your story from concept and mission statement through financial forecasts.

Remember to keep your graphics uncluttered and to make comments to accentuate your ideas rather than simply reading what's in front of your audience.

While a presentation plan is concise, don't be fooled: It takes plenty of planning. The pertinent questions who, what, where, why, when and how all need to be answered.

The Working Plan

A working plan is a tool to be used to operate your business. It has to be long on detail but may be short on presentation. As with a miniplan, you can probably can afford a somewhat higher degree of candor and informality when preparing a working plan. In a plan you intend to present to a bank loan committee, you might describe a rival as "competing primarily on a price basis." In a working plan, your comment about the same competitor might be "When is Jones ever going to stop this insane price-cutting?"

A plan intended strictly for internal use may also omit some elements that you need not explain to yourself. Likewise, you probably don't need to include an appendix with resumes of key executives. Nor would a working plan especially benefit from product photos.

Internal policy considerations may guide the decision about whether to include or exclude certain information in a working plan. Many entrepreneurs are sensitive about employees knowing the precise salary the owner takes home from the business. To the extent such information can be left out of a working plan without compromising its utility, you can feel free to protect your privacy.

This document is like an old pair of khakis you wear to the office on Saturdays or that one ancient delivery truck that never seems to break down. It's there to be used, not admired.

The What-If Plan

When you face unusual circumstances, you need a variant on the working plan. For example, you might want to prepare a contingency plan when you're seeking bank financing. A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training and reduce duplicative efforts? Such what-if planning doesn't have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel and other variables so you can make good decisions.

What sets these kinds of plans apart from the working and presentation plans is that they aren't necessarily describing how you'll run the business. They're essentially more like an addendum to your actual business plan. If you decide to acquire that competitor or grow dramatically, you'll want to incorporate some of the thinking already invested in these special purpose plans into your primary business plan.

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Different Types of Business Plan Explained

Crafting a business plan is a critical step in the journey of any entrepreneur. A well-structured business plan serves as a roadmap, providing direction, attracting investors, and ensuring that all aspects of the venture are strategically considered. However, there isn’t just one universal type of business plan. Entrepreneurs and business owners must understand the different types of business plans to choose the one that best suits their specific needs and goals at various stages of their venture.

Different types of business plans are tailored to address unique circumstances and objectives. From startup business plans designed to launch new ventures to more specialized plans focusing on growth, feasibility, or financial forecasting, each type offers distinct benefits and insights. Understanding these variations can help business owners make informed decisions, anticipate challenges, and strategically position their ventures for success. Let’s delve into the different types of business plans and explore their specific uses and components.

Different Types of Business Plans: Understanding the Essentials

Creating a successful business often starts with a well-thought-out business plan. Different types of business plans serve unique purposes, guiding entrepreneurs in various stages of their journey. By understanding these distinct plans, business owners can make informed decisions and strategically navigate the ever-evolving business landscape. Here’s a closer look at the different types of business plans and their specific uses.

Startup Business Plans

A startup business plan is typically extensive, aimed at launching a new venture. It addresses the essential components required to convince potential investors or lenders of the feasibility of the business idea. This type of plan often includes:

• Executive Summary: A brief overview of the business idea and objectives.
• Market Analysis: Detailed insights into industry trends and target market demographics.
• Business Model: Explanation of how the business will operate and generate revenue.
• Marketing Strategy: Tactics for reaching the target audience and promoting products or services.
• Financial Projections: Forecasts for revenue, expenses, and profitability over time.

This type of business plan is essential for raising funds, as it provides a comprehensive roadmap that aligns with investor expectations.

Operational Business Plans

Operational business plans focus on the internal aspects of the business, detailing how day-to-day operations will be managed. These plans are typically more concise and practical than startup plans, providing clear guidelines for execution. Key components include:

• Operational Objectives: Short-term goals that align with the overall mission.
• Procedures and Processes: Step-by-step instructions for daily operations.
• Staffing Requirements: Overview of team roles and responsibilities.
• Workflow Management: Systems for tracking progress and ensuring accountability.

By establishing clear operational guidelines, businesses can enhance efficiency and adapt quickly to changes in the market.

Strategic Business Plans

Strategic business plans are broader in scope, designed to map out long-term goals and the strategies needed to achieve them. These plans are crucial for established businesses aiming to grow or enter new markets. They often encompass:

• Vision and Mission Statements: The core purpose and guiding principles of the business.
• Market Positioning: How the business intends to differentiate itself from competitors.
• SWOT Analysis: Identification of strengths, weaknesses, opportunities, and threats.
• Action Plans: Specific initiatives to reach objectives, including timeline and responsible parties.

Strategic plans help organizations to remain competitive and navigate challenges in their respective industries.

Lean Startup Plans

As the name suggests, lean startup plans are streamlined and focus on rapid iteration. This type of plan is ideal for entrepreneurs who want to test their business idea with minimal resources. Key elements include:

• Problem Statement: A clear definition of the problem the business aims to solve.
• Proposed Solution: An outline of the product or service and how it meets the identified need.
• Key Metrics: Indicators for measuring success and progress.
• Budget Overview: A simple breakdown of expected costs and funding sources.

Lean startup plans encourage flexibility, allowing entrepreneurs to pivot quickly based on feedback and market conditions.

Feasibility Business Plans

A feasibility business plan evaluates the practicality of a proposed business venture. It’s primarily used to gauge whether an idea is viable and includes:

• Market Research: Analysis of demand, competition, and target audience.
• Financial Feasibility: Initial cost assessment, break-even analysis, and return on investment.
• Technical Feasibility: Consideration of technology and resources required to implement the idea.

This type of plan is critical for determining whether to move forward with a business idea or make adjustments before investing significant resources.

Understanding these different types of business plans allows entrepreneurs and business owners to select the right approach for their specific situation. Whether launching a startup, refining operations, or steering an established company toward new markets, having a clearly defined plan is fundamental to success.

The Importance of Tailoring Your Business Plan to Audience Needs

A well-crafted business plan is an essential component of any successful venture. However, it’s not just about creating a formal document; it’s about tailoring that document to meet the needs of your specific audience. Every stakeholder has a different perspective and focus, whether they are investors, partners, or employees. Adapting your business plan to suit these diverse audiences can significantly enhance your chances of success.

Why Audience Matters

The primary goal of a business plan is to communicate your vision and strategies effectively. If your audience doesn’t connect with your message, it won’t matter how brilliant your ideas are. Understanding audience needs can lead to better engagement and investment opportunities.

Fostering Connection

Different audiences prioritize various elements of your business. Investors may look for return on investment, while partners may be more focused on operational efficiency and collaboration. By tailoring your business plan to address these specific concerns, you increase the likelihood of eliciting interest and commitment.

Types of Audiences to Consider

When preparing your business plan, consider these key audiences:

• Investors: Look for financial projections, market analysis, and growth potential. Focus on profitability and ROI.
• Employees: Highlight company culture, mission, and career development opportunities. A clear vision can motivate and retain talent.
• Partners: Discuss collaboration strategies, roles, and mutual benefits. Forming win-win partnerships is essential for sustainable growth.
• Customers: Emphasize value propositions, quality assurance, and customer support. Understanding customer needs fosters loyalty.

