prepare a business plan as an entrepreneur

You’ll also learn the financial benefits investors can reap from putting money into your venture rather than trying to sell them on how great your product or service is.

This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it’s one of my favorites to supplement any template you choose to use. Harvard Business Review’s guide is instrumental for both new and seasoned business owners.

7. HubSpot’s Complete Guide to Starting a Business

8. Panda Doc’s Free Business Plan Template

23 of My Favorite Free Marketing Newsletters

The 8 Best Free Flowchart Templates [+ Examples]

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

7 Gantt Chart Examples You'll Want to Copy [+ 5 Steps to Make One]

How to Write an Executive Summary Execs Can't Ignore [+ 5 Top Examples]

20 Free & Paid Small Business Tools for Any Budget

Maximizing Your Social Media Strategy: The Top Aggregator Tools to Use

The Content Aggregator Guide for 2024

16 Best Screen Recorders to Use for Collaboration

2 Essential Templates For Starting Your Business

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

More From Forbes

10 entrepreneurs share their top business plan writing tips.

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Business plans are more than just documents outlining your steps to launching and growing your startup. This plan acts as a map throughout the entire process, and helps you figure out what to do when you face roadblocks or wrong turns.

While a business plan isn't required to start a business, it can be helpful in guiding you in the right direction and even securing proper funding for your business. However, writing a business plan is no easy task. To help you get started, a panel of Young Entrepreneur Council members shared their best tips and tricks.

Young Entrepreneur Council members share their top tips for creating a business plan.

1. Segment By Business Area And Priority

We never had a formal business plan until well into our second year. What we did have, however, were bite-sized chunks of what would later become a formalized business plan as we prioritized elements such as marketing, target customers and messaging together with financial modeling when the company was just starting out. If your company is a B2C-based e-commerce business, it is going to be vital that you understand product economics such as lifetime value (LTV) and margins on any physical or digital products, as well as how you will reach your ideal customer using marketing strategies. For B2B companies, you may wish to prioritize customer acquisition costs (CAC) and how to grow your user base. - Alexander Young , Virti

2. Get Clear On Your Selling Points

These days, a lot of investors aren’t asking for a full-length business plan—instead, they expect to see a 10- to 15-slide “pitch deck,” so I suggest writing a traditional, detailed business plan as more of an exercise for yourself than for investors. Having a business plan is important for sharpening your focus and honing in on potential future problem areas. A comprehensive plan will help to make sure that you are clear on the selling points and the go-to-market strategy for your company. Knowing this information is crucial for future scenarios in which you’ll have to answer any and every tough question investors may throw at you. - Cooper Harris , Klickly

3. Know Your Audience

Is this a business plan you will be showing to potential investors, or is it for your own benefit? Will this plan be handed to every new employee when they join the company, or will it contain secret information? By establishing why you need this plan, you are likely to come up with something constructive. A plan geared toward investors will contain clear sets of specific financial projections as well as clear explanations of the business's goals. There will be less room for speculation and you will need to convey the core offering in as enticing a format as possible. This is less true of a plan for your own benefit or for your employees. Being clear about the hurdles your business will have to pass and the ferocity of any competition will better prepare you for success. - Ismael Wrixen , FE International

4. Build Out Your Unit Economics

Know your anticipated revenue and fully loaded costs for every "unit" or transaction (raw ingredients/materials, labor, customer acquisition costs, shipping costs, etc). Often, figuring out what the "unit" is for your business is the hardest part. It could be an average transaction, a subscriber, an acquired account, a tenant, etc. Unit economics is far more important than a high-level P&L based on a finger in the air forecast (though this pro forma P&L is also important). The unit economics forces you to grapple with and make sense of the heart of your business—how will you make money, how much it will cost to make money, whether or not you profit from each transaction and how many units you need to sell to cover your fixed costs and be profitable. - Saloni Doshi , Eco Enclose, LLC

