business plan 2020

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Start » startup, writing a business plan here's how to do it, section by section.

Looking to develop a business plan for your new venture? Here's what to include in each section.

At the foundation of every strong business is a solid business plan. A business plan outlines important information regarding a company's operations and goals and serves as a blueprint for achieving those goals. This document helps entrepreneurs plan and research their venture thoroughly and demonstrates to investors the viability of the business.

If you're looking to develop a business plan for your new venture, including all the necessary information is important. Here are the nine sections to include in a strong business plan, as well as some best practices to make your plan work for you.

Executive summary

Your business plan begins with an executive summary, which outlines what your company is about and why it will succeed. This section includes your mission statement, a brief description of the product or service you are offering, a summary of your plans, and basic logistical details about your team.

Some entrepreneurs write their executive summary last, even though it's the first section of the plan. An executive summary is just that: a summary. Leaving it for last means you have a better sense of the information within the plan that needs to be highlighted right away.

Company description

Your company description should further detail the logistics of your business, such as its registered name, address, and key people involved. Here, you should also provide specific information about your product or service, including whom your business serves and what problem you solve for that population.

This section can also be an opportunity to describe some of the more intangible aspects of your business, such as your principles, ideals, and cultural philosophies. In your company description section write about your brand values, long- and short-term goals, and vision or mission.

"Your statement should explain, in a convincing manner, why your business exists, and should be no longer than a single sentence," wrote Shopify .

Market analysis

Conducting thorough market research can help you understand the nature of your industry as well as how to stand out from competitors.

"Simply put, your market analysis shows that you've done your research," wrote NerdWallet . "Overall, a market analysis will yield invaluable data if you have limited knowledge about your market, the market has fierce competition, and if you require a business loan."

Consider any emerging trends or themes, what other successful businesses in the field are doing (or failing to do), and how your business can do better. Include a summary of your research findings in this section.

[Read more: How to Conduct a Market Analysis ]

Organization and management

This section should include your business's legal structure — for example, whether you are incorporating as an S or C corporation, forming a partnership, or operating as a limited liability company (LLC) or sole proprietor. Detail the type of entity you plan to form as well as what licenses you need, where you plan to register, and any permits you plan on getting.

Investors also want to know who is in charge of your entity. "Many investors say they bet on the team behind a business more than the business idea, trusting that talented and experienced people will be capable of bringing sound business concepts to life," wrote Bank of America .

If you have a leadership team in place, detail the roles and expertise of each member, including each relevant individual’s percent of ownership and the extent of their involvement. If you're still considering hiring, identify the roles for which you will hire and your timeline for doing so.

Products/services

Your product or service is the crux of your business idea, so you want to make a strong case for its purpose and role in the market. Use this section to elaborate on your product or service throughout its life cycle, including the following:

• How it works.
• Whom it serves.
• What it costs.
• Why it is better than the competition.

If you have pending or current intellectual property, include this information. In this section, you can also provide details of any research and development for your product or service.

As you write your business plan, think of it as a flexible road map built to adjust to your business journey.

Marketing and sales

In this section, explain your marketing and sales strategies and how you will execute them. (Note that these strategies will likely evolve, and you can always adjust as needed.)

This section is where you identify your ideal customer, discuss how you will reach them, and describe how your messaging will resonate with this audience. Describe how you will attract and retain your customer base, including what makes you stand out from competitors, and detail the actual sales process.

Use data from your market analysis section as evidence in your marketing and sales strategy. "Your marketing efforts are directly informed by your ideal customer. That's why, as you outline your current decisions and future strategy, your marketing plan should keep a sharp focus on how your business idea is a fit for that ideal customer," wrote Shopify .

[Read more: 5 KPIs to Measure Your Business's Marketing Success ]

Funding request

If you're seeking funding, this section is critical so investors understand the level of funding you need. Specify what type of funding you need ( debt or equity ) and how much, as well as how that capital will be used.

Existing businesses should perform a financial analysis and provide key financial documents , including income or profit and loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company. You should also include information on future financial plans, such as selling your business or paying off debts.

Financial projections

The goal of the financial projections section is to show that your business is viable and worth the investment. Offer a financial forecast for the next five years using information from current or projected income statements, balance sheets, and cash flow statements to support it. Graphs and charts can be especially helpful in visualizing your business's finances.

Finally, use the appendix for any information that could not fit or did not apply to other sections of the document. Information such as employee resumes, permits, credit history, and receipts are often included in this section. If you have a long appendix, consider adding a table of contents to make it easier for the reader.

Common mistakes to avoid in a business plan

The biggest mistake entrepreneurs make when they first start out is not having a business plan at all, so if you've started drafting one, you're ahead of the curve.

However, just because you make a plan doesn't mean you’re done. Business plans are meant to be living documents that you revisit as needed.

"Now more than ever, as we deal with the crisis of 2020 and 2021, stop thinking of the business plan as just a plan," wrote BPlans . "That conceptual mistake blocks you from the enormous benefits of planning as a process, with regular review and revision."

As you write your business plan, think of it as a flexible road map built to adjust to your business journey. That doesn't mean you should only do surface-level research, however. Another common mistake many entrepreneurs make is doing minimal research before writing their business plan.

"You don’t need to spend endless time researching, but your business plan should demonstrate that you truly understand your industry, your target market, and your competitors. If you don't have this core knowledge, it's going to show that you're not prepared to launch your business," wrote LivePlan .

Market analysis and defining your target audience are two crucial steps in your business growth process, so spend extra time getting your facts right and performing deep quantitative and qualitative research.

How to tailor your business plan to different audiences

Business plans are useful for a variety of stakeholders, from lenders to investors to your leadership team and first employees. As such, you want to tailor your plan to ensure it speaks directly to the interests of the reader. This reason is also why you'll want to consider your business plan to be a flexible, living document.

Put yourself in the shoes of your audience as you update your plan for different audiences. What's the most important information they'll be looking for, and how can you get it to them as easily as possible? Here are a few examples.

• Investors: This group reads many, many business plans while searching for the right investment opportunity. Time is of the essence when they pick up your plan. Therefore, provide a succinct, complete summary of your business idea, why it works, and who is on your leadership team.
• Banks: These lenders tend to be more structured and will care about the financials of your company before lending you money. Pay extra attention to your financial statements, including balance sheets and cash-flow statements.
• Suppliers: This group wants to understand why they should work with you versus one of your competitors. "They'll want, above all, to make sure you can pay your bills, so be sure to include adequate cash flow forecasts and other financial reports," wrote Entrepreneur .
• First hires: Before someone signs on to your startup, they want to know what you stand for (in addition to your product analysis). Your company mission, values, and business goals will be relevant to this group.

Make sure that as you update your business plan, you never misrepresent your core concept, financial projections, or values and mission. While different audiences have different interests, you should never completely change your plan to mislead an investor or lender.