Crafting Tailored Content

To create relevant content, consider the following tips:

1. Research Your Audience

Before you begin writing, take time to understand who your audience is. What are their interests, pain points, and goals? The more you know, the better you can adapt your messaging.

2. Focus on Key Metrics

Include metrics and data points that resonate with your audience. For investors, present clear financial forecasts. For employees, discuss team performance and engagement metrics.

3. Use Appropriate Language

Your choice of language should align with your audience’s understanding. For instance, using technical jargon for investors might be appropriate, but simplifying concepts will be necessary for potential employees.

4. Highlight Concerns and Solutions

Address specific concerns of each audience directly. Offer solutions to their problems—be it how your business can deliver ROI for investors or how it can make work-life easier for employees.

Structuring Your Business Plan

Different types of business plans serve various purposes, depending on the audience you’re targeting. Here’s a quick overview of how you can structure your business plan:

• Traditional Business Plan: Comprehensive and detailed, suitable for investors and lenders.
• Lean Business Plan: A brief outline that covers essential elements, great for fast-paced startups wanting quick feedback.
• Pitch Deck: A visual presentation tailored for quick investor meetings, focusing on key points and visual appeal.

Adapting Over Time

Your audience’s needs may change over time. As your business evolves, so should your plan. Regularly revisiting and updating your business plan to reflect current situations keeps it relevant and effective.

Soliciting Feedback

Don’t hesitate to share your business plan drafts with trusted advisors or potential target audiences before finalizing them. Fresh perspectives can illuminate areas of improvement and ensure you are addressing stakeholder needs adequately.

The End Goal

Ultimately, the aim of tailoring your business plan to meet audience needs is to create a strong connection that leads to actionable outcomes. Whether it’s securing funding, attracting talent, or establishing partnerships, a customized plan resonates more deeply. Engage with your stakeholders. Show them you understand their needs, and they’ll be more likely to invest in your vision.

By focusing on your audience’s unique requirements and communicating effectively, you set the stage for long-term success.

How to Create a Financial Projection for Your Business Plan

Creating a financial projection for your business plan is a critical step that many entrepreneurs overlook. A solid financial projection provides insight into your business’s future, guiding decisions and attracting potential investors. If you want to ensure your business idea has traction, focus on crafting a precise financial projection.

Begin by gathering historical data if your business is already up and running. This data forms the foundation of your financial projections, allowing you to identify trends and patterns that can inform your forecasting. If you’re starting a new venture, you’ll need to rely on market research and industry standards to estimate sales, costs, and other financial metrics.

Key Components of Financial Projections

When creating financial projections, several key components should be included. Each plays a vital role in presenting a comprehensive picture of your business’s financial health:

• Sales Forecast: Estimate your expected sales volume for a specific timeframe, typically three to five years. This should be based on market research and realistic assumptions about your product or service.
• Expense Budget: Identify fixed and variable costs associated with your business operations. This includes everything from rent to salaries to marketing expenses.
• Cash Flow Projection: Determine how cash will flow in and out of your business. This is crucial for maintaining liquidity and ensuring you can meet financial obligations.
• Profit and Loss Statement: Compile a projected income statement that outlines revenues, costs, and expenses, ultimately showing your expected profit or loss over time.
• Break-Even Analysis: Calculate the point at which your business will start to generate profit, helping to identify sales targets necessary for viability.

Steps to Create Accurate Financial Projections

To ensure your financial projections are accurate and reliable, follow these steps:

1. Research Market Trends

Understanding your market is essential. Look at industry reports, competitor performance, and economic conditions that may impact your business. Utilize online databases and services like IBISWorld or Statista to gather pertinent information.

2. Develop a Sales Forecast

Create a sales forecast based on the data you’ve gathered. Consider both quantitative methods (like historical trends) and qualitative methods (such as expert opinions). Break down the forecast by month or quarter for clarity.

3. Estimate Your Expenses

List all potential expenses related to your business operations. Break them down into fixed (e.g., rent) and variable costs (e.g., raw materials). Be thorough, as missing an expense can lead to severe cash flow issues.

4. Prepare Cash Flow Statements

Cash flow statements are crucial for managing day-to-day operations. Lay out cash inflows from sales and outflows for expenses. Ensure to adjust for any expected changes in payment terms or seasonal fluctuations in sales.

5. Create Profit and Loss Statements

Combine your sales forecasts and expense estimates to create a profit and loss statement. This will show your revenue expectations and resulting profitability over your projected period.

6. Analyze Your Break-Even Point

Using the information from your profit and loss statement and expense budget, calculate your break-even point. This will help you set sales targets and understand when your business will become profitable.

Review and Adjust Your Projections

Remember, financial projections are not set in stone. Review them regularly as your circumstances change. Revisit your assumptions, update your data, and adjust your forecasts accordingly. Setting aside time for this review process will help keep your financial plan in line with actual performance, ensuring you’re prepared to pivot if necessary.

A well-prepared financial projection can significantly impact your business plan’s success. By gathering accurate data, utilizing reliable methodologies, and continually refining your projections, you’ll build a compelling financial narrative for your business that can attract investors and guide your journey forward.

Common Mistakes to Avoid When Writing a Business Plan

When embarking on the journey of writing a business plan, it can be easy to fall into a few common traps. Recognizing these pitfalls can save you time and effort while ensuring your plan stands out to investors, stakeholders, and lending institutions.

One significant mistake is failing to define your target audience. A well-crafted business plan should clearly state who your target market is. If you don’t specify your audience, your strategy might lack focus, leading to vague marketing approaches. Be sure to include demographic details, preferences, and behaviors, as this provides clarity and direction.

Another common error is to overlook the competition. Ignoring competitors can create an illusion of a perfect landscape. Dedicate a segment of your plan to analyze your competition. Highlight their strengths and weaknesses and identify opportunities where you can differentiate your business. This analysis not only demonstrates awareness but also showcases strategic planning.

Many entrepreneurs also tend to underestimate financial projections. This mistake can be detrimental. If your projections appear unrealistic, they can undermine the credibility of your plan. Instead, base your financial forecasts on solid market research and realistic assumptions. Use historical data and industry benchmarks to bolster your arguments. It’s crucial to be both optimistic and realistic—don’t project massive profits without substantiation.

Another frequent oversight involves essential details such as the executive summary. This section is crucial because it offers a snapshot of your business. Many individuals write it last, which can lead to a disjointed summary. An effective executive summary should encapsulate your main points, enticing readers to explore further. It should reflect your business vision, mission, and the unique value proposition of your offering.

Failing to identify risks can also lead to issues down the line. Every business faces uncertainties. By acknowledging potential risks, you demonstrate foresight and preparedness to investors. It helps to categorize these risks, perhaps into financial, operational, or market risks, along with the mitigation strategies you intend to implement.

Additionally, being overly complex in your language can alienate your readers. Aim for clarity and simplicity in your writing. Avoid jargon unless absolutely necessary. Remember, your business plan should be accessible to various stakeholders who may not have your industry knowledge. Clarity builds confidence and ensures your message resonates.