5. Break Down Your Vision Into Actionable Goals

It's important to have a vision for your business—the long-term plan, the peak where you want your business to reach. But it's equally important to break down your vision into actionable goals. Goals are more short-term. They define the individual steps you have to fulfill to achieve that vision. While putting down your goals, ensure that they are directed toward your vision. List down your core competencies and limitations, and don't overestimate yourself, though it's always helpful to dream as big as you can. However, don't bind yourself by numbers. Don't tell yourself that in two years, if you don't have "x" in profit, this is a failed idea. Plan for shortcomings, write down ideas to help you pivot and keep reassessing your industry for success. - Abeer Raza , TekRevol

6. Aim For Substance Over Form

Substance is the heart and soul of the business plan. You're probably wasting time if you are spending hours looking for a premade template or program on the internet. What is important is that your plan has substance, a marketable product, a systematic plan for increasing revenue and a knowledge of competitive pressures. One way to make sure you are focusing on substance is to think of the "pitch" of your report. If you had to condense your plan to one paragraph, what would you say? Too many pages of market analysis can muddle your strategy and distract from the point of a business plan: How can you create a revenue flow before you run out of money? Making sure the substance of your plan shines will help your plan develop into an amazing reality. - Shu Saito , All Filters

7. Give A Detailed Picture Of Your Finances

Startups, ventures or any business seeking market capital should incorporate a detailed picture of financial standings. These factors are very important for stakeholders in any company before they entrust their money with you. A business plan is the best way of helping out the investors by showcasing your financial status. But non-disclosure may cause doubt and distortion in the eyes of investors, and your investor may withdraw their interest. So, disclose all the financial information. It’s always advised to consult an expert in these matters. - Kelly Richardson , Infobrandz

8. Think Big

No matter your starting point, envision what you hope your agency will be like one day. This will save you a lot of time redesigning processes and making changes. Here's a simple example. When we got our very first office, we moved in with a certain amount of people on board. Then the business started to grow and scale, and sooner than we knew it, we had to look for a bigger office. We were smarter this time and found a building with much more space than we needed. Why? Because we knew we would keep growing. That's the kind of approach you need to use with every major element of your business. If you are setting up some process or tech solution, think about how it will work for you in a few years. - Solomon Thimothy , OneIMS

9. Get Feedback

Your business won't live in a bubble and neither should your business plan. Getting feedback on your business plan can help you refine your vision and clarify your intent. You may even be able to troubleshoot potential issues before you start development. As you assemble your review team, gather a diverse set of perspectives, and consider how this group could help you get from phase one to launch. - Jack Tai , OneClass

10. Expect Change

Business plans are great because they help you map out your company's future. Without a plan, it would be challenging to move forward or know where to begin. However, keep in mind that things change. You may see yourself and your business in a certain spot five years from now, but that doesn't mean it'll happen. You may have to move in a different direction for an unexpected reason. Whatever happens, remember that change is normal, and going with the flow may help you instead of hurt you. - Stephanie Wells , Formidable Forms

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11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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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 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.

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12 Reasons You Need a Business Plan In the new book "Write Your Own Business Plan," business expert Eric Butow breaks down how a solid business plan can save your startup during those tough early days.

By Dan Bova Sep 19, 2023

Running a business can be unpredictable, which is why having a solid business plan as a foundation is vital to surviving and thriving in the early days of your startup. Eric Butow, CEO of online marketing ROI improvement firm Butow Communications Group, has teamed up with Entrepreneur Media to write the second edition of our best-selling book Write Your Business Plan , providing you with a roadmap for success.

In the following excerpt, Butow explains how a well-thought-out plan can power your startup and help your vision come to life.

Business plans could be considered cheap insurance. Just as many people don't buy fire insurance on their homes and rely on good fortune to protect their investments, many successful business owners do not rely on written business plans but trust their own instincts. However, your business plan is more than insurance. It reflects your ideas, intuitions, instincts, and insights about your business and its future—and provides the cheap insurance of testing them out before you are committed to a course of action. There are so many reasons to create a business plan, and chances are that more than one of the following will apply to your business.

1. A plan helps you set specific objectives for managers.

Good management requires setting specific objectives and then tracking and following up. As your business grows, you want to organize, plan, and communicate your business priorities better to your team and to you. Writing a plan gets everything clear in your head before you talk about it with your team.

2. You can share your strategy, priorities, and plans with your spouse or partner.

People in your personal life intersect with your business life, so shouldn't they know what's supposed to be happening?