Updating and revising your business plan over time

Your business plan should be updated regularly to reflect the current state of your business and the market. Regular reviews help you assess how well you are meeting goals, adjusting to changes in the market, or how realistic your financial targets are. Most experts recommend revisiting your plan annually at a minimum, although a market change or global event should also prompt a quick review.

"[As] long as your plan represents the current situation of the business landscape, the review can be carried out on an annual basis," wrote Upmetrics .

This article was originally written by Danielle Fallon-O’Leary.

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Business Plan Template: How to Write a Business Plan in 10 Steps

Whether you’re a seasoned business owner or just beginning to think about starting a business , demands come at you fast. Amidst the rush of to-do lists and meetings, determining how to write a business plan, much less following a business plan template, often feels time-consuming and intimidating.

It’s more than the old cliche, a failure to plan is a plan to fail. In fact, a wealth of data now exists on the difference a written business plan makes, especially for small or growing companies.

In this article, you will learn:

What is a business plan?

• What is the purpose of a business plan? 
• Why do you need a business plan? 
• Identifying the audience for your business plan  
• Why you should use a business plan template  
• How to write a business plan in 10 steps  
• Top tips for writing a business plan  

3 tips to update your business plan

A business plan is a comprehensive road map for your small business’s growth, development, and its way forward. It communicates who you are, what you plan to do, and how you plan to do it. It also helps you attract talent and investors. 

In other words, a good business plan is the one that is:

• Simple to understand
• Delegates work
• Sets milestones
• Gives results for your business

But remember that a business idea or business concept is not a plan.

What is the purpose of a business plan?

Having a solid business plan is essential for setting and monitoring goals as your business expands. It allows you to plan for the future, distribute resources effectively, concentrate on crucial aspects of your business, and be prepared for potential obstacles and chances for growth.

It also allows you to envision how your business concept will develop based on the product or service you offer, your chosen business strategy, and your target market. A business plan will also help you to identify critical cash flow challenges, get skilled candidates on board, and attract investors to put money into your business.

Why do you need a business plan?

Having a business plan is crucial as most venture capitalists (VCs) and all banking institutions require a well-structured, documented plan before investing in a new or small business. A business plan not only aids in setting clear goals, but it also provides reassurance to external parties that you have thoroughly considered all aspects of your business.

In 2018, the entrepreneurial resource centre, Bplans, worked with the University of Oregon to compile and analyse research around the benefits of business planning.

Here’s what they found:

• Businesses with a business plan grow 30% faster than those without.
• Owners with business plans are twice as likely to grow, get investments, or secure loans than those without.
• Entrepreneurs with a business plan have a 129% increased likelihood of growing beyond the startup phase and a 260% increased likelihood of growing from 'idea' to 'new business'.

Perhaps the strongest evidence comes from the Journal of Business Venturing’s 2010 meta-analysis of 46 separate studies on 11,046 organisations, its findings confirm that “business planning increases the performance of both new and established small firms".

When do you need a business plan?

Before you leave a nine-to-five income, your business plan can tell you if you’re ready. Over the long term, it’ll keep you focused on what needs to be accomplished.

It’s also smart to write a business plan when you’re:

• Seeking funding, investments, or loans
• Searching for a new partner or co-founder
• Attracting, hiring, and retaining top talent
• Experiencing slow growth and need a change

Identifying the audience for your business plan

Prior to starting your business plan, it is crucial to assess the intended audience. This will help determine whether you should create an internal or external plan. Are you targeting angel investors in a conference room, or the venture funding department at your local bank?

If so, an external plan is likely needed. Alternatively, if the audience is yourself, your team leaders, and employees, an internal plan is more appropriate.

Defining your audience helps you determine the language you’ll need to propose your ideas as well as the depth to which you need to go to help readers conduct due diligence.

Identifying your business plan audience is important because an external business plan will target investors and external stakeholders and provide them with information to consider when deciding if they will invest in your business.

For example, an external business plan may address the following:

• Product-market fit: Have you done the research to determine the demand for your product or service?
• A solid team in place: Do you have the right people or team you need to support your goals and objectives?
• Scalability: Can you grow sales volume without proportional growth in headcount and fixed costs?

Why you should use a business plan template

A templated business plan gives employees and investors alike a blueprint of what to expect from your company or business and tells them about you as an employee or entrepreneur.

Even if you don’t plan on seeking investments early on, there are other important reasons to use a business plan template to write a great business plan.

A well-structured business plan does the following:

• Clarifies what you’re trying to accomplish
• Identifies opportunities to understand your market, like demographics and behaviours
• Establish the role of each team member
• Gives team members a benchmark to reference and stay on track
• Helps catch errors to make sure financial projections are accurate
• Helps you see the holes and blind spots that could cause future issues

A business plan template is important because it helps businesses:

• Identify your business objectives, set milestones, and the means to achieve them
• Convince investors to provide investment if you are seeking one
• Track performance and measure variance between planned and actual performance so that you can take the necessary steps
• Evaluate the feasibility of a business idea in case of a startup and new product or service line in case of an established business
• Identify new business opportunities
• Take decisions about expenditures like hiring employees, buying equipment, etc with confidence
• Identify key cash flow challenges early on to avoid any cash crunch
• Lay down your organisation’s business structure
• Attract desired executive candidates or partners for your business

Business plan template

Get your hands on this complimentary template to assist you in arranging pertinent details for an impressive business plan. Our template is user-friendly and straightforward, allowing you to stay on track and kickstart your plan. It serves as a solid foundation for creating a more extensive business plan. Feel free to make any necessary additions to customise it to your needs.

How to write a business plan in 10 steps

Now, let’s dive into the 10 key elements of your business plan:

1. Create an executive summary

Even though it appears first in the plan, write your executive summary last so you can condense essential ideas from the other nine sections. For now, leave it as a placeholder.

What is an executive summary?

The executive summary is an outline of your business plan and lays out all the vital information about your business within a relatively short space, typically one page or less. The objective of the executive summary is to provide a high-level look at the key points of your business plan to encourage readers to go through the remaining elements of a business plan. 

Some readers read only the executive summary. Therefore, make sure that you keep it precise and clear.

Elements of an executive summary

Following are the key parts that must be included in the executive summary of your business plan:

• Business name, place, and contact information
• Products or services that you intend to sell together with their value proposition
• Your target market
• Purpose of writing a business plan
• Your competitive advantage, that is, important factors responsible for your business success
• Marketing and sales plan
• Financial projections for at least three to four years
• Brief background of owners, their expertise and experience
• Ways in which you plan to execute your business plan, that is, processes, responsibilities, deadlines, milestones, etc.

How do I write an executive summary?

Below, you’ll find an example from a fictional business, Laura’s Landscapers (we’ll use that same company throughout this guide to make each step practical and easy to replicate).