Another common mistake is neglecting to set clear goals and objectives. A business plan without measurable objectives is like setting sail without a destination. Clearly outline both short-term and long-term goals, with timelines attached. This not only guides your actions but also allows you to gauge your progress.

Moreover, it’s important to remember that a business plan is a living document. Some entrepreneurs write a plan, tuck it away, and forget about it. Your plan should evolve as your business grows. Regularly review and update it to reflect new insights, changing market dynamics, and your current business state. This adaptability can be crucial for ongoing success.

One mistake that can significantly dampen enthusiasm is neglecting to showcase your team. Investors are not just investing in ideas—they invest in people. Highlight the key players on your team and their qualifications. If your business has an experienced team, it adds credibility and can be a decisive factor for potential investors.

Additionally, lack of clarity in your marketing strategy can hinder your plan’s effectiveness. Clearly outline how you plan to attract and retain customers. Incorporate specific tactics, channels, and even budgets. A solid marketing strategy can make a significant difference in how your business plan is perceived.

Don’t forget to incorporate a call to action. Wrap up your business plan by inviting your readers to take the next step. Whether it’s scheduling a meeting, providing feedback, or investing, make it clear what you want them to do after reading your plan.

Steering clear of these common mistakes can vastly improve the quality of your business plan. By taking the time to clearly define your target audience, analyze competition, create realistic financial projections, and communicate effectively, you will craft a business plan that not only serves as a roadmap for your venture but also as an enticing tool for attracting support and investment. Remember to keep it updated, highlight your team, and make sure to include actionable next steps. Implementing these strategies will contribute to a stronger, more effective business plan that can help guide your entrepreneurial journey.

The Role of Market Research in Developing Your Business Plan

Every successful business begins with a solid plan, but what elevates that plan into something impactful is deep understanding. This is where market research comes into play. By investing time and resources into investigating the market, businesses can develop a business plan that truly resonates with their target audience, meets market demands, and positions themselves competitively.

Market research involves gathering information about consumer needs, preferences, and trends. It helps identify potential customers, assess competitors, and evaluate market conditions. Without this critical information, a business plan might lack direction and may not align with real-world conditions.

Understanding Your Target Audience

Market research allows businesses to segment their potential customers effectively. By comprehending who your customers are, you can tailor your products or services to meet their specific needs. Here are some elements that market research can help illuminate:

• Demographics: Understanding age, gender, income levels, and lifestyle choices of your target audience.
• Preferences: Identifying what features or qualities consumers value most in your offerings.
• Buying Behavior: Analyzing purchasing patterns to predict future purchases.
• Customer Feedback: Gathering insights through surveys and reviews to refine your product or service.

This information not only enriches your business plan but also significantly enhances marketing strategies, enabling you to hit the right notes with your messaging and outreach.

Assessing the Competitive Landscape

Another crucial aspect of market research is competitor analysis. Understanding what your competitors are doing well—and where they might be falling short—can provide you with valuable insights to carve out your own niche in the market. Here’s how market research aids in this pursuit:

• Identifying Key Players: Knowing who your major competitors are helps in benchmarking your business against theirs.
• Analyzing Strengths and Weaknesses: Understanding the strengths and weaknesses of competitors can inform your strategic decisions.
• Market Positioning: Discovering how you can differentiate yourself based on competitive offerings.

By thoroughly examining your competitors, you can better position your own business plan for success.

Evaluating Market Trends

The market constantly evolves due to various factors such as technology advancements, changes in consumer behavior, and economic fluctuations. Your business plan must respond to these trends. Engaging in market research will alert you to:

• Emerging Trends: Recognizing shifts in consumer attitudes or purchasing behaviors.
• Technological Developments: Staying abreast of new technologies that could influence your market.
• Regulatory Changes: Being aware of legal or compliance issues that might affect your business.

Adapting your business plan according to these insights will help you stay relevant and competitive in a dynamic marketplace.

Setting Realistic Goals and Projections

Data gleaned from market research contributes significantly to the financial aspects of a business plan. Understanding market size and growth potential empowers you to set attainable goals and projections. Here’s how:

• Market Size Estimation: Gauging the potential customer base and identifying target markets gives a clearer picture of revenue potential.
• Sales Forecasting: Using historical data from market research to predict future sales.
• Budgeting: Understanding market trends can help in better allocation of resources and budgeting.

With realistic goals in place, you are better equipped to navigate the challenges that lie ahead.

Refining Your Marketing Strategy

The insights gained from effective market research can also fine-tune your marketing strategy. By understanding what resonates with your audience, you can create more engaging and impactful marketing campaigns. Key aspects include:

• Tailored Messaging: Crafting messages that directly address consumer pain points and desires.
• Optimal Channels: Identifying which platforms will best reach your target audience.
• Pricing Strategy: Setting a competitive yet profitable pricing model based on market positioning.

These details into your business plan not only enhances its credibility but also sets a clear path for growth.

Market research is not just a preliminary step when developing a business plan. It is a vital component that shapes every aspect—from audience understanding and competitive analysis to the financial realities of your endeavor. Without it, your business plan may lack the depth needed to truly capture the market’s needs and navigate the intricate landscape of business successfully.

Leveraging Technology for Effective Business Plan Presentations

In today’s fast-paced business environment, the ability to deliver an impactful business plan presentation can determine the success of an initiative or securing essential funding. Leveraging technology plays a pivotal role in crafting these presentations, making them more engaging and effective. By using various tools and strategies, entrepreneurs and business leaders can communicate their vision clearly while captivating their audience.

Utilizing Visual Aids

Visual aids are crucial in enhancing the clarity and appeal of business plan presentations. They break down complex information into digestible formats, helping the audience grasp the key points quickly. Here are some effective visual aids to consider:

• PowerPoint / Google Slides: These popular tools allow users to create visually appealing slideshows filled with images, charts, and animations that complement spoken content.
• Infographics: Use infographic tools like Canva or Piktochart to summarize data and insights into easy-to-understand visual formats, which can make statistics and trends more relatable.
• Interactive Dashboards: Platforms like Tableau or Microsoft Power BI enable the presentation of real-time data analytics, allowing for dynamic discussions based on current figures.

Enhancing Engagement with Multimedia

Multimedia elements adds a dynamic flair to business presentations. Here are some multimedia options that can enhance engagement:

• Videos: Short, compelling videos can effectively convey a story or demonstrate a product. They evoke emotions and help build a connection with the audience.
• Webinars: Hosting live sessions can create an interactive platform where audiences can ask questions and engage in real-time discussions, increasing engagement.
• Podcasts: For team updates or project highlights, sharing a short podcast can be a refreshing break from traditional presentations while still communicating essential information.

Emphasizing Collaborative Tools

Collaboration is key in creating a comprehensive business plan presentation. Utilizing collaborative technology can streamline the process:

• Document Sharing: Tools like Google Drive or OneDrive allow teams to work on the same document in real-time, ensuring everyone is on the same page.
• Project Management Software: Platforms such as Trello or Asana can help track the progress of presentation development, assigning tasks efficiently and maintaining deadlines.
• Feedback Mechanisms: Utilizing tools like Slack or Microsoft Teams fosters open communication among team members, allowing for immediate feedback and adjustments.