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3. Use the plan to explain your displacement.

A short definition of displacement is, "Whatever you do is something else you don't do." Your plan will explain why you're doing what you've decided to do in your business.

4. A plan helps you figure out whether or not to rent or buy new space.

Do your growth prospects and plans justify taking on an increased fixed cost of new space?

5. You can explain your strategy for hiring new people.

How will new people help your business grow and prosper? What exactly are they going to do?

6. A plan helps you decide whether or not to bring on new assets.

How many new assets do you need, and will you buy or lease them? Use your business plan to help decide what's going to happen in the long term and how long important purchases, such as computer equipment, will last in your plan.

7. Share your plan with your team.

Explain the business objectives in your plan with your leadership team, employees, and new hires. What's more, make selected portions of your plan part of your new employee training.

8. Share parts of your plan with new allies to bring them aboard.

Use your plan to set targets for new alliances with complementary businesses and also disclose selected portions of your plan with those businesses as you negotiate an alliance.

9. Use your plan when you deal with professionals.

Share selected parts of your plan with your attorneys and accountants, as well as consultants if necessary.

Write Your Own Business Plan is available now at Entrepreneur Bookstore | Barnes & Noble | Amazon

10. Have all the information in your plan when you're ready to sell.

Sell your business when it's time to put it on the market so you can help buyers understand what you have, what it's worth, and why they want it.

11. A plan helps you set the valuation of the business.

Valuation means how much your business is worth, and it applies to formal transactions related to divorce, inheritance, estate planning, and tax issues. Usually, that takes a business plan as well as a professional with experience. The plan tells the valuation expert what your business is doing, when it's doing (or will do) certain things, why those things are being done, how much that work will cost, and the benefits that work will produce.

12. You can use information in the plan when you need cash.

Seek investment for a business no matter what stage of growth the business finds itself in. Investors need to see a business plan before they decide whether or not to invest. They'll expect the plan to cover all the main points.

To dig deeper, buy Write Your Own Business Plan and get 1 month of free access to business planning software Liveplan Premium.

Entrepreneur Staff

VP of Special Projects

Dan Bova is the VP of Special Projects at Entrepreneur.com. He previously worked at Jimmy Kimmel Live, Maxim, and Spy magazine. His latest books for kids  include  This Day in History , Car and Driver's Trivia Zone ,  Road & Track Crew's Big & Fast Cars , The Big Little Book of Awesome Stuff , and  Wendell the Werewolf . 

Read his humor column This Should Be Fun  if you want to feel better about yourself.

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Starting a business is not for the faint of heart. Bureau of Labor Statistics data shows that about 20% of all new businesses will fail in their first year. That represents a lot of hard work, passion and money that, for one reason or another, fails to result in a tenable business venture. If you’re an entrepreneur, you want to avoid that fate and have a thriving business — and not just a life lesson — at the end of your first year.

Keep reading for an in-depth look at six essential tips you’ll need to know to properly manage your new business , including things you can do to attract investors, knowing when to hire professional help and more.

Keep Your Business and Personal Finances Separated

This is the first item on this list because it’s an incredibly common error among startups. You’ll be tempted to cover business expenditures with your personal funds for a variety of reasons, whether it’s easier, more convenient or “no big deal” to pay for a small purchase now and then.

There are a lot of very good reasons not to do this. It muddies the waters when it comes to preparing accurate financial documents, makes proper management of your finances more difficult and can lead to tax and even legal complications. Always separate personal and business spending so that if your enterprise does fail, it doesn’t take you with it.

At the very least, you’ll want a business bank account with a debit card that you use exclusively for business transactions. Getting a business credit card is also a good idea to help keep your cash flows separated and build business credit.

Create a Detailed Business Plan

This is as much for your use as it is for lenders and investors. You won’t be able to make a compelling argument for why someone should trust you with startup money if you don’t understand every detail, and nothing shows understanding like a well-thought-out business plan.