This executive summary focuses on what’s often called the value proposition or unique selling point: an extended motto aimed at customers, investors, and employees.

You can follow a straightforward “problem, solution” format, or a fill-in-the-blanks framework:

• For [target customers]
• Who are dissatisfied with [current solutions]
• Our [product or service] solves [key customer problems]
• Unlike [competing product], we have [differentiating key features]

This framework isn’t meant to be rigid, but instead to serve as a jumping-off point.

Example of an executive summary

Market research indicates that an increasing number of wealthy consumers in Richmond are interested in landscape architecture based on sustainable design. However, high-end firms in the area are scarce. Currently, only two exist—neither of which focus on eco-friendly planning nor are certified by green organisations.

Laura’s Landscapers provides a premium, sustainable service for customers with disposable incomes, large yards, and a love of nature.

This falls under ‘What do we do’ in the template.

2. Compose your company summary

You need to include a company summary in the business plan if you are drafting an external business plan for external stakeholders and investors. These outsiders are keen to know about various aspects of your business to get a better understanding.

A good company summary provides readers with important company information. Accordingly, the key components that form a part of the company summary section include:

• Your company name
• Type of ownership such as sole proprietorship, partnership, corporation, or LLP
• Your business location
• The products or services it intends to provide and their benefits
• The mission statement or business value proposition, that is, the value your business would create for its customers
• Company objectives including goals based on the value proposition
• Competitor analysis including competitive advantage, that is, how your company is better than the competition
• Company numbers like past performance, and 
• Important events in the company’s history

These elements give context to the bigger picture in your business plan, letting investors know the purpose behind your company so the goals make sense as well. Below we will look at key elements of a company summary in more detail.

What is a mission statement?

A mission statement is your business’s reason for existing. It’s more than what you do or what you sell. It's about why exactly you do what you do. Effective mission statements should be:

• Inspirational to make others believe in your vision
• Emotional to captivate readers and grab their interest

It is important to know that throughout every part of your plan, less is more. Nowhere is that truer than your mission statement. Think about what motivates you, what causes and experiences led you to start the business, what problems you aim to solve, and the wider social issues you care about.

Tip : Review your mission statement often to make sure it matches your company’s purpose as it evolves with time. A statement that doesn’t fit your core values or what you actually do can undermine your marketing efforts and credibility.

How do you describe a company’s history?

Don’t worry about making your company history a dense narrative. Instead, write it like you would a profile:

• Founding date
• Major milestones
• Location(s)
• Number of employees
• Executive leadership roles
• Flagship products or services
• Then, translate that list into a few short paragraphs (like the example below).

Why do business objectives matter?

Business objectives give you clear goals to focus on, like the North Star. These goals must be SMART, which stands for:

Additionally, they need to be connected to important outcomes. If your goals are not clearly outlined, it can be challenging for employees and team members to strive towards a shared objective. This can also result in a lack of trust from investors and a lack of profitability for your company.

Example of a company summary

Laura’s Landscapers’ mission is to change the face of our city through sustainable landscaping and help you create the outdoor living space of your dreams.

Founded in 2021 by sisters Laura and Raquel Smith, we have over 25 years of combined landscape architecture experience. Our four employees work in teams of two and have already completed 10 projects for some of the most influential business and community leaders.

Our objectives over the next three years are to:

• Solidify a glowing reputation as a service-based business that always exceeds customers’ expectations and honours the environment
• Complete at least 18 projects during year one, 24 in year two, and 36 in year three generated through word of mouth, referrals, and home shows
• Increase revenue from $360,000 in FY2021 to $972,000 in FY2023 based upon 10 completed projects in the last nine months

This falls under the how and why in the business plan template.

3. Summarise market research and potential

The next step is to outline your ideal potential customer as well as the actual and potential size of the targeted market. This is because you need a clear understanding of the requirements of your potential customers.

You first need to identify your customers ’ needs and then design a product or service to solve that need. Then, you need to understand if there exists a good number of customers within your target market who can buy such a product or service.

Target markets, also known as personas, identify demographic information like:

By getting specific, you’ll illustrate expertise and generate confidence. If your target market is too broad, it can be a red flag for investors.

• Example : If your product is perfect for people with money to hire landscape architects, listing 'anyone with a garden' as your target market might not go over so well.

The same is true with your market analysis when you estimate its size and monetary value. In addition to big numbers that encompass the total market, drill down into your business’s addressable market—meaning, local numbers or numbers that apply the grand total to your specific segments. You may even map your customer’s journey to get a better understanding of their wants and needs.

Example of market research and potential

Laura’s Landscapers’ ideal customer is a wealthy baby boomer, a member of Gen X, or a millennial between the ages of 35 and 65 with a high disposable income. He or she—though primarily, she—is a homeowner. They're working professionals or have recently retired. In love with the outdoors, they want to enjoy the beauty and serenity of nature in their own backyard, but don’t have the time or skill to do it for themselves.

Market research shows the opportunity for Laura’s Landscapers has never been better:

• The total revenue for landscaping services increased from $69.8 billion in 2013 to $99 billion in 2019. (1)
• Among landscaping contractors, designing and building is the second-fastest growing service offering. (2)
• What’s more, landscape design and construction is the number one “new service” existing companies plan to add over the next year. (3)

Globally, leading indicators for interest in green, eco-friendly, and sustainable landscaping have all increased exponentially over the last five years:

• Online search volume for those terms is up 467%
• 10 new community organisations have been formed
• 73 high-profile projects have been covered by local media
• And currently 13% of residents in the area have a household income of $125,000 or more

This falls under Who in the business plan template.

4. Conduct competitive analysis

To start your competitive research, you must first identify businesses that are currently operating in the market you wish to enter. Although it may seem daunting to devote enough time to studying all potential competitors, doing so can be highly beneficial. This process allows you to assess your business's unique qualities, such as pricing, features, and service, that set you apart from your competitors.

Answer these additional questions after you’ve identified your most significant competitors:

• Where do they invest in advertising?
• What kind of press coverage do they get?
• How good is their customer service?
• What are their sales and pricing strategies?
• How do they rank on third-party rating platforms? 

If your idea is truly novel, be prepared to explain the customer pain points your business aims to solve. If your business doesn’t have any direct competition, research other companies that provide a similar product or service.

Next, create a table or spreadsheet listing your competitors to include in your plan, often referred to as a competitor analysis table.

Example of competitive analysis

Within a particular residential landscaping market, there are only two high-end architectural competitors: (1) Yukie’s Yards and (2) Dante’s Landscape Design. All other businesses focus solely on either industrial projects or residential maintenance.

Yukie’s Yards

• Average cost per project: $12,000
• Ongoing maintenance fee: $200 per month
• Google My Business: 3.1 stars from 163 reviews
• Environmental certifications: None
• Primary marketing channels: Google Ads

Dante’s Landscape Design

• Average cost per project: $35,000
• Ongoing maintenance fee: $500 per month
• Google My Business: 3.7 stars from 57 reviews
• Primary marketing channels: Home shows

This falls under Competition in the business plan template.