Integrating Data Analytics for Decision Making

The backbone of any solid business plan lies in data-driven insights. Harnessing data analytics can significantly enhance strategic decision-making processes:

• Market Research Tools: Surveys and research platforms like SurveyMonkey can provide valuable information on customer preferences and market trends.
• Customer Relationship Management (CRM) Systems: By analyzing CRM data, businesses can tailor presentations to highlight how their solutions meet customer needs.
• Financial Projections Software: Tools like LivePlan or BizPlanBuilder can produce thorough financial forecasts, helping to justify funding requests during presentations.

Utilizing Cloud Technology

Cloud technology enables seamless access to presentation materials and collaboration, regardless of where team members are located. Here’s how to make the most of it:

• Accessibility: Store presentations in the cloud to ensure they are accessible from any device at any time, eliminating last-minute technical issues.
• Real-Time Updates: With cloud-based tools, any changes made can be instantly updated and synced, ensuring everyone has the latest version.
• Backup Options: Cloud storage provides peace of mind with automatic backups, so no vital data or presentation materials are lost.

Embracing technology can provide a competitive advantage when delivering business plan presentations. By utilizing visual aids, multimedia elements, collaborative tools, data analytics, and cloud solutions, presenters can create impactful and engaging presentations that resonate with their audience. With each advancement, the opportunity to captivate stakeholders and clientele becomes not just a possibility but a strategic advantage that sets a business apart in an ever-evolving marketplace.

Evaluating the Success of Your Business Plan: Metrics and KPIs

Understanding how to evaluate the success of your business plan is crucial for any entrepreneur. By setting clear metrics and Key Performance Indicators (KPIs), you can measure your organization’s performance effectively. This not only guides future decisions but also helps you stay aligned with your initial objectives. Below are some critical metrics and KPIs to consider.

Financial Metrics

One of the most straightforward ways to gauge the success of your business plan is through financial metrics. These numbers will give you a clear picture of your revenue, expenditures, and profitability. Here are essential financial metrics to track:

• Revenue Growth: This indicates how much your sales have increased over a specific period. You can calculate it by comparing current revenues to those from a previous period.
• Net Profit Margin: This percentage measures how much profit your business makes for every dollar of revenue. A higher margin indicates better efficiency in turning sales into actual profit.
• Cash Flow: Monitoring your cash flow ensures that your business can sustain day-to-day operations. Positive cash flow means you have more incoming funds than outgoing.

Customer Satisfaction and Retention Metrics

After all, a business thrives on its customers. Understanding customer behavior and satisfaction is integral to evaluating your business strategy. Here are some key metrics to consider:

• Net Promoter Score (NPS): This measures customer loyalty by asking how likely customers are to recommend your business to others. A high NPS indicates a strong customer base.
• Customer Retention Rate: This metric assesses how well your business keeps its customers over time. A high retention rate suggests that your product or service consistently meets customer needs.
• Customer Lifetime Value (CLV): CLV predicts the total amount of money a customer is expected to spend in your business throughout their lifetime. This metric helps identify which customer segments are most valuable.

Operational Efficiency Metrics

Operational efficiency can reveal much about how well your business executes its plans. Evaluate the following areas:

• Employee Productivity: Analyze employee output in relation to their working hours. High productivity can signify good management and team engagement.
• Inventory Turnover Rate: This measures how efficiently you manage your inventory. A high turnover indicates strong sales, as products are moving quickly off the shelves.
• Time to Market: Evaluate how quickly you can develop new products or services and deliver them to customers. Faster cycles can lead to competitive advantages in your industry.

Market Performance Metrics

Evaluating your position in the market is vital. It helps you understand how you stack up against your competitors. Here are pertinent metrics:

• Market Share: This measures the percentage of total sales in your industry that your business accounts for. A larger market share often indicates that your business is outperforming competitors.
• Brand Awareness: This can be gauged through surveys and online metrics. A strong brand presence usually correlates with increased sales and customer loyalty.
• Sales Growth Rate: This metric tracks the rate at which your sales revenue is increasing over specific periods. Consistent growth signifies effective marketing and sales strategies.

Evaluating your business plan using these metrics and KPIs will provide you with valuable insights into areas of strength and opportunities for improvement. Make it a regular practice to review these metrics to adapt and refine your strategies accordingly. A structured approach to measurement will empower your business to pivot as needed, ensuring you remain on a path toward success.

These indicators into your regular reporting and strategic planning will facilitate a holistic view of your business performance. By focusing on metrics that matter, you can achieve a responsive, resilient, and ultimately successful business trajectory.

A well-structured business plan is not just a document; it serves as a roadmap that can significantly shape the trajectory of your business. It is crucial to recognize that different types of business plans cater to various audiences and purposes. By understanding these essentials, you can ensure your plan resonates with stakeholders, investors, and team members. Whether it’s a detailed operational plan or a concise pitch deck, each type fulfills a specific function and communicates valuable information in unique ways.

Tailoring your business plan to meet audience needs is paramount in its effectiveness. For instance, while potential investors may seek comprehensive financial data and market analysis, a business partner might focus more on operational strategies and team dynamics. By customizing your plan to reflect the interests and concerns of your audience, you enhance your chances of capturing their attention and securing their support. Engaging content and clear communication are vital elements that should not be overlooked.

Financial projections are another crucial component of your business plan. Crafting these projections requires careful analysis and realistic assumptions. They not only demonstrate your understanding of your market and operational capacity but also instill confidence in investors. Solid financial forecasts help position your business as a viable opportunity, illustrating your potential for growth and profitability. You must incorporate various financial metrics, such as profit margins and revenue streams, to create a comprehensive picture that supports your business narrative.

However, common mistakes often plague first-time business plan writers. Overlooking market research can be detrimental; failing to substantiate your claims with data leaves your plan vulnerable. Additionally, being overly optimistic in financial projections can mislead stakeholders and erode credibility. Ensuing clarity and coherence is vital; complex jargon or lengthy explanations dilute the essence of your business plan. Brevity, combined with clarity, is golden. A focused, straightforward approach not only improves readability but also enhances comprehension, making it easier for readers to grasp your business’s potential quickly.

Market research should play a pivotal role in developing your business plan. It provides a robust foundation that informs all aspects of your proposal, from identifying your target audience to positioning your products or services. Careful analysis of competitors and potential market trends allows you to pinpoint opportunities and challenges, creating a balanced view that stakeholders appreciate. The more informed your market insights, the more compelling your business strategy will be.

In this digital age, leveraging technology can significantly enhance the effectiveness of your business plan presentations. Tools like data visualization software can illustrate complex financial data, while slide presentation software can help articulate your business strategy visually and engagingly. Emphasizing clarity through technology enables you to communicate your ideas persuasively. Investors are likely to remember well-presented data far better than mountains of figures buried in text-heavy documents.

Evaluating the success of your business plan is equally crucial to your long-term strategy. Establishing clear metrics and key performance indicators (KPIs) from the outset allows you to measure progress and adapt as necessary. This proactive evaluation helps you pinpoint areas that require adjustment and ensures you’re on course towards your overarching goals. Regular assessments foster an environment of accountability and enable you to celebrate milestones, boosting morale among team members.

