June 29, 2022 | Growth and Expansion
The Startup Business Plan: Why It’s Important and How You Can Create One
What is it about a business plan that makes it such an essential ingredient for success? Let’s take a closer look!
Why a Business Plan Is So Important
We’ve all read the stories of million-dollar businesses that started with a few ideas jotted on a scrap of paper or a bar napkin. But in reality, how many of those businesses grew to million-dollar sales without developing a business plan at some point? A business plan helps you answer important questions such as what is the best business model, what is the future path of the business, and how is the business going to reach its goals? Beyond that, formally-developed business plans serve a number of purposes.
Helps You Articulate Your Vision
A business plan gives you a means for capturing your entrepreneurial vision in writing. It enables you to fine-tune your aspirations and recognize where there are gaps or inconsistencies in what you want to accomplish. It also helps you spell out your business’s purpose and describe the products and services you’ll offer in detail. Rather than keep that info in your head, a business plan frees up your mind to concentrate on what you must do to fulfill your vision.
Helps You Understand Your Industry, Market, and Competition
As you work through the process of writing a business plan, you’ll have an opportunity to gain valuable knowledge about your business strengths, weaknesses, opportunities, and threats. You’ll learn a lot through conducting industry, market, and competitive research. Many entrepreneurs make assumptions about these things, and research is the only way to validate preconceived notions. A business plan helps you better understand your competition, the market you’re entering, and customer trends and preferences. It also helps you recognize possible roadblocks (which could come in many forms, such as the regulatory environment, technology, and other forces within or beyond your control).
Helps Access the Viability of Your Business Idea
According to data provided by the U.S. Bureau of Labor Statistics, only about half of private-sector businesses started in 2014 survived into 2019. Surely, the entrepreneurs who started those now-defunct businesses didn’t set out with the goal of failure. It’s more likely that they neglected to do the work involved to assess the feasibility of their business ideas and create a plan to guide them through the startup process and beyond. A business plan will help you identify red flags in advance. It’s an excellent way to do a “reality check” and recognize warning signs of impending doom. With a realistic view of whether your business idea has a chance of success, you can make an informed decision about whether to move forward, cease and desist, or alter your course.
Provides a Road Map for Launching Your Business
A business plan is also important because it provides direction as you work through the many tasks involved in starting a business. Writing a business plan helps ensure you’ve thought through all of the considerations and requirements. It forces you to think through important decisions in advance and set goals and objectives for which you want to aim. Moreover, a business plan will help keep you on track with all of the tasks required to start your business and operate it legally. For example, registering your business entity type, applying for the licenses and permits you’ll need to obtain, and other mission-critical details.
Helps Address Unseen Flaws
By capturing your vision in a business plan, you’ll be equipped to share it and get feedback. Seek the honest, unbiased thoughts and advice of trusted professionals, friends, family members, and colleagues who will be willing to give you their honest, unbiased thoughts. Doing so can help you identify problem areas that you couldn’t see on your own. From there, you can fine-tune your plan.
Helps Identify the Talent Needed for Moving Your Vision Forward
Starting a business is time-consuming and there may be tasks that will require specialized expertise or skills that you personally do not possess. Understanding legal matters, creating financial reports and forecasts, developing a website, and managing payroll are just a few of the responsibilities that you may not be able to handle on your own. A business plan will help you identify resource needs so that you can begin to look for employees, advisors, contractors, or companies with the knowledge and talent you require.
It Can Equip You to Find the Right Suppliers
A business plan will help you identify what materials you’ll need to offer your products and services. In turn, it will shed light on the criteria you must look for in potential suppliers. For example, if an entrepreneur plans to manufacture all-vegan, organic spa products, the business plan will help dictate the standards the company will look for in its vendors.
Helps You Set Priorities
By seeing all the moving parts involved in starting your business in one place, you can decide what needs your attention first and what can wait. A business plan will help you keep track of what you must do and determine how to allocate your time, energy, and resources wisely.
Helps Set Realistic Goals and Objectives
A business plan will help make you more intentional about setting goals and objectives for your company. Moreover, having goals in writing facilitates a higher level of accountability for your long-term vision. It provides an incentive to look at your business’s potential realistically and to question assumptions. By using your business plan as a guide, you will be reminded to focus attention on both the operational and financial objectives of your startup.
Helps Attract Investors and Obtain Financing
Lenders like banks and credit unions and other institutions will want to see a business plan. Investors will want to see a business plan so they can assess if the business idea will be a sound investment. A business plan is essential for securing funding (such as from bank loans or equity financing) or attracting investors (like venture capitalists or angel investors). Sure, a dazzling presentation akin to what you see on Shark Tank may pique investor interest. However, you’ll want to provide a well-written document that potential investors can review to evaluate the opportunities and risks of financing your business idea.