5. Describe your product or service

This section describes the benefits, production process, and life cycle of your products or services, and how what your business offers is better than your competitors.

It is important to provide thorough explanations of the products or services you plan to include in your business plan for outside readers. Be sure to clearly outline how these offerings will benefit your customers.

Furthermore, highlight the crucial aspects that set your offerings apart. This will aid readers in comprehending your competitive advantage in the market.

Writing about the need that your products or services solve also helps you to come across other pain points of your customers.

When describing benefits, focus on:

• Unique features
• Translating features into benefits
• Emotional and practical payoffs to your customers
• Intellectual property rights or any patents that protect differentiation

For the production process, answer how you:

• Create existing and new products or services
• Source raw materials or components
• Assemble them through manufacturing
• Maintain quality control and quality assurance
• Receive and deliver them (supply chain logistics)
• Manage your daily operations, like bookkeeping and inventory

Within the product life cycle portion, map elements like:

• Time between purchases
• Up-sells, cross-sells, and down-sells
• Future plans for research and development

Example of product or service description

Laura’s Landscapers’ service—our competitive advantage—is differentiated by three core features.

First, throughout their careers, Laura and Raquel Smith have worked at and with the area’s three leading industrial landscaping firms. This gives us unique access to the residents who are most likely to use our service.

Second, we’re the only firm certified green by the Homeowners Association, the National Preservation Society, and Business Leaders.

Third, of our 10 completed projects, seven have rated us a 5 out of 5 on Google My Business and our price points for those projects place us in a healthy middle ground between our two other competitors.

• Average cost per project: $20,000
• Ongoing maintenance fee: $250 per month
• Google My Business: 5 stars from 7 reviews
• Environmental certifications: Three (see Appendix)
• Primary marketing channels: Word of mouth, referrals, and home shows

You can include this as an extra section in the template, or weave into the What + How + Why section of the business plan template.

6. Develop a marketing and sales strategy

Your marketing strategy or marketing plan can be the difference between selling so much that growth explodes or getting no business at all. 

Your marketing and sales strategy should include your plan for creating awareness of your business idea and should outline:

• Your launch plan to attract new business
• How you plan to position your business
• How you plan to price your product or service
• A website development plan to build your online presence
• Growth tactics for established businesses to expand
• Retention strategies like customer loyalty or referral programs
• The ways in which you would convert leads into customers
• The pricing tactics for converting prospects into customers
• Advertising and promotion channels such as search engines, social media, print, television, YouTube, and word of mouth
• Your training plan for the sales personnel
• Ways can you adapt to create awareness of your business idea

This portion of your business plan can also be utilised to emphasize your unique selling proposition, preferred target audiences, current customer demographics, areas of expertise, and distinguishing factors from competitors. It is important to demonstrate your past accomplishments, future plans within your current capabilities, and anticipated outcomes from your endeavors.

Example of marketing and sales strategy

Laura’s Landscapers’ marketing and sales strategy will leverage, in order of importance:

• Word of mouth
• Reviews and ratings
• Local Google Ads
• Social media
• Direct mail

Reputation is the number one purchase influencer in high-end landscape design. As such, channels 1-4 will continue to be our top priority.

Our social media strategy will involve YouTube videos of the design process as well as multiple Instagram accounts and Pinterest boards showcasing professional photography. Lastly, our direct mail campaigns will send carbon-neutral, glossy brochures to houses in wealthy neighbourhoods.

This falls under Marketing in the business plan template.

7. Compile your business financials

If you’re just starting out, your business may not yet have financial data, financial statements, or comprehensive reporting. However, you’ll still need to prepare a budget and a financial plan. 

Our budget template can help you stay on the right track when it comes to your finances. 

If your company has been around for a while and you’re seeking investors, be sure to include:

• Income statements
• Profit and loss statements
• Cash flow statements
• Balance sheets

Other figures that can be included are:

• How much of your revenue you retain as your net income
• Your ratio of liquidity to debt repayment ability
• How often you collect on your invoices

Ideally, you should provide at least three years’ worth of reporting. Make sure your figures are accurate and don’t provide any profit or loss projections before carefully going over your past statements for justification.

Avoid underestimating business costs

The relationship between costs, profit margins, and sale prices is significant, and numerous business owners establish sale prices without considering all expenses. This error is particularly common among new business owners. It is crucial to factor in all costs, including overhead expenses, when determining the cost of your product or service. Otherwise, it will be difficult to determine a sale price that will generate the desired level of profit.

Underestimating costs can catch you off guard and eat away at your business over time. Therefore, you need to consider the items in the income statement and the balance sheet that impact your cash flows.

Example of business financials

Given the high degree of specificity required to accurately represent your business’s financials, rather than create a fictional line item example for Laura’s Landscapers, we suggest using one of our free Excel templates and entering your own data:

• For new businesses: Start up budget template
• For existing businesses: Income statement template

Once you’ve completed either one, then create a big picture representation to include here as well as in your objectives in step two.

In the case of Laura’s Landscapers, this big picture would involve steadily increasing the number of annual projects and cost per project to offset lower margins:

Current revenue for FY2022: $200,000

• 10 completed projects
• ~$20,000 per project
• 15% profit margins
• $30,000 net 

FY2022 projections : $360,000

• 18 completed projects
• $54,000 net

FY2023 projections: $552,000

• 24 completed projects
• ~$23,000 per project
• 12% profit margins
• $66,240 net

FY2024 projections : $972,000

• 36 completed projects
• ~$27,000 per project
• 10% profit margins
• $97,200 net

This falls under Revenue in the business plan template.

8. Describe your organisation and management

The success of your business is dependent on the quality of your team. It is essential to identify your team members and emphasize their ability to bring your business idea to life and facilitate its growth. This section of your business plan should showcase the expertise and qualifications of your management team, who are the stars that will lead your business to success.

Make sure to include:

• Structure of management
• Roles and responsibilities including roles you still need to hire to grow your company
• Skill and education
• Personnel cost attached including the cost of hiring experts to assist operations
• Employee benefits

To make informed business decisions, you may need to budget for a bookkeeper, a CPA, and an attorney. CPAs can help you review your monthly accounting transactions and prepare your annual tax return .

Try QuickBooks Accounting Software to help your small business track expenses, manage cash flow, send custom invoices, and create financial reports. An attorney can help with client agreements, investor contracts (like shareholder agreements), and any legal disputes that may arise.

Example of organisation and management description

Laura Smith, Co-founder and CEO

• Professional background
• Awards and honours
• Notable clients

Raquel Smith, Co-founder and Chief Design Officer

• Notable clients 

Laura’s Landscapers’ creative crews

• Cumulative years of experience

You could include this at the top or your template.