A comprehensive understanding of these various components ensures that your business plan serves as a valuable tool rather than merely a formality. Whether you’re starting a new venture, seeking investment, or outlining strategic growth, the depth and focus of your plan is paramount. Prioritizing audience needs, supporting your claims with rigorous data, and leveraging technology to present your ideas clearly can substantially enhance your business plan’s effectiveness.

All in all, if you commit to understanding the various types of business plans and the key factors that contribute to their success, you’ll position your business for growth and sustainability. As you embark on this journey, remember that your business plan is a living document. Regular updates in response to changing market conditions, challenges, and opportunities ensure that it remains relevant and effective in guiding your business to success.

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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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.

Table of Contents

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

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

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

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

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

This isn’t surprising at all. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here are the key elements of a good business plan:

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

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

• Business Sorter

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

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

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

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

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

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

What Is Meant by Business Planning?

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

What Are the 4 Types of Business Plans?

The following are the four types of business plans:

Operational Planning

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

Strategic Planning

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

Tactical Planning

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

Contingency Planning

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

What Are the 7 Steps of a Business Plan?

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

Conduct Research

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

Have a Goal

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

Create a Company Profile

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

Describe the Company in Detail

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

Create a marketing plan ahead of time.

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

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

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

Incorporate Your Motivation

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

What Are the Basic Steps in Business Planning?

These are the basic steps in business planning:

Summary and Objectives

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

Services and Products

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

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

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

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

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

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The three types of business plans for most industries

Business plans are a crucial component in the success of any business, but different industries require different models. When deciding upon which plan is best for your company, you should consider what type of industry you’re in and your goals.

Three types of business plans

Wrapping up.

You should also understand that business plans can go by different names. Some have different names but are essentially the same thing, while others genuinely are different in terms of content. You might see operational plans, Lean plans, Strategic plans, internal plans, and more.

The truth is that the kind of business plan you should put together depends on the situation. Form follows function. The best business plans match the use for which they are intended. In the article below, we’ll list three different business plan models used by many companies today.

The following is a list of business plans used commonly in most industries today.

Startup plan

According to the Startup Genome Report , most startups fail. In many instances, that failure is due to a lack of market understanding, no clear vision, and little planning. A startup business plan is intended to provide a roadmap that can help entrepreneurs steer clear of the mistakes that lead to failure.

For example, a startup plan focuses on funding, market size analysis, team building strategy, or product development strategy. Indeed, these are all critical aspects for success when starting a business.

Additionally, a startup plan usually operates as the very first plan an entrepreneur develops to give to investors in order to gain funding and to show how the business intends to grow. If you’re just starting out, your plan should include the following elements and structure:

• Executive summary
• Overview of the company
• Management background
• What service or product the company provides
• Value proposition
• Strategic marketing plan
• Market evaluations
• Projected startup costs
• Cash flow projections and income and profit expectations

Inside the financial section, you should also explain your exit strategy and how you plan to use any money that you raise from investors.

Strategic plan

In general, you’ll use a strategic business plan for internal purposes only. It’s not a document that you’ll be showing to investors or anyone outside of your company. You’ll need to create a document that acts as a foundational plan for your whole organization in this plan.

Standard practices when creating this type of plan include assessing the strengths and weaknesses of your company. Therefore, using a SWOT analysis when putting the plan together is a smart move. SWOT is an acronym. It stands for strengths, weaknesses, opportunities, and threats. It gives you and executives in your company a broad awareness of various factors that could impact your business.

Typically, a strategic plan will also include an outline with defined milestones and a path leading to specific company goals. There should also be a deadline to reach those goals. Remember that a strategic plan is different from just a business plan at the end of the day. A strategic business plan will focus on your company’s ultimate goals and how you’re going to get there.

Your strategic business plan ought to include the following elements and structure:

• Company mission statement
• Company vision
• Key factors for company success
• Strategies to meet goals
• Implementation deadline

Operations plan

This is a different type of business plan, but it’s still essential. An operations plan will outline the day-to-day resources and activities that are needed to run your company efficiently. It should take into account what needs to be done and when.

It can also help you anticipate any problems that may arise by anticipating common issues before they happen. This way, you’ll have time to come up with solutions or get in contact with someone who can help if anything goes wrong. You’ll want an operations plan so you’re prepared for things like slow periods where product orders might not meet expectations, or to know how many products need different types of maintenance during different times of the year because temperature changes affect them differently (think winter coats).

Your operations plan should include the following elements and structure:

• Organization objectives
• Activities required to complete objectives
• Resources needed for activities
• Staffing requirements
• Implementation deadlines
• Progress tracking processes

The different types of business plans are how companies present their long-term vision, management strategy, and goals for the future. The type of plan you put together is dependent on your industry – but as we’ve discussed, there are always a few core elements to all typical business plan models. These include an organization’s objectives, activities required to complete these objectives; resources needed for those activities; staff requirements (including skillsets); implementation deadlines & progress tracking processes.

Hopefully, this article has provided some new insight into how different business plans are used to produce and guide successful businesses.

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• Business plans

Everyone loves pizza, and so do you. That is why you want to do your local pizza bar that everyone will enjoy. You love to see the joy come across people's faces as you give them your homemade pizza. You also enjoy mixing drinks as part of your hobby, so have an idea of a bar and a pizza place where people can come to hang out with friends. You want to have a space that gives people happiness. You want to be the place where celebrations and events will be taken place. You want to enjoy having your place.

The items listed above will introduce a great start for your career. You get to share your delicious homemade pizza with your customers. You want to have a comfortable environment where you can introduce live music and cheer. Your business will continue to flourish with ease as not only a bar but a place where people can go with their friends, family, and their partners. You will be the place where the night is young with a lighted area where customers can sit outdoors. All you need is ideas, your recipe, and the supplies that you need to start your business.

Are you a person who just got a business degree? Do you want to start a business that helps others feel at home? You like to sell things that people need to make their homes clean and decorative. You know that homes reflect the owners' personality, and you want to give new homeowners the chance to decorate their new homes. To start helping others, you must decorate your building with home goods, knickknacks, and supplies. You know what customers are looking for and where they could get it, which is when your business comes in to give homeowners the supplies they need for their new home.

The items listed above are not only items you will sell but the items that you need to start your career off on the right track. You questioned how to start your business with an idea. The first idea is to organize and clean the building that will be the place for your business. You will also be selling items that homeowners need and that you will be using for your new business. You do not have to worry about starting your business blindly, some simple tasks and items will guide you to your journey to a successful career. You will be able to enjoy your first local business.

• Business Guides

You suddenly have a fun idea to show off your creative coffee and tea recipes. Why not start a coffee and tea shop? Coffee and tea shops are popular during modern times. People enjoy a nice cup of coffee or tea to start their day. You might even want to start with your food recipes and share them with the world. You do not have to worry about starting your coffee and tea business without any items. You can enjoy decorating and getting the items that you need to start your new business. You get to enjoy your wonderful coffee shop.

Your coffee and tea shop will start with a positive path to success. You get to choose and create your menu with the food you love to create. Your customers will enjoy your positive energy, and they will never want to leave. You will have that delicious scent of coffee and tea that your customers will not resist. You will host events such as poetry readings, musicians, and artists to promote your business. You will also help local artists succeed as they will help you succeed in your local business. You will enjoy your coffee shop and the career path that you have chosen.