There are various ways to create this essential financial document, but every business plan should contain financial projections for a few key elements. Those are:

• A sales forecast: This is an estimate of how much revenue you expect your business to generate. Though every financial projection is essentially a best guess, base this on as much hard data as you have at your disposal.
• An expense budget: This is a detailed list of your operating costs, broken down by category and including both fixed and variable costs.
• A balance sheet: This is a big one, and it can help you get a clear picture of how viable your business really is. List all of your business’s assets, liabilities and the value of any equity your business owns to understand — and demonstrate — the net worth of your enterprise.
• A profit and loss statement: Last but certainly not least, you’ll need a detailed profit and loss projection. Estimate your earnings, subtract forecasted costs and demonstrate reasonable and realistic profitability.

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Remember, this is just as much a road map as a document to show the bank. Take your time on this step, double-check your figures and understand every detail.

Bootstrap Initial Costs

Bootstrapping, or using your own money to fund the initial phase of business growth, isn’t a bad idea — as long as you make meticulous records of how much money you invest in the business and keep your personal and business finances separated.

Bootstrapping usually helps identify the core components of your business and leads you to create a lean and efficient structure that can appeal to investors when you are in a position to seek outside funding.

Diversify Your Funding

Most businesses need to be able to raise external capital when it comes to scaling up their operations. Different options are available here, and you should examine each carefully to determine which ones you’ll want to pursue.

Whenever possible, try to get funding from as many sources as possible. This minimizes the amount you’ll need to secure from each source and improves your chances of successfully raising the money you need.

If you opt for venture capitalists or “angel investors,” be aware that the funds they provide usually come at the expense of equity and the right to influence business decisions. This can be a blessing or a curse, so proceed with caution.

Small business loans can be an option if you have some credit history and a solid business plan, but these come with the added cost of interest and represent additional monthly overhead.

Get Professional Financial Help

Unless the business you’re starting is an accounting firm, you’ll likely need support from experienced professionals when managing certain elements of your business’s finances.

You may not need full-time staff at first, but consider hiring an accountant or financial advisor on a contract basis. They’ll be able to guide you through some of the trickier aspects of running a small business.

Even if it’s only a quarterly or monthly review, it’s the best way to stay informed about your business’s financial health and to identify any problems before they get big enough to cause damage.

Stay on Top of Business Taxes

New business owners may not be aware of the different regulations governing business taxes. Many businesses are required to file quarterly taxes, and you’ll need to account for income, payroll taxes, sales and, in some cases, excise taxes. It’s a lot to keep track of, which is another reason professional help can make a big difference.

If you can’t afford to hire an accountant or other financial professional, at least consider hiring a tax preparer who specializes in small business taxes. To make that person’s job easier, keep detailed and complete records of all business transactions, including receipts and invoices.

Ask whomever you’re entrusting with your taxes about any deductions, incentives or tax credits your business may qualify for.

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Keep Strategy Simple

• Graham Kenny

How to recognize when you need a strategic plan — and when you don’t.

Few companies have a clear idea of where strategy making ends and execution begins. As a result they develop strategic plans where they’re not required and fail to develop strategic plans where they are. To help prevent this happening to you Graham Kenny offers a few dos and don’ts: (1) Don’t develop strategic plans for functions; (2) Confine “strategy” to the business level; (3) Keep strategy and action separate; and (4) Be careful how you use the terms “strategy” and “strategic.”

In one of my recent LinkedIn discussions about business strategy, a commenter lamented : “Unfortunately, many of the strategic plans we see are no more than a mish-mash collage of ‘individual level’ rush-to-do’s, often missing out on an ‘organization-level’ cohesive and thought-through design intent.”

• Graham Kenny is the CEO of Strategic Factors and author of Strategy Discovery . He is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. He has been a professor of management in universities in the U.S. and Canada.

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6 Ways a Business Administration Degree Equips You for Entrepreneurship

Daydreaming about starting your own business or even inventing your own product? If so, then you’ll need the entrepreneurial skills and spirit to get out there and make it happen.

Where can you develop those skills and hone your understanding of business and entrepreneurship? A business administration program is a solid starting point. There are numerous ways in which completing this business degree program can help you grow your entrepreneurship skills while preparing for the unique challenges that come along with running your own business.

Key Takeaways

A business administration degree is designed to provide students with the foundational skills and knowledge needed to understand how businesses operate from the inside out. Business administration degrees are available at both the undergraduate and graduate levels and may even be available with additional specializations or concentrations.