9. Explain your funding request

When outlining how much money your small business needs to external stakeholders and investors, try to be as realistic as possible. You can provide a range of numbers if you don’t want to pinpoint an exact number. However, include a best-case scenario and a worst-case scenario.

Since a new business doesn’t have a track record of generating profits, it’s likely that you’ll sell equity to raise capital in the early years of operation. Equity means ownership—when you sell equity to raise capital, you are selling a portion of your company.

• Remember : An equity owner may expect to have a voice in company decisions, even if they do not own a majority interest in the business.

Most small business equity sales are private transactions. The investor may also expect to be paid a dividend, which is a share of company profits, and they’ll want to know how they can sell their ownership interest. Additionally, you can raise capital by borrowing money, but you’ll have to repay creditors both the principal amount borrowed and the interest on the debt.

If you look at the capital structure of any large company, you’ll see that most firms issue both equity and debt. When drafting your business plan, decide if you’re willing to accept the trade-off of giving up total control and profits before you sell equity in your business.

• Tip : Put together a timeline so your potential investors have an idea of what to expect. Some customers may not pay for 30 days or longer, which means the business needs a cash balance to operate.

The founder can access cash by contributing their own money into the business by securing a line of credit (LOC) at a bank. If you raise cash through a LOC or some other type of loan, it needs to be paid off ASAP to reduce the interest cost on debt.

Example of a funding request

Laura’s Landscapers has already purchased all necessary permits, software, and equipment to serve our existing customers. Once scaled to $972,000 in annual revenue—over the next three years and at a 10% profit margin—our primary ongoing annual expenses (not including taxes) will total $874,800.

While already profitable, we are requesting $100,000 in the form of either a business loan or in exchange for equity to purchase the equipment necessary to outfit two additional creative crews.

This falls under Funding in the business plan template.

10. Compile an appendix for official documents

Finally, assemble a well-organised appendix for anything and everything readers will need to supplement the information in your plan.

Consider any info that:

• Helps investors conduct due diligence
• Gives context and easy access to you or your employees

Useful details to cover in an appendix include:

• Deeds, local permits, and legal documents
• Certifications that bolster your credibility
• Business registries , and professional licenses pertaining to your legal structure or type of business
• Patents and intellectual properties
• Industry associations and memberships
• State and federal identification numbers or codes
• Key customer contracts and purchase orders 

Your appendix should be a living section of the business plan, whether the plan is a document for internal reference only or an external call for investors.

• Tip : As you include documents in the appendix, create a miniature table of contents and footnotes throughout the rest of the plan linking to or calling attention to them.

Top tips for writing a business plan

Investors have little patience for poorly written documents. You want your business plan to be as attractive and readable as possible, follow these points to save yourself from any trouble or disappointment:

• Keep it brief : A typical business plan can range from 10 to 20 pages. As long as you cover the essentials, less is more.
• Make it easy to read : Divide your document into distinct sections, so that investors can quickly flip between key pieces of information.
• Know your margins : List every cost your business incurs, and make sure that you’re assigning those costs to each product or service that you sell.
• Proofread : Double-check for typos and grammatical errors. Then, triple-check. Otherwise, you might risk your credibility.
• Invest in quality design and printing : Proper layout, branding, and decent printing or bookbinding give your business plan a professional feel.
• Be prepared in advance: Have everything ready to go at least two weeks ahead so you have time to make revisions in case of a last-minute change.

It’s a good idea to periodically revisit your business plan, especially if you are looking to expand. Conducting new research and updating your plan could also provide answers when you hit difficult questions.

Mid-year is a good time to refocus and revise your original plans because it gives you the opportunity to refocus on any goals for the second half of the year. Below are three ways to update your plan.

1. Refocus your productivity

When you wrote your original business plan, you likely identified your specific business and personal goals. Take some time now to assess if you’ve hit your targets.

• Example : If you planned to launch a new tips and trends video series and it hasn’t happened yet, what’s stopping you? Put a timeline together and set a launch date.

If you only want to work a set number of hours per week, you must identify the products and services that deliver the returns you need to make that a reality. Doing so helps you refocus your productivity on the most lucrative profit streams.

Also, use what you’ve achieved and the hard lessons you’ve learned to help you re-evaluate what is and isn’t working.

2. Realign with your goals

Do a gut check to determine whether all of your hard work is still aligned with your original goals and your mission statement. Ask yourself these questions:

• Are my goals still relevant?
• Am I still focused on the big picture?
• Where do I want to be a year from now?
• Will my existing plan still take me where I want to go?

These questions may be tough to answer at first glance, but they reveal your ties to your goals and what most likely needs to change to achieve new wins.

3. Repurpose your offerings

If your time has become more focused on small projects rather than tangible growth and building a valuable client list, consider packaging your existing products or services differently. Can you bundle a few things together?

• Example : Laura’s Landscapers might be able to offer a special pool and patio package. Doing so might help them bring in fewer yet higher-paying projects. Perhaps they can offer a maintenance package as well to keep that customer long-term.

You must deliberately manage your revenue streams, and that might require shuffling things around a little to focus on what is working for you.

Even if you don’t plan on seeking investments early on, there are other important reasons to use a business plan template to write a great business plan:

• You’ll see the holes and blind spots that could cause future issues

Download the following template to build your business plan from the ground up, considering all the important questions that will help your investors and employees.

Download this free template to help you organise relevant information for a stand-out business plan.

The old cliche is still true today, a failure to plan is a plan to fail. Your business plan is crucial to the growth of your business, from giving direction, motivation, and context to employees, to providing thoughtful reassurance and risk mitigation to financers. Before you get your small business up and running , put down a plan that instills confidence and sets you up for success.

QuickBooks for small business

Now that you have your business plan ready to go, take advantage of QuickBooks accounting software for small businesses to automate your accounting, invoicing, and financial reporting. Save time with QuickBooks and spend more time running your business. Try a free 30-day trial today and see how QuickBooks can help you grow your small business.

You need a business plan because the majority of venture capitalists (VCs) and banking institutions won't invest in a new business or small business without a solid, written plan. A business plan helps you focus on concrete objectives and provides reassurance to external parties that you've thought ahead. 

Studies show that businesses with a plan grow faster, owners with plans are more likely to succeed, and entrepreneurs with plans have an increased likelihood of growing beyond the new business phase.

You need a business plan before leaving a nine-to-five income, especially when seeking funding, investments, or loans , searching for a new partner or co-founder, attracting top talent , or experiencing slow growth and needing a change. 

Your business plan serves as a guide to determine if you're ready for entrepreneurship and helps you stay focused on long-term goals.

