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Business Plan: What It Is + How to Write One
Discover what a business plan includes and how writing one can foster your business’s development.
What is a business plan?
A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.
In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes.
Let’s define two main types of business plans , the traditional business pla n and the lean start-up business plan . Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy , and content strategy in more depth. There are some significant differences to keep in mind [ 1 ]:
The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors.
The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan to seek funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks.
Now that you have a clear business plan definition , continue reading to begin writing a detailed plan that will guide your journey as an entrepreneur.
How to write a business plan
In the sections below, you’ll build the following components of your business plan:
Products and services
Marketing plan and sales strategies
Explore each section to bring fresh inspiration to the surface and reveal new possibilities for developing your business. You may choose to adapt the sections, skip over some, or go deeper into others, depending on which format you’re using. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any area of your business.
Read more: What Is a Marketing Plan? And How to Create One
1. Executive summary
This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan.
2. Business description
Use this section to provide detailed information about your company and how it will operate in the marketplace.
Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, your customers?
Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more.
Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.
Legal structure: If you’ve incorporated your business or registered it with your state as a legal entity such as an S-corp or LLC, include the legal structure here and the rationale behind this choice.
3. Competitor analysis
This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following:
Value proposition: What outcome or experience does this brand promise?
Products and services: How does each one solve customer pain points and fulfill desires? What are the price points?
Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?
Sales: What sales process or buyer’s journey does this brand lead customers through?
Read more: What Is Competitor Analysis? And How to Conduct One
4. Products and services
Use this section to describe everything your business offers to its target market . For every product and service, list the following:
The value proposition or promise to customers, in terms of how they will experience it
How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives
The features or outcomes that make the product better than those of competitors
Your price points and how these compare to competitors
5. Marketing plan and sales strategies
In this section, you’ll draw from thorough market research to describe your target market and how you will reach them.
Who are your ideal customers?
How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)?
What are their daily lives like?
What problems and challenges do they experience?
What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?
What messaging will present your products as the best on the market? How will you differentiate messaging from competitors?
On what marketing channels will you position your products and services?
How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?
Read more: Market Analysis: What It Is and How to Conduct One
6. Brand strategy
In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience.
What are the values that define your brand?
What visual elements give your brand a distinctive look and feel?
How will your marketing messaging reflect a distinctive brand voice, including the tone, diction, and sentence-level stylistic choices?
How will your brand look and sound throughout the customer journey?
Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand?
Read more: What Is a Brand Strategy? And How to Create One
7. Financial planning
In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].
Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning.
How many individual products or service packages do you plan to sell over a specific time period?
List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.
What is your break-even point, or the amount you have to sell to cover all expenses?
Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast
Quantify how much capital you have on hand.
When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.
Business plan key takeaways and best practices
Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors.
Keep these best practices in mind:
Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.
Make sure everyone on your team has a copy of the business plan and welcome their input as they perform their roles.
Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success.
Start your business with Coursera
Ready to start your business? Watch this video on the lean approach from the Entrepreneurship Specialization :
1. US Small Business Administration. “ Write Your Business Plan , https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan." Accessed April 19, 2022.
2. Inc. " How to Write the Financial Section of a Business Plan , https://www.inc.com/guides/business-plan-financial-section.html." Accessed April 14, 2022.
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Online Class: How to Write a Business Plan
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Crafting the Blueprint: Mastering the Art of Business Planning
In the bustling world of entrepreneurship, where dreams are vast and the market ever-evolving, having a structured, articulate, and forward-thinking plan is not just advisable, it's indispensable. Many seasoned CPAs assert that the absence of a well-crafted business plan is the prime pitfall for nascent businesses. A business without a plan is like a ship without a compass; it might sail smoothly initially but can easily get lost or capsized amidst unforeseen challenges.
The adage "failing to plan is planning to fail" holds especially true in business. Entrepreneurs often grapple with seemingly minor hurdles, which, with foresight and planning, might have been mere stepping stones. Without a documented strategy, there's no roadmap to visualize, no north star to guide during tumultuous times.