Regardless of whether you’re looking at a bachelor’s degree or master’s degree in business administration, there are several takeaways you can expect to gain from your experience in a comprehensive program, including:

• Comprehensive business knowledge – Entrepreneurs should have strong business acumen and a thorough understanding of how successful businesses operate.
• Strategic planning and management skills – Meanwhile, entrepreneurs must be able to identify new opportunities to remain ahead of the competition while responsibly managing all aspects of the business at any given time.
• Financial acumen and resource management – Staying on top of business finances can be challenging, but entrepreneurs need to understand the nuances of business finances, budgeting, accounting, and resource management in order to protect their bottom lines.
• Leadership and team management – The most successful entrepreneurs are those who are able to inspire, motivate, and lead their teams to excellence—which requires the extensive team management and leadership skills that can be gained from a business administration degree program.
• Networking opportunities – Great entrepreneurs know how to build strong professional networks and leverage their business connections to form new partnerships, secure funding, and make other important business moves.
• Adaptability and problem-solving skills – In today’s dynamic and unpredictable business world, entrepreneurs also need to be quick on their feet and able to react to change at a moment’s notice with keen analytical thinking and problem-solving skills.

1. Comprehensive Business Knowledge

As an aspiring entrepreneur, having business acumen  and a firm grasp of how a successful business operates is a must. This includes knowing the key aspects of a business, ranging from its marketing and finance to its day-to-day operations.

Knowing the Different Aspects of Business

In a business administration program, students will learn about the most central aspects of running a business and entrepreneurship, including:

• Marketing  – This entails the various strategies and methods used to advertise and market a brand. Examples of common marketing strategies that entrepreneurs may use include social media marketing, search engine optimization, paid advertising, and local marketing.
• Finance  – Startup businesses require substantial funding to get off the ground, so entrepreneurs need to be familiar with the ins and outs of business finance. This includes being able to determine the amount of funding the business will need to launch as well as projections for ongoing operational costs. Entrepreneurs should also be prepared to seek funding by meeting with investors, applying for grants, and exploring business loans that may suit their needs.
• Operations  – The day-to-day operations of a business can make or break its success in the long term. With this in mind, entrepreneurs should have a solid understanding of the different techniques, tools, resources, and plans that go into daily operations in order to keep things running smoothly and efficiently.

2. Strategic Planning and Management Skills

In addition, successful entrepreneurs need to be experts in strategic planning, leveraging their own planning and management skills to launch and grow their respective businesses over time.

Knowing the Plan to Start and Grow Your Business

One of the most crucial aspects of strategic planning for aspiring entrepreneurs is simply being able to create a  comprehensive plan  that sets their business apart from the competition. This means taking the time to research the competition and identifying opportunities to differentiate and offer something that competitors aren’t currently offering.

From there, the ability to apply strong management skills to develop a long-term business strategy can make all the difference when it comes to growing and scaling a business.

3. Financial Acumen and Resource Management

Another critical aspect of entrepreneurship development that can be learned as part of a business administration degree program is financial acumen, which involves an in-depth understanding of business accounting, funding and financing, budgeting, and resource management.

Being Successful With Financials for Your Business

Entrepreneurs running startup businesses often don’t have the funds to hire large accounting teams, financial advisors, and other professionals to guide them through every step of the way. This is why it’s so essential for entrepreneurs to have their own solid understanding of what it takes to run the financial side of a business while maximizing profits as much as possible.

In a business administration program, students can learn about the different financial components behind a company’s success. From finding ways to secure the initial funding needed to start a company to confidently handling the day-to-day accounting and finances, a business administration program can help aspiring entrepreneurs optimize their budgeting and resource management to protect the company’s bottom line from the beginning.

4. Leadership and Team Management

Entrepreneurs can’t expect to achieve the highest levels of success if they cannot effectively lead, inspire, and motivate others. Thus, those aiming to launch and grow their own successful businesses need to focus on entrepreneurship development through honing  leadership and team management skills  in order to achieve their full potential.

How These Skills Apply to Entrepreneurship

Fortunately, leadership and team management are both heavy focuses throughout a business administration degree program. Students in this type of program can learn about different leadership styles and choose the one that best suits their needs and goals. From there, you can continue to develop your leadership skills as you strive to motivate and inspire your teams to give their best in everything they do.