Before you start working on your business plan, it's important to consider who will be reading it. Take some time to evaluate whether your plan is intended for internal or external use. If you're targeting investors or external stakeholders, then you're creating an external plan. If the audience consists of your leadership team and employees, then it's an internal plan. It's crucial to identify your audience because an external business plan aims to provide investors and stakeholders with the necessary information to make decisions about investing in your business.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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How To Write A Business Plan: A Comprehensive Guide

The Startups Team

How To Write A Business Plan: A Comprehensive Guide

A comprehensive, step-by-step guide - complete with real examples - on writing business plans with just the right amount of panache to catch an investor's attention and serve as a guiding star for your business.

Introduction to Business Plans

So you've got a killer startup idea. Now you need to write a business plan that is equally killer.

You fire up your computer, open a Google doc, and stare at the blank page for several minutes before it suddenly dawns on you that,  Hm…maybe I have no idea how to write a business plan from scratch after all.

Don't let it get you down. After all, why would you know anything about business planning? For that very reason we have  4 amazing business plan samples  to share with you as inspiration.

For most founders,  writing a business plan  feels like the startup equivalent of homework. It's the thing you know you have to do, but nobody actually wants to do.

Here's the good news: writing a business plan doesn't have to be this daunting, cumbersome chore.

Once you understand the fundamental questions that your business plan should answer for your readers and how to position everything in a way that compels your them to take action, writing a business plan becomes way more approachable.

Before you set fingers to the keyboard to turn your business idea into written documentation of your organizational structure and business goals, we're going to walk you through the most important things to keep in mind (like company description, financials, and market analysis, etc.) and to help you tackle the writing process confidently — with plenty of real life business plan examples along the way to get you writing a business plan to be proud of!

Keep It Short and Simple.

There's this old-school idea that business plans need to be ultra-dense, complex documents the size of a doorstop because that's how you convey how serious you are about your company.

Not so much.

Complexity and length for complexity and length's sake is almost never a good idea, especially when it comes to writing a business plan. There are a couple of reasons for this.

1. Investors Are Short On Time

If your chief goal is using your business plan to secure funding, then it means you intend on getting it in front of an investor. And if there's one thing investors are, it's busy. So keep this in mind throughout writing a business plan.

Investors wade through hundreds of business plans a year. There's no version of you presenting an 80-page business plan to an investor and they enthusiastically dive in and take hours out of their day to pour over the thing front to back.

Instead, they're looking for you to get your point across as quickly and clearly as possible so they can skim your business plan and get to the most salient parts to determine whether or not they think your opportunity is worth pursuing (or at the very least initiating further discussions).

You should be able to refine all of the key value points that investors look for to 15-20 pages (not including appendices where you will detail your financials). If you find yourself writing beyond that, then it's probably a case of either over explaining, repeating information, or including irrelevant details in your business plan (you don't need to devote 10 pages to how you're going to set up your website, for example).

Bottom line: always be on the lookout for opportunities to “trim the fat" while writing a business plan (and pay special attention to the executive summary section below), and you'll be more likely to secure funding.

2. Know Your Audience

If you fill your business plan with buzzwords, industry-specific jargon or acronyms, and long complicated sentences, it might make sense to a handful of people familiar with your niche and those with superhuman attention spans (not many), but it alienates the vast majority of readers who aren't experts in your particular industry. And if no one can understand so much as your company overview, they won't make it through the rest of your business plan.

Your best bet here is to use simple, straightforward language that's easily understood by anyone — from the most savvy of investor to your Great Aunt Bertha who still uses a landline.

How To Format Your Business Plan

You might be a prodigy in quantum mechanics, but if you show up to your interview rocking cargo shorts and lime green Crocs, you can probably guess what the hiring manager is going to notice first.

In the same way,  how  you present your business plan to your readers equally as important as what you present to them. So don't go over the top with an extensive executive summary, or get lazy with endless bullet points on your marketing strategy.

If your business plan is laden with inconsistent margins, multiple font types and sizes, missing headings and page numbers, and lacks a table of contents, it's going to create a far less digestible reading experience (and totally take away from your amazing idea and hours of work writing a business plan!)

While there's no one  right  way to format your business plan, the idea here is to ensure that it presents professionally. Here's some easy formatting tips to help you do just that.

If your margins are too narrow, it makes the page look super cluttered and more difficult to read.

A good rule of thumb is sticking to standard one-inch margins all around.

Your business plan is made up of several key sections, like chapters in a book.

Whenever you begin a section (“Traction” for example) you'll want to signify it using a header so that your reader immediately knows what to expect from the content that follows.

This also helps break up your content and keep everything nice and organized in your business plan.

Subheadings

Subheadings are mini versions of headings meant to break up content within each individual section and capture the attention of your readers to keep them moving down the page.

In fact, we're using sub-headers right now in this section for that very purpose!

Limit your business plan to two typefaces (one for headings and one for body copy and subheadings, for example) that you can find in a standard text editor like Microsoft Word or Google Docs.

Only pick fonts that are easy to read and contain both capital and lowercase letters.

Avoid script-style or jarring fonts that distract from the actual content. Modern, sans-serif fonts like Helvetica, Arial, and Proxima Nova are a good way to go.

Keep your body copy between 11 and 12-point font size to ensure readability (some fonts are more squint-inducing than others).

You can offset your headings from your body copy by simply upping the font size and by bolding your subheadings.

Sometimes it's better to show instead of just tell.

Assume that your readers are going to skim your plan rather than read it word-for-word and treat it as an opportunity to grab their attention with color graphics, tables, and charts (especially with financial forecasts), as well as product images, if applicable.

This will also help your reader better visualize what your business model is all about.

Need some help with this?

Our  business planning wizard  comes pre-loaded with a modular business plan template that you can complete in any order and makes it ridiculously easy to generate everything you need from your value proposition, mission statement, financial projections, competitive advantage, sales strategy, market research, target market, financial statements, marketing strategy, in a way that clearly communicates your business idea.

Refine Your Business Plans. Then Refine Them Some More.

Your business isn't static, so why should your business plan be?

Your business strategy is always evolving, and so are good business plans. This means that the early versions of your business plans probably won't (and shouldn't be) your last. The details of even even the best business plans are only as good as their last update.

As your business progresses and your ideas about it shift, it's important revisit your business plan from time to time to make sure it reflects those changes, keeping everything as accurate and up-to-date as possible. What good is market analysis if the market has shifted and you have an entirely different set of potential customers? And what good would the business model be if you've recently pivoted? A revised business plan is a solid business plan. It doesn't ensure business success, but it certainly helps to support it.

This rule especially holds true when you go about your market research and learn something that goes against your initial assumptions, impacting everything from your sales strategy to your financial projections.

At the same time, before you begin shopping your business plan around to potential investors or bankers, it's imperative to get a second pair of eyes on it after you've put the final period on your first draft.

After you run your spell check, have someone with strong “English teacher skills” run a fine-tooth comb over your plan for any spelling, punctuation, and grammatical errors you may have glossed over. An updated, detailed business plan (without errors!) should be constantly in your business goals.