Helps Cultivate Sound Decisions
Having a business plan allows you to make better decisions because it helps prevent decision-making on the fly. It gives you strategic direction, so fewer outcomes are left to chance. Not only is a business plan important for startups, but it’s also a valuable tool for established businesses. All businesses change and grow. All industries evolve. Therefore, a business plan should be approached as a living, breathing document that needs to adapt to the circumstances at hand and its environment. Entrepreneurs should review and update their business plans regularly. This is especially critical when they see shifts in their market, competition, industry, company growth, financial status, and other critical areas. By keeping your business plan current, you’ll be better equipped to navigate change and make adjustments to stay on the path to success.
Serve as a Communication Tool
You can use your business plan to communicate your vision and business projections with key stakeholders. Potential lenders, investors, project partners, suppliers, key employees, major clients, etc. may rely on the details in your business plan to assess whether working with you will be a sound decision for them.
The Risks of Not Having a Business Plan
Several potential risks that entrepreneurs might face if they neglect to write a business plan for their startup include:
- Running out of money because they haven’t identified all of the startup costs involved in launching the business.
- Unable to sustain running the business down the road because they failed to identify all ongoing costs involved in operating the business.
- Selling products and services that aren’t profitable because they didn’t identify all the time and labor involved in providing them.
- Not attracting customers because there is no market need for the company’s products and services.
- Not attracting customers because competitors’ products and services are superior.
- Facing fines, penalties, and even suspension or administrative dissolution of their company because they didn’t identify their business compliance responsibilities.
All bad stuff, right? I could go on and on about possible downsides. But I believe those examples amply demonstrate why it is important to have a business plan!
Critical Questions to Consider
Like any new endeavor, developing a business plan might seem like an overwhelming task. Challenges include choosing the right verbiage, knowing what to include and what to leave out, where to find statistics and marketing information to back up your ideas and add credibility to your plan, and more.
Don’t let the details prevent you from moving forward. As with any big task, writing a business plan is less daunting if you break it down into smaller sections that are easier to execute.
Before you jump into actually writing your business plan, take a minute to answer the following questions to get your head in the right frame of mind:
- What products or services will you be selling?
- Who is your target market?
- Is your target market broken down into personas or subgroups?
- What pain points, challenges, and struggles do your future customers struggle with?
- How will your product or service help your customer solve problems?
- Who is your competition?
- How does your offering compare to what your competitors offer?
- How much will you charge for your products or service offering?
- What costs will go into the development or execution of your products or services?
- What software will you require to run your operations?
- What type of building or office space will be required for manufacturing, operations, logistics, or sales?
- What resources and staff will you need?
- What type of supplier or manufacturing relationships will be needed to secure your supply chain?
- Are there any possible spinoffs or ancillary products and services?
- How will you market your offering to prospective customers?
- What is your measure of business success (for example, number of customers or annual net income)?
- What are the obstacles to your success?
- What are your solutions to these obstacles?
Core Elements of a Startup Business Plan
These days, successful startups create business plans that come in a variety of shapes and sizes. Some take up no more than a few pages and can be explained in no more than a few minutes, while others are much longer presentations with clearly defined data points. Founders and their most trusted team members start with a predominant vision and develop goals and strategies aimed at seeing that vision come to light.
Whether they develop their own methodology or use one more methodology created and published by experienced consultants and agencies, successful startups take the time to create a plan that keeps them on track but allows them the freedom to pivot when they need to. From a guiding vision to regular checkpoints, and an expectation of accountability, these plans are the new business roadmap.
The sections of a business plan may vary for different businesses. Many business plans include the following segments.
The Executive Summary (Company Description)
Here’s your chance to make a good first impression—especially since many readers won’t read past this initial section. Concisely describe what your company does in the first paragraph of your Executive Summary. Be succinct, descriptive, and engaging, and explain the specifics of your business. Why did you choose your business name? Why did you choose your business structure ? Why is your business uniquely qualified to succeed? Is it your intellectual property, your management team’s unique and/or extensive background, your startup’s early (standout) accomplishments, your key partnerships, or favorable market trends?
In this section, you should also summarize your vision and your goals. In the beginning stages of a startup, entrepreneurs tend to improvise, and their vision may be a bit hazy. Developing a business plan helps sharpen that vision, and down the road helps the startup succeed. But keep in mind, where businesses of the past started with “what” they were going to produce, market, and sell to “whom”, modern-day businesses start with “why”. Their visions tell a story of a better world for a specific group of people. These visions are backed by core values that define what is important to the founders, the types of employees they want on their team, and the way that their organization will interact internally and with the outside world.
Products or Services
In this section, go into more detail about your service or product. Thoroughly describe your product or service and any associated intellectual property information such as patents or trademarks. Describe what makes your product or service unique and competitive in the marketplace. Most likely your business has more than one product or service, so be sure to provide a brief description of each. Use colorful photos or drawings to illustrate your business and include relevant details such as dimensions, weights, and shelf life. For service businesses, outline your menu of services and any add-ons or extras customers can purchase.