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7 Business Plan Examples to Inspire Your Own (2024)

Need support creating your business plan? Check out these business plan examples for inspiration.

Any aspiring entrepreneur researching how to start a business will likely be advised to write a business plan. But few resources provide business plan examples to really guide you through writing one of your own.

Here are some real-world and illustrative business plan examples to help you craft your business plan .

7 business plan examples: section by section

The business plan examples in this article follow this template:

• Executive summary.  An introductory overview of your business.
• Company description.  A more in-depth and detailed description of your business and why it exists.
• Market analysis.  Research-based information about the industry and your target market.
• Products and services.  What you plan to offer in exchange for money.
• Marketing plan.   The promotional strategy to introduce your business to the world and drive sales.
• Logistics and operations plan.  Everything that happens in the background to make your business function properly.
• Financial plan.  A breakdown of your numbers to show what you need to get started as well as to prove viability of profitability.
• Executive summary

Your  executive summary  is a page that gives a high-level overview of the rest of your business plan. It’s easiest to save this section for last.

In this  free business plan template , the executive summary is four paragraphs and takes a little over half a page:

• Company description

You might repurpose your company description elsewhere, like on your About page, social media profile pages, or other properties that require a boilerplate description of your small business.

Soap brand ORRIS  has a blurb on its About page that could easily be repurposed for the company description section of its business plan.

You can also go more in-depth with your company overview and include the following sections, like in the example for Paw Print Post:

• Business structure.  This section outlines how you  registered your business —as an  LLC , sole proprietorship, corporation, or other  business type . “Paw Print Post will operate as a sole proprietorship run by the owner, Jane Matthews.”
• Nature of the business.  “Paw Print Post sells unique, one-of-a-kind digitally printed cards that are customized with a pet’s unique paw prints.”
• Industry.  “Paw Print Post operates primarily in the pet industry and sells goods that could also be categorized as part of the greeting card industry.”
• Background information.  “Jane Matthews, the founder of Paw Print Post, has a long history in the pet industry and working with animals, and was recently trained as a graphic designer. She’s combining those two loves to capture a niche in the market: unique greeting cards customized with a pet’s paw prints, without needing to resort to the traditional (and messy) options of casting your pet’s prints in plaster or using pet-safe ink to have them stamp their ‘signature.’”
• Business objectives.  “Jane will have Paw Print Post ready to launch at the Big Important Pet Expo in Toronto to get the word out among industry players and consumers alike. After two years in business, Jane aims to drive $150,000 in annual revenue from the sale of Paw Print Post’s signature greeting cards and have expanded into two new product categories.”
• Team.  “Jane Matthews is the sole full-time employee of Paw Print Post but hires contractors as needed to support her workflow and fill gaps in her skill set. Notably, Paw Print Post has a standing contract for five hours a week of virtual assistant support with Virtual Assistants Pro.”

Your  mission statement  may also make an appearance here.  Passionfruit  shares its mission statement on its company website, and it would also work well in its example business plan.

• Market analysis

The market analysis consists of research about supply and demand, your target demographics, industry trends, and the competitive landscape. You might run a SWOT analysis and include that in your business plan. 

Here’s an example  SWOT analysis  for an online tailored-shirt business:

You’ll also want to do a  competitive analysis  as part of the market research component of your business plan. This will tell you who you’re up against and give you ideas on how to differentiate your brand. A broad competitive analysis might include:

• Target customers
• Unique value add  or what sets their products apart
• Sales pitch
• Price points  for products
• Shipping  policy
• Products and services

This section of your business plan describes your offerings—which products and services do you sell to your customers? Here’s an example for Paw Print Post:

• Marketing plan

It’s always a good idea to develop a marketing plan  before you launch your business. Your marketing plan shows how you’ll get the word out about your business, and it’s an essential component of your business plan as well.

The Paw Print Post focuses on four Ps: price, product, promotion, and place. However, you can take a different approach with your marketing plan. Maybe you can pull from your existing  marketing strategy , or maybe you break it down by the different marketing channels. Whatever approach you take, your marketing plan should describe how you intend to promote your business and offerings to potential customers.

• Logistics and operations plan

The Paw Print Post example considered suppliers, production, facilities, equipment, shipping and fulfillment, and inventory.

Financial plan

The financial plan provides a breakdown of sales, revenue, profit, expenses, and other relevant financial metrics related to funding and profiting from your business.

Ecommerce brand  Nature’s Candy’s financial plan  breaks down predicted revenue, expenses, and net profit in graphs.

It then dives deeper into the financials to include:

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

You can use this financial plan spreadsheet to build your own financial statements, including income statement, balance sheet, and cash-flow statement.

Types of business plans, and what to include for each

A one-page business plan is meant to be high level and easy to understand at a glance. You’ll want to include all of the sections, but make sure they’re truncated and summarized:

• Executive summary: truncated
• Market analysis: summarized
• Products and services: summarized
• Marketing plan: summarized
• Logistics and operations plan: summarized
• Financials: summarized

A startup business plan is for a new business. Typically, these plans are developed and shared to secure  outside funding . As such, there’s a bigger focus on the financials, as well as on other sections that determine viability of your business idea—market research, for example.

• Market analysis: in-depth
• Financials: in-depth

Your internal business plan is meant to keep your team on the same page and aligned toward the same goal.

A strategic, or growth, business plan is a bigger picture, more-long-term look at your business. As such, the forecasts tend to look further into the future, and growth and revenue goals may be higher. Essentially, you want to use all the sections you would in a normal business plan and build upon each.

• Market analysis: comprehensive outlook
• Products and services: for launch and expansion
• Marketing plan: comprehensive outlook
• Logistics and operations plan: comprehensive outlook
• Financials: comprehensive outlook

Feasibility

Your feasibility business plan is sort of a pre-business plan—many refer to it as simply a feasibility study. This plan essentially lays the groundwork and validates that it’s worth the effort to make a full business plan for your idea. As such, it’s mostly centered around research.

Set yourself up for success as a business owner

Building a good business plan serves as a roadmap you can use for your ecommerce business at launch and as you reach each of your business goals. Business plans create accountability for entrepreneurs and synergy among teams, regardless of your  business model .

Kickstart your ecommerce business and set yourself up for success with an intentional business planning process—and with the sample business plans above to guide your own path.

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Business plan examples FAQ

How do i write a simple business plan, what is the best format to write a business plan, what are the 4 key elements of a business plan.

• Executive summary: A concise overview of the company's mission, goals, target audience, and financial objectives.
• Business description: A description of the company's purpose, operations, products and services, target markets, and competitive landscape.
• Market analysis: An analysis of the industry, market trends, potential customers, and competitors.
• Financial plan: A detailed description of the company's financial forecasts and strategies.

What are the 3 main points of a business plan?

• Concept: Your concept should explain the purpose of your business and provide an overall summary of what you intend to accomplish.
• Contents: Your content should include details about the products and services you provide, your target market, and your competition.
• Cashflow: Your cash flow section should include information about your expected cash inflows and outflows, such as capital investments, operating costs, and revenue projections.