Additionally, improving team management skills will help you learn how to more effectively delegate tasks, group team members together, and communicate expectations with your teams. All of this can contribute to better outcomes, projects that stay on task and on schedule, and a greater sense of team member satisfaction within your company.

5. Networking Opportunities

A great entrepreneur also knows how to take advantage of personal and professional connections to grow their businesses and explore new opportunities. In a business administration program, students can learn how to build robust professional networks within their respective industries and use them to their advantage.

Understanding the Importance of Connections

No matter what industry your business will operate in, having connections matters. With a solid professional network, you may have an easier time finding business partners to help you explore new opportunities or take on new ventures. Not to mention, connections can also help you procure resources and funding that you may need to turn your business ideas into a reality.

In a business administration program, students can learn the ins and outs of establishing strong professional relationships and building their own networks through mentorship opportunities, networking platforms (like LinkedIn), industry events, and more.

6. Adaptability and Problem-Solving Skills

If there’s one skill that every entrepreneur should possess, it’s adaptability. The business world is highly dynamic, and things can change at a moment’s notice. When a problem arises, successful entrepreneurs must be able to think quickly on their feet to come up with viable solutions.

How College Courses Encourage Critical Thinking and Innovation to Solutions

Enrolling in a business administration degree program gives students the opportunity to explore college courses that encourage critical thinking, creative problem-solving, and other strategies that can help them overcome obstacles when they launch their own businesses down the road. Leveraging these skills, they can handle even the most daunting challenges with grace.

Explore a Business Administration Degree From Carson-Newman

If you’re ready to make your business and entrepreneurship dreams come true, having the right skills and knowledge to enter the fast-paced world of entrepreneurship is a must. The best way to pursue entrepreneurship development is to complete a dedicated business administration program—where you can elevate your business acumen, communication, networking, and leadership skills through hands-on learning.

Carson-Newman is proud to offer a  Bachelor of Business Administration  (BBA) through our  College of Professional Studies  that covers these essential entrepreneurship skills and more. Plus, this bachelor’s degree program is offered entirely online with a minimum of 48 transfer credits, making it an ideal option for those who want to pursue a degree without putting other aspects of life on hold.

Because we’re invested in your success, every student in Carson-Newman University’s business administration program is also assigned an academic advisor, who will help you draft a dedicated course plan tailored to your specific needs and goals.  Learn more  about what we have to offer by reaching out today—or feel free to get started with your online  application .  As a Christian University, Carson-Newman is committed to helping student reach their full potential as educated citizens and worldwide servant leaders.  

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How A.I. Can Help Start Small Businesses

Entrepreneurs say use of artificial intelligence for a variety of tasks is accelerating the path to hiring and, ideally, profitability.

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By Sydney Ember

Sean Ammirati has been teaching a class on entrepreneurship for more than a decade.

A professor at Carnegie Mellon University, Mr. Ammirati has groups of mostly graduate students start businesses from scratch over the course of the spring semester. Some of the start-ups that his 49 students created this year were classic examples of the form: a dating app for couples in long-distance relationships, a personalized fitness app.

But Mr. Ammirati also noticed something unusual.

“I have a pretty good sense how fast the progress that students should make in a semester should be,” he said. “In 14 years, I’ve never seen students make the kind of progress that they made this year.”

And he knew exactly why that was the case. For the first time, Mr. Ammirati had encouraged his students to use generative artificial intelligence as part of their process — “think of generative A.I as your co-founder,” he recalled telling them.

The students began sharing their ideas for use cases on a dedicated Slack channel. They used generative A.I. tools such as ChatGPT, GitHub Copilot and FlowiseAI to help them with tasks including marketing, coding, product development and recruitment of early customers.

By the end of the class in May, venture capitalists were descending on Carnegie Mellon’s campus in Pittsburgh.

“It felt to me like what I felt like in the mid-2000s, when cloud and mobile happened at the same time,” said Mr. Ammirati, who is himself an entrepreneur. Generative A.I., he believed, could similarly change innovation “by an order of magnitude.”

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