Creating an impactful business plan is an intricate dance of meticulous research, keen understanding, and effective presentation. It's not just a document, but a reflection of your vision, mission, and the very ethos of what your venture stands for. This course aims to meticulously guide you through every nuance of crafting this vital instrument. You'll gain insights into what investors prioritize in a plan, how to make compelling presentations, and which aspects of your business strategy can significantly sway financial outcomes.
Moreover, this course isn’t just about creating a document; it’s about understanding and internalizing the strategic essence of business. We’ll share invaluable writing techniques that provide your plan the sheen of professionalism without the hefty cost of hiring a specialist.
By the culmination of this course, you'll be armed with a reservoir of knowledge, and more importantly, the confidence to create a business plan that not only informs but also impresses and persuades. Let’s set the stage for your business's success!
Course Modules :
Lesson 1: Plan Your Plan Foundations are paramount. Understand the importance of planning before plunging into the writing process. This lesson sets the tone for the entire course, ensuring clarity of vision and purpose.
Lesson 2: Structure and Sequence Learn the anatomy of a robust business plan. Dive into the optimal sequence that resonates with stakeholders, ensuring each section flows seamlessly into the next.
Lesson 3: Important Details Delve deep into the nitty-gritty. Highlighting vital components, this lesson emphasizes elements that can make or break your business strategy.
Lesson 4: The Executive Summary The front window to your business plan, this section often gets the most eyeballs. Understand the art of creating a concise yet comprehensive executive summary that captivates from the get-go.
Lesson 5: Financials Numbers tell a tale. Unravel the intricacies of showcasing your financial projections, understanding investor metrics, and painting a realistic yet promising financial future.
Lesson 6: Market Research The bedrock of any business strategy. Understand your market landscape, identify trends, and learn to present data that validates your business proposition.
Lesson 7: Competition No business exists in a vacuum. This lesson helps you adeptly analyze your competition, identifying gaps in the market and positioning your business as a front runner.
Lesson 8: Support Documents and Working Your Plan It's not just about creating the plan but living it. Learn the importance of auxiliary documents and the iterative process of refining your strategy as your business evolves.
Your business idea deserves a blueprint that mirrors its potential. Dive into this course and sculpt a business plan that stands as a testament to your vision, dedication, and entrepreneurial spirit. Here's to planning for prosperity!
Before you take this course, you'll want to gather the following information:
1. Executive Summary
- Think sales pitch. This is where investors look to get a pulse for your business, its viability, profitability, and potential for a return on their investment.
- Think job interview. The executives you will allow to read this summary will be those in banking or merchant relationships from whom you seek favor. Be sure you write this summary so that the reader feels informed, respected, and confident in your abilities and experience.
- All inclusive by main points. Let the reader feel the shortness of your points.
- Remember "summary"; details are in the plan's additional sections.
2. Company Profile
- Company Mission Statement. A one sentence statement that precisely describes your company's purpose; a stated directive.
- Company Vision Statement. The paint in the picture of your company and its direction.
- Legal structure and month and year of company beginnings, also known as the business form; how you registered your company with the local or state authorities when you filed your paperwork.
- Historical context. If you are a new upstart, explain how your company developed and from what historical concept. If you are an established company, you will want to include 1-3 sentences about your founding days, 1-3 sentences about your most recent company accomplishments, all the way back to major accomplishments made 5 years ago.
3. Products and Services Description
- Include products descriptions in a separate section rather than in services descriptions.
- New products or services should be listed as "new" or "upcoming" to conveniently show steady growth.
4. Marketing Plan and Marketing Strategy
Marketing Research should be included here as well. Your research should include primary research information that you or your staff has conducted to determine your own local market information and demographics for your local market.
There should be a stated and outlined Marketing Strategy for getting your products or services direct exposure to the marketplace in which you hope to operate. How are you going to reach your market?
A well written Marketing Plan must include your company's "Plan of Action" for the next 2-3 years at minimum. This portion of your plan should be spelled out in detail and should perhaps include financial or market research statistics.
5. Target Market or Customers
Your Target Market and your customers will be close in demographics, needs, and perceptions. Be prepared to find out all you can about them. Statistics on their needs and personalities will be important in this section.
- What is it about your product or service that makes your customers exclusively attracted to your company?
- How does your company stand out in serving your community of clients?
- How does your product or service appeal to their needs?
What portion of your Target Market will be tempted from your competition? Which segments of your Target Market will become loyal to your company and why?