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17.3 Types of Plans

• Identify different types of plans and control systems employed by organizations.

From an activity perspective, organizations are relatively complex systems, as they are involved in numerous activities. Many of these activities require management’s attention from both a planning and controlling perspective. Managers therefore create different types of plans to guide operations and to monitor and control organizational activities. In this section, we introduce several commonly used plans. The major categories are hierarchical, frequency-of-use (repetitiveness), time-frame, organizational scope, and contingency. Table 17.1 provides a closer look at many types of plans that fall in each of these categories.

Hierarchical Plans

Organizations can be viewed as a three-layer cake, with its three levels of organizational needs. Each of the three levels—institutional, administrative, and technical core—is associated with a particular type of plan. As revealed in Table 17.1 , the three types of hierarchical plans are strategic, administrative, and operating (technical core). The three hierarchical plans are interdependent, as they support the fulfillment of the three organizational needs. In the organization’s hierarchy, the technical core plans day-to-day operations.

Strategic Plans

Strategic management is that part of the management process concerned with the overall integration of an organization’s internal divisions while simultaneously integrating the organization with its external environment. Strategic management formulates and implements tactics that try to match an organization as closely as possible to its task environment for the purpose of meeting its objectives.

Strategic plans address the organization’s institutional-level needs. Strategic plans outline a long-term vision for the organization. They specify the organization’s reason for being, its strategic objectives, and its operational strategies—the action statements that specify how the organization’s strategic goals are to be achieved.

Part of strategic planning involves creating the organization’s mission, a statement that specifies an organization’s reason for being and answers the question “What business(es) should we undertake?” The mission and the strategic plan are major guiding documents for activities that the organization pursues. Strategic plans have several defining characteristics: They are long-term and position an organization within its task environment; they are pervasive and cover many organizational activities; they integrate, guide, and control activities for the immediate and the long term; and they establish boundaries for managerial decision-making.

Operating plans provide direction and action statements for activities in the organization’s technical core. Administrative plans work to integrate institutional-level plans with the operating plans and tie together all of the plans created for the organization’s technical core.

Frequency-of-Use Plans

Another category of plans is frequency-of-use plans. Some plans are used repeatedly; others are used for a single purpose. Standing plans , such as rules, policies, and procedures, are designed to cover issues that managers face repeatedly. For example, managers may be concerned about tardiness, a problem that may occur often in the entire work force. These managers might decide to develop a standing policy to be implemented automatically each time an employee is late for work. The procedure invoked under such a standing plan is called a standard operating procedure (SOP).

Single-use plans are developed for unique situations or problems and are usually replaced after one use. Managers generally use three types of single-use plans: programs, projects, and budgets. See Table 17.1 for a brief description of standing and single-use plans.

Time-Frame Plans

The organization’s need to address the future is captured by its time-frame plans. This need to address the future through planning is reflected in short-, medium-, and long-range plans. Given the uniqueness of industries and the different time orientations of societies—study Hofstede’s differentiation of cultures around the world in terms of their orientation toward the future—the times captured by short, medium, and long range vary tremendously across organizations of the world. Konosuke Matsushita’s 250-year plan, which he developed for the company that bears his name, is not exactly typical of the long-range plans of U.S. companies!

Short-, medium-, and long-range plans differ in more ways than the time they cover. Typically, the further a plan projects into the future, the more uncertainty planners encounter. As a consequence, long-range plans are usually less specific than shorter-range plans. Also, long-range plans are usually less formal, less detailed, and more flexible than short-range plans in order to accommodate such uncertainty. Long-range plans also tend to be more directional in nature.

Organizational Scope Plans

Plans vary in scope. Some plans focus on an entire organization. For example, the president of the University of Minnesota advanced a plan to make the university one of the top five educational institutions in the United States. This strategic plan focuses on the entire institution. Other plans are narrower in scope and concentrate on a subset of organizational activities or operating units, such as the food services unit of the university. For further insight into organizational scope plans, see Table 17.1 .

Contingency Plans

Organizations often engage in contingency planning (also referred to as scenario or “what if” planning). You will recall that the planning process is based on certain premises about what is likely to happen in an organization’s environment. Contingency plans are created to deal with what might happen if these assumptions turn out to be wrong. Contingency planning is thus the development of alternative courses of action to be implemented if events disrupt a planned course of action. A contingency plan allows management to act immediately if an unplanned occurrence, such as a strike, boycott, natural disaster, or major economic shift, renders existing plans inoperable or inappropriate. For example, airlines develop contingency plans to deal with terrorism and air tragedies. Most contingency plans are never implemented, but when needed, they are of crucial importance.

Concept Check

• Define and describe the different types of plans defined in Table 17.1 and how organizations use them.

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• Book title: Principles of Management
• Publication date: Mar 20, 2019
• Location: Houston, Texas
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• Three Different Types Of Business Plans 

by James Burgess | May 15, 2020 | Business Planning | 0 comments

Business Plans guide the management, owners, and investors as businesses start-up and grow. A business owner or prospective business owner composes a Business Plan to shed light on each aspect of his business, describing all the objectives that will anticipate and prepare it for its growth. Business owners create Business Plans to guide management and promote investment capital.

• Operational Business Plan

First is the Operational Business Plan. It is intended for internal use in an ongoing business. This is used mainly by the management, board of directors, and high-level advisors. Since this is used to focus and align the efforts of the managers in the company to achieve their business goals, it should be updated Quarterly  

An Operational Business Plan is the master blueprint which ties your budget and department plans. Inside your operational plan are Company Direction, plans for Products or Services, Sales, Marketing, and Finance, and Administration. Being able to create a great operational plan is the foundation for  running a viable business successfully.

• Summary Business Plan

You can also use a Summary Business Plan for inviting investors, small to moderate banks to offer you a loan, or to attract essential employees. A typical Summary Business Plan could run between 3-5 pages.

• Complete Business Plan

Lastly is a Complete Business Plan. Like a Summary Business Plan, this is also for external use. This is important if you are seeking a significant amount of funding – opposite with the previous business plan. You would want to show your readers the full picture of your business. A Complete Business Plan can be around 40 pages or more and invariably includes Financial Statement Projections for 3 to 5 years and Monthly Cash Flow projections over the same period.  You also need to show in these projections why the funding is needed or how it will be used.

In this type of business plan, you need to explain your business ideas in detail to potential backers or investors, strategic partners or even potential buyers of your company, if you’re selling. This should clearly state the specific requests you’re making with your business plan and what your company can bring to the table.

The vast majority of Businesses will typically benefit massively from having the Operational Business Plan.  The fear in creating such a Business Plan is the time required.  The FOCUS Yourself; A 7-Module Business Planning Program referenced below under What’s Your Next Step is a templated Business Planning system thatmakes an OPerational Business Plan EASY & FAST and it so happens it’s FREE too.  

WHAT’S THE NEXT STEP?