More than that, your trusty business plan critic can also give you valuable feedback on how it reads from a stylistic perspective. While different investors prefer different styles, the key here is to remain consistent with your audience and business.

Writing Your Business Plan: A Section-By-Section Breakdown

We devoted an entire article carefully breaking down the  key components of a business plan  which takes a comprehensive look of what each section entails and why.

If you haven't already, you should check that out, as it will act as the perfect companion piece to what we're about to dive into in a moment.

For our purposes here, we're going to look at a few real world business plan examples (as well as one of our own self-penned “dummy” plans) to give you an inside look at how to position key information on a section-by-section basis.

1. Executive Summary

Quick overview.

After your Title Page — which includes your company name, slogan (if applicable), and contact information — and your Table of Contents, the Executive Summary will be the first section of actual content about your business.

The primary goal of your Executive Summary is to provide your readers with a high level overview of your business plan as a whole by summarizing the most important aspects in a few short sentences. Think of your Executive Summary as a kind of “teaser” for your business concept and the information to follow — information which you will explain in greater detail throughout your plan. This isn't the place for your a deep dive on your competitive advantages, or cash flow statement. It is an appropriate place to share your mission statement and value proposition.

Executive Summary Example

Here's an example of an Executive Summary taken from a sample business plan written by the Startups.com team for a fictional company called Culina. Here, we'll see how the Executive Summary offers brief overviews of the  Product ,  Market Opportunity ,  Traction , and  Next Steps .

Culina Tech specializes in home automation and IoT technology products designed to create the ultimate smart kitchen for modern homeowners.

Our flagship product, the Culina Smart Plug, enables users to make any kitchen appliance or cooking device intelligent. Compatible with all existing brands that plug into standard two or three-prong wall outlets, Culina creates an entire network of Wi-Fi-connected kitchen devices that can be controlled and monitored remotely right from your smartphone.

The majority of US households now spend roughly 35% of their energy consumption on appliances, electronics, and lighting.  With the ability to set energy usage caps on a daily, weekly or monthly basis, Culina helps homeowners stay within their monthly utility budget through more efficient use of the dishwasher, refrigerator, freezer, stove, and other common kitchen appliances.

Additionally, 50.8% of house fires are caused in the kitchen — more than any other room in the home — translating to over $5 billion in property damage costs per year.  Culina provides the preventative intelligence necessary to dramatically reduce kitchen-related disasters and their associated costs and risk of personal harm.

Our team has already completed the product development and design phase, and we are now ready to begin mass manufacturing. We've also gained a major foothold among consumers and investors alike, with 10,000 pre-ordered units sold and $5 million in investment capital secured to date.

We're currently seeking a $15M Series B capital investment that will give us the financial flexibility to ramp up hardware manufacturing, improve software UX and UI, expand our sales and marketing efforts, and fulfill pre-orders in time for the 2018 holiday season.

2. Company Synopsis

Your Company Synopsis section answers two critically important questions for your readers: What painful  PROBLEM  are you solving for your customers? And what is your elegant  SOLUTION  to that problem? The combination of these two components form your value proposition.

Company Synopsis Example

Let's look at a real-life company description example from  HolliBlu * — a mobile app that connects healthcare facilities with local skilled nurses — to see how they successfully address both of these key aspects.  *Note: Full disclosure; Our team worked directly with this company on their business plan via Fundable.

Notice how we get a crystal clear understanding of why the company exists to begin with when they set up the  problem  — that traditional nurse recruitment methods are costly, inconvenient, and time-consuming, creating significant barriers to providing quality nursing to patients in need.

Once we understand the painful problem that HolliBlu's customers face, we're then directly told how their  solution  links back directly to that problem — by creating an entire community of qualified nurses and directly connecting them with local employers more cost-effectively and more efficiently than traditional methods.

3. Market Overview

Your Market Overview provides color around the industry that you will be competing in as it relates to your product/service.

This will include statistics about industry size, [growth](https://www.startups.com/library/expert-advice/the-case-for-growing-slowly) rate, trends, and overall outlook. If this part of your business plan can be summed up in one word, it's  research .

The idea is to gather as much raw data as you can to make the case for your readers that:

This is a market big enough to get excited about.

You can capture a big enough share of this market to get excited about.

Target Market Overview Example

Here's an example from HolliBlu's business plan:

HolliBlu's Market Overview hits all of the marks — clearly laying out the industry size ($74.8 billion), the Total Addressable Market or TAM (3 million registered nurses), industry growth rate (581,500 new RN jobs through 2018; $355 billion by 2020), and industry trends (movement toward federally-mandated compliance with nurse/patient ratios, companies offering sign-on bonuses to secure qualified nurses, increasing popularity of home-based healthcare).

4. Product (How it Works)

Where your Company Synopsis is meant to shed light on why the company exists by demonstrating the problem you're setting out to solve and then bolstering that with an impactful solution, your Product or How it Works section allows you to get into the nitty gritty of how it actually delivers that value, and any competitive advantage it provides you.

Product (How it Works) Example

In the below example from our team's Culina sample plan, we've divided the section up using subheadings to call attention to product's  key features  and how it actually works from a user perspective.

This approach is particularly effective if your product or service has several unique features that you want to highlight.

5. Revenue Model

Quite simply, your Revenue Model gives your readers a framework for how you plan on making money. It identifies which revenue channels you're leveraging, how you're pricing your product or service, and why.

Revenue Model Example

Let's take a look at another real world business plan example with brewpub startup  Magic Waters Brewpub .*

It can be easy to get hung up on the financial aspect here, especially if you haven't fully developed your product yet. And that's okay. *Note: Full disclosure; Our team worked directly with this company on their business plan via Fundable.

The thing to remember is that investors will want to see that you've at least made some basic assumptions about your monetization strategy.

6. Operating Model

Your Operating Model quite simply refers to how your company actually runs itself. It's the detailed breakdown of the processes, technologies, and physical requirements (assets) that allow you to deliver the value to your customers that your product or service promises.

Operating Model Example

Let's say you were opening up a local coffee shop, for example. Your Operating Model might detail the following:

Information about your facility (location, indoor and outdoor space features, lease amount, utility costs, etc.)

The equipment you need to purchase (coffee and espresso machines, appliances, shelving and storage, etc.) and their respective costs.

The inventory you plan to order regularly (product, supplies, etc.), how you plan to order it (an online supplier) and how often it gets delivered (Mon-Fri).

Your staffing requirements (including how many part or full time employees you'll need, at what wages, their job descriptions, etc.)

In addition, you can also use your Operating Model to lay out the ways you intend to manage the costs and efficiencies associated with your business, including:

The  Critical Costs  that make or break your business. In the case of our coffee shop example, you might say something like,

“We're estimating the marketing cost to acquire a customer is going to be $25.  Our average sale is $45.  So long as we can keep our customer acquisition costs below $25 we will have enough margin to grow with.”