- You must be able to succinctly state your competition's strengths and weaknesses in this section. Know what they offer that gives them an edge over your company, and if your company has the advantage, then acknowledge it and state why.
- Your competition's range of rates must be stated either in extremes, averages, or both. How does your competition stack up to industry averages; how do you?
- Clearly outline what it is that you offer to the client that gives your company an advantageous edge over your competition. Whenever and wherever possible be ready to exploit the rates, statistics, advertising, client requests, or any other thing to underscore to the business plan reader the clear and distinct advantage your company has over your local competition.
7. Advertising and Promotions
- Outline for the reader what type of Advertising and Promotions your company will need to run to stay in the competitive arena in your local market.
- Offer examples of expense rates necessary to properly Advertise and Promote your products or services.
- State any current discounts or special deals that you expect to keep in place within the next 12 to 24 months.
8. Sales and Distribution
How many sales staff do you currently employ? How many do you expect to have on staff in the next 24 months?
What are your sales projections for the next 24 months? Where are you getting your calculations and how are you making your estimates? What is your company's projected sales growth [usually stated in percentages] over last year?
How are your products and services distributed? Do you have a retail outlet? Are you distributing your products or services over the internet? Using regular mail? Through some industry standard? [Example: books with a network of book stores and distributors].
9. Operations and Operational Plan
How does your company operate on a daily basis? Are you online, on the phone, or in a retail location? Do you depend primarily on advertising, on door to door direct sales, or on phone sales?
What is your Operational Plan and how do you implement it on a daily basis?
Define the variables in your Operational Plan and how you expect them to affect your company's success.
10. Client Account Management and Credit Policies
Explain, in brief, how your company manages Client Accounts, particularly as it relates to money, billing, and collection policies.
What are your company's payment and refund policies? Be sure to have these policies posted in the public arena somewhere close to your client's purchase opportunity. If the client checks out online, make sure you have a Policy Page on your website that clearly informs the customer of these policies. If you are retail only, then make sure your policy is posted near the checkout counter. Either way, you will want to reiterate that policy and tell where it is posted in your operations within the context of this section of your business plan.
11. Accounting and Management - Cash Flow statements & Management structure
How does your company handle its accounting? Do you have a staff accountant? Do you use a monthly service? Do you handle it yourself and then have it quarterly or annually reconciled by a professional CPA? Bankers, investors and foundations are all typical sources that will be interested in this segment of your business plan. Make sure you answer their business accounting questions here so you don't get quietly eliminated without further inquiry or discussion.
Include current Cash Flow statements, at least from the last year. If you have been in business longer, include 2-3 years of quarterly or annual Cash Flow statements. Two or three pages are the maximum size for this section.
How does your management team handle finances? Do they receive monthly P&Ls (Profit and Loss) that they can reconcile and examine for financial leaks or improvements?
12. Financial Planning and Projected Balance Sheet
Take the time and invest the money in a professionally prepared Financial Plan for your company. If you are a sole proprietor, then you will include an abbreviated version of your personal Financial Plan. All other business structures cannot use any portion of their personal financial plan; rather draft a separate Financial Plan for your business and include it here.
From your best calculations, create a set of Projected Balance Sheets for the next 2 years. This helps bankers and other investors determine what your expected return-on-investment will be and how they can estimate the value of your company.
This section can include any number of supporting documents, and should include as many of the following as is reasonably useful for the financial aspect of your business plan. Keep in mind here, if it doesn't help to sell the value and ROI (Return on Investment) of your company, then it doesn't belong here.
Some examples of excellent supporting documents include: preprinted advertising brochures your company distributes [sales pitch], industry or market studies, especially those published by governmental offices, and others.
There may be an occasion to leave out one or more of these segments, but if you do, then be prepared to insert a blank page with a title and a two sentence explanation as to why it is unnecessary to fully develop the missing portion.
- Completely Online
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- 24/7 Availability
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Lesson 1. Plan Your Plan
Lesson 2. Structure and Sequence
Lesson 3. important details, lesson 4. the executive summary, lesson 5. financials, lesson 6. market research, lesson 7. competition, lesson 8. support documents and working your plan, learning outcomes.
- Plan your business writing plan.
- Define structure and sequence in the scope of a business plan.
- Describe the important details of a business writing plan.
- Describe the executive summary.
- Summarize the financials.
- Identify and describe market research
- Analyze the competition.
- Demonstrate mastery of lesson content at levels of 70% or higher.
Additional Course Information
- Document Your Lifelong Learning Achievements
- Earn an Official Certificate Documenting Course Hours and CEUs
- Verify Your Certificate with a Unique Serial Number Online
- View and Share Your Certificate Online or Download/Print as PDF
- Display Your Certificate on Your Resume and Promote Your Achievements Using Social Media
Choose Your Subscription Plan
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- "This course was truly helpful and needful in giving the information in the respected areas." -- Mr fred K.
- "What was most helpful was the structure and Content sections. They were very complete." -- Steven C.
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Launch a successful Ad Grants campaign
Plan, build, and launch a digital marketing campaign with Google Ad Grants.
Local Opportunity Finder
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Manage a project with digital tools
Plan a team project, track its progress and costs, and prepare a summary report.
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Online business security
Learn the basics of online security, and how they apply to you and your business.
Maximise your reach by accessing new inventory, formats and audiences across all of Google channels.
Prepare for your business plan
Research and organise information to write a business plan. Learn document formatting, writing strategies, and more.
Put digital to work for your retail business
Free-of-charge lessons and resources to help your retail business be discovered, reach more customers and sell more.
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Small business marketing toolkit
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Write a business plan
Define and organise your business's growth by writing a business plan.
Checkpoint Learning Message
How to Write a Business Plan
This comprehensive course covers all aspects of developing business plans. Thorough attention is given to sales revenue, production, research and development, marketing and distribution, and sales administration. The program also examines writing financial plans and implementing business plans. This basic level course is most beneficial to professionals new to business plans who may be at the staff or entry level in organization but also for an experienced professional with limited exposure to this topic.
Included with subscription(s):
- Premier Plus CPE Package
- Premier CPE Package
- Professional CPE Package
How to Write a Business Plan
- NY Credits : 6.0
- TX Credits : 6.0
Upon successful completion of this course, the user should be able to:
identify assumptions and objectives related to the business plan;
recognize the business plan for sales, production, research and development, and marketing and distribution;
determine appropriate feedback and business plans for the sales department and the administrative department; and
recognize an effective financial plan and the completed business plan.
- An Introduction to the Business Plan
- Reasons for Using a Business Plan
- The Many Benefits of Using a Business Plan
- Developing the Appropriate Mindset for Creating a Business Plan
- Developing the Plan: Four Considerations
- A Summary of the Steps to Developing a Business Plan
- Developing Assumptions and Objectives
- Determining Where the Company Is Currently Positioned
- Determining What Values There Are for the Factors That Affect the Company
- Determining the Objectives of the Business Plan
- The Sales Revenue Plan
- Developing the Sales Revenue Plan
- Gathering Data and the Basis of Future Sales
- Expected Industry and Market Changes
- Writing the Sales Revenue Plan
- Constraints to the Sales Revenue Plan
- Creating a Production Schedule
- Determining Direct Resource Requirements
- Determining Indirect Resource Requirements
- Total Production Costs and Costs of Goods Sold
- Retail and Service Businesses
- Writing the Production Plan
- The Various Functions of Research and Development
- Writing the Research and Development Plan
- The Various Functions of Marketing and Distribution
- Writing the Marketing and Distribution Plan
- Feedback and Constraints or Opportunities to the Sales Revenue Plan
- Research and Development and Marketing and Distribution Constraints and Opportunities
- The Administrative Plan
- Overall Discussion of Financial Plan
- The Statement of Activities
- Statement of Financial Position, Statement of Cash Flows, and Statistical Summary
- The Operating Budget
- Writing the Financial Plan: The Necessary Steps
- The Remaining Parts of the Business Plan and a Summary of All Parts
- The Remaining Parts of the Financial Plan
- Putting the Business Plan into Effect
Additional Compliance Information
Write a Business Plan
Define and organize your business's growth by writing a business plan.
- Teaching Materials
Time to complete
access_time 45—90 minutes
- Effective communication
- Internet search
- Writing strategies