2. Use our FREE Business Planning Course, FOCUS Yourself; A 7 Module Business Plan Course . This is not a business plan template, it is a full Business Plan Course that provides Best Practice Business Planning insights PLUS enables you to create your Best Practice Business Plan on your own dedicated, password protected Workspace. Start your Business Plan   NOW

3. Join our Business Planning Masterclass, How To Create An Annual Business Plan In JUST …28.7.   Register for this Business Planning Masterclass HERE

4. Not sure why you need a Business Plan? Then REGISTER for a FREE Business Vision Quest. Call where you will talk business, your business, with international best-selling author James Burgess. Book that call right HERE

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How to Draft a Business Plan

Updated on 13 August 2024

A business plan is something that you will use over and over again. From testing your idea to applying for a loan and ensuring that your ideas align internally, a business plan acts as the tool that communicates the what, where, why and how of your enterprise. So, let’s take a look at how to draft a business plan.

A business plan is the document that investors use to determine if a business is worth investing in, and what business owners use to spot any weaknesses they need to address . It is a common structure to lay out the ideas of a venture so they can easily be communicated. Here are some reasons to have a business plan in place:

• Strategic planning by clarifying ideas and understanding the resources required.
• Evaluating ideas by seeing them on paper.
• Researching customer and competitor profiles.
• Make recruiting easier by communicating the company vision to potential employees.
• Propose ideas for partnerships by showing brands your vision.

If you’re looking for a structured way to lay out your thoughts and ideas, and to share those ideas with people who can have a big impact on your success, a business plan is an excellent starting point.

Types of Business Plans

It’s important to note that multiple kinds of business plans exist. These fall into two main categories : traditional or lean start-up.

Traditional Business Plans

This type is the more common business plan. It is also the structure that most people are used to seeing. The traditional business plans explains each section in more detail and therefore are often much longer. Your business will present this document when applying for a loan or asking investors to invest.

Lean Start-up Business Plans

Following this less common example, lean start-up business plans follow the standard structure but rely more on summaries. The most important points are highlighted and due to its short form, can be constructed within hours. This is the plan that communicates ideas on a high level.

Elements of a Business Plan

There are essential parts of a business plan that you need to include . These consist of:

• An executive summary
• A business description
• Market description
• Organisation and management
• Products or services offered
• Marketing plan
• Funding requirements
• Financial projections
• Risk analysis

How to Choose the Right Business Plan for Your Business

Choosing the right business plan is vital in ensuring that you communicate the right information in the right way to the right channel. You can determine this by taking a look at the function it will serve. Here are the functions of a business plan and the audience who will see it .

Lean Business Plan For An Internal Audience. Its function is to serve as a loose guide of objectives and timeline. It also has another function as a means to test the idea when you are launching your start-up.

Traditional Business Plan For An Internal Audience. Its function is to serve as a detailed, brass-tacks blueprint of business goals and timelines that will guide management.

Strategic Business Plan For An Internal Audience. Its function is to serve as a strategic document with a narrative focus on organisation-wide goals, priorities, and vision. This will guide internal stakeholders in the right direction.

Traditional Business Plan For An External Audience. Its function is usually to serve as a way to help earn a company loan or grant, especially when it focuses on financial documents.

Traditional or Strategic Business Plan for an External Audience. When the business plan is more strategic, it is used to attract investors or potential partners. For this reason, it focuses on both financial aspects and support departments such as sales and marketing.

When creating a business plan, you can use the elements that are relevant to your business. You can also change the structure of the business plan, as long as you start with the executive summary.

Now that you know how to draft a business plan, and in which instances what type will be more useful, you are ready to create your own document. Do you want to skip the hassle? Download the free template .

Starting a business is full of uncertainties, but you don’t need to struggle alone. Ask for help, ask a mentor.

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• Culture and Business Transformation

7 key types of business risk every leader should plan for (2024 update)

• August 23, 2024

3. Compliance risk

How familiar are you with the laws and regulations that apply to your business? Compliance can be tricky for many reasons. Compliance risks represent a critical challenge for businesses operating in today’s highly regulated environment. Failure to adhere to industry regulations, data protection laws, and corporate governance standards can have significant legal and financial consequences. Non-compliance may lead to hefty fines, legal battles, and damage to a company’s credibility.

Recently, the Ministry of Manpower (MOM) in Singapore introduced the Complementary Assessment Framework (COMPASS) , which requires employers to offer clear career development pathways for foreign employees. This underscores the importance of businesses understanding and navigating these evolving regulations. To mitigate compliance risks related to COMPASS, it is crucial to implement robust employment verification strategies, including thorough background screening and employment history checks, ensuring adherence to current and new regulatory requirements.

4. Financial or economic risk

Financial or economic risk is closely related to business profits, so investors and shareholders often scrutinise it. Financial risks are caused by multiple factors, such as market movements, foreign currency exchange rates, commodity price fluctuations, etc. Strategies to mitigate financial or economic risk usually aim to ease cash flow issues, and common tactics include getting insurance, diversifying income streams, and limiting the amount or tenure of loans.

5. Reputational risks

Reputational risk involves the potential damage to a company’s public image and brand value, which can arise from various incidents, including unethical breaches, product failures, or poor customer service. Social media exacerbates this risk by amplifying the impact of any negative event. For instance, in 2017, United Airlines faced a severe reputational crisis when a video of a passenger being forcibly removed from an overbooked flight went viral. This incident led to widespread media condemnation and public outrage, significantly damaging the airline’s reputation. In such a highly connected environment, even a single misstep can quickly escalate, underscoring the importance of proactive reputation management.

6. Geopolitical risks

Geopolitical risks can significantly impact supply chains, as political instability, trade disputes, and international sanctions disrupt the flow of goods and materials across borders. The ongoing conflict between Russia and Ukraine serves as a stark example of such disruptions. The war has severely affected global supply chains , particularly in sectors reliant on key exports like grain and energy. For instance, companies worldwide have faced shortages and price increases for agricultural products due to the blockade of Ukrainian ports and the destruction of infrastructure. Additionally, disruptions in energy supplies from Russia have led to increased costs and supply uncertainties for industries dependent on natural gas and oil.

7. Hiring risk

When hiring, one of the most critical risks businesses face is the potential for hiring the wrong person, which can lead to significant consequences. A notable example of this risk is the case of a Nanyang Technological University (NTU) dropout who forged a bachelor’s degree in engineering and deceived companies, securing positions in The Walt Disney Company, Marshall Cavendish, and Scholastic Education International. It is shocking easily to get a fake university degree, a recent investigation by a Singapore news media reported.

Organisations can protect themselves from potential financial losses, reputational damage, and operational disruptions by ensuring candidates’ authenticity and qualifications.

How to minimise business risk

To effectively manage risks and ensure long-term stability, organisations must work towards getting the basics of risk management strategies right . Some essential actions include:

• Establish a comprehensive risk management framework that integrates risk identification, assessment, and mitigation processes across all levels of the organisation.
• Monitor and review your risk management strategies to adapt to evolving risks and ensure your controls remain effective.
• Cultivate a risk-aware culture by promoting clear communication, ongoing training, and accountability among all employees.
• Conduct background checks on potential employees.

Understandably, most businesses don’t have the time, know-how, and manpower to dedicate to thorough intelligence gathering. There’s also the grey area of privacy laws to consider – how much is a company allowed to dig into their potential hires or partners? In such cases, trusting a specialist and market leader like RMI to do the legwork for you can be the most cost-effective solution. Contact us to learn more about our solutions.

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