Cost Maturation & Milestones  that show how your Critical Costs might fluctuate over time.

“If we sell 50 coffees a day, our average unit cost will be $8 on a sale of $10.  At that point we're barely breaking even. However as we scale up to 200 coffees a day, our unit costs drop significantly to $4, creating a 100% increase in net income.”

Investment Costs  that highlight strategic uses of capital that will have a big Return on Investment (ROI) later.

“We're investing $100,000 into a revolutionary new coffee brewing system that will allow us to brew twice the amount our current output with the same amount of space and staff.”

Operating Efficiencies  explaining your capability of delivering your product or service in the most cost effective manner possible while maintaining the highest standards of quality.

“By using energy efficient Ecoboilers, we're able to keep our water hot while minimizing the amount of energy required. Our machines also feature an energy saving mode. Both of these allow us to dramatically cut energy costs.”

7. Competitive Analysis

Like the Market Overview section, you want to show your readers that you've done your homework and have a crazy high level of awareness about your current competitors or any potential competitors that may crop up down the line for your given business model.

When writing your Competitive Analysis, your overview should cover  who  your closest competitors are, the chief  strengths  they bring to the table, and their biggest  weaknesses .

You'll want to identify at least 3 competitors — either direct, indirect, or a combination of the two. It's an extremely important aspect of the business planning process.

Competition Analysis Example

Here's an example of how HolliBlu lays out their Competitive Analysis section for just one of their competitors, implementing each of the criteria noted above:

8. Customer Definition

Your Customer Definition section allows you to note which customer segment(s) you're going after, what characteristics and habits each customer segment embodies, how each segment uniquely benefits from your product or service, and how all of this ties together to create the ideal portrait of an actual paying customer, and how you'll cultivate and manage customer relationships.

Customer Definition Example

HolliBlu's Customer Definition section is effective for several reasons. Let's deconstruct their first target market segment, hospitals.

What's particularly successful here is that we are explained why hospitals are optimal buyers.

They accomplish this by harkening back to the central problem at the core of the opportunity (when hospitals can't supply enough staff to meet patient demands, they have to resort on costly staffing agencies).

On top of that, we are also told how  big  of an opportunity going after this customer segment represents (5,534 hospitals in the US).

This template is followed for each of the company's 3 core customer segments. This provides consistency, but more than that, it emphasizes how diligent research reinforces their assumptions about who their customers are and why they'd open their wallets. Keep all of this in mind when you are write your own business plan.

9. Customer Acquisition

Now that you've defined who your customers are for your readers, your Customer Acquisition section will tell them what marketing and sales strategy and tactics you plan to leverage to actually reach the target market (or target markets) and ultimately convert them into paying customers.

marketing Strategy Example

Similar to the exercise you will go through with your Revenue Model, in addition to identifying  which  channels you're pursuing, you'll also want to detail all of relevant costs associated with your customer acquisition channels.

Let's say you spent $100 on your marketing plan to acquire 100 customers during 2018. To get your CAC, you simply divide the number of customers acquired by your spend, giving you a $1.00 CAC.

10. Traction

This one's huge. Traction tells investors one important thing: that you're business has momentum. It's evidence that you're making forward progress and hitting milestones. That things are happening. It's one of the most critical components of a successful business plan.

Why is this so important? Financial projections are great and all, but if you can prove to investors that your company's got legs before they've even put a dime into it, then it will get them thinking about all the great things you'll be able to accomplish when they do bankroll you.

Traction Example

In our Culina Traction section, we've called attention to several forms of traction, touching on some of the biggest ones that you'll want to consider when writing your own plan.

Have I built or launched my product or service yet?

Have I reached any customers yet?

Have I generated any revenue yet?

Have I forged any strategic industry relationships that will be instrumental in driving growth?

The key takeaway here: the more traction you can show, the more credibility you build with investors. After all, you can't leave it all on market analysis alone.

11. Management Team

Here's what your Management Team section isn't: it's not an exhaustive rundown of each and every position your team members have held over the course of their lives.

Instead, you should tell investors which aspects of your team's experience and expertise directly translates to the success of  this  company and  this  industry.

In other words, what applicable, relevant background do they bring to the table?

Management Team Example

Let's be real. The vast majority of startup teams probably aren't stacked with Harvard and Stanford grads. But the thing to home in on is how the prior experience listed speaks directly to how it qualifies that team member's current position.

The word of the day here is relevancy. If it's not relevant, you probably don't need to include it in your typical business plan.

12. Funding

Funding overview.

The ask! This is where you come out and, you guessed it,  ask  your investors point blank how much money you need to move your business forward, what specific milestones their investment will allow you to reach, how you'll allocate the capital you secure, and what the investor will get in exchange for their investment.

You can also include information about your  exit strategy  (IPO, acquisition, merger?).

Funding Example

While we've preached against redundancy in your business plan, an exception to the rule is using the Funding section to offer up a very brief recap that essentially says, “here are the biggest reasons you should invest in my company and why it will ultimately benefit you.”

13. Financials

Spreadsheets and numbers and charts, oh my! Yes, it's everybody's “favorite” business plan section: Financials.

Your Financials section will come last and contain all of the forecasted numbers that say to investors that this is a sound investment. This will include things like your sales forecast, expense budget, and break-even analysis. A lot of this will be assumptions, or estimates.

The key here is keeping those estimates as realistic as humanly possible by breaking your figures into components and looking at each one individually.

Financials Example

The balance sheet above illustrates the business' estimated net worth over a three-year period by summarizing its assets (tangible objects owned by the company), liabilities (debt owed to a creditor of the company), and shareholders' equity (source of financing used to fund the assets).

In plain words, the balance sheet is basically a snapshot of your business' financial status by laying out what you own and owe, helping investors determine the level of risk involved and giving them a good understanding of the financial health of the business.

If you're looking to up your game from those outdated Excel-style spreadsheets,  our business planning software  will help you create clean, sleek, modern financial reports the modern way. Plus, it's as easy to use as it is attractive to look at. You might even find yourself enjoying financial projections, building a cash flow statement, and business planning overall.

You've Got This!

You've committed to writing your business plan and now you've got some tricks of the trade to help you out along the way. Whether you're applying for a business loan or seeking investors, your well-crafted business plan will act as your Holy Grail in helping take your business goals to the next plateau.

This is a ton of work. It's not a few hours and a free business plan template. It's not just a business plan software. We've been there before. Writing your [business plan](https://www.startups.com/library/expert-advice/top-4-business-plan-examples) is just one small step in startup journey. There's a whole long road ahead of you filled with a marketing plan, investor outreach, chasing venture capitalists, actually getting funded, and growing your business into a successful company.

And guess what? We've got helpful information on all of it — and all at your disposal! We hope this guides you confidently on how to write a business plan worth bragging about.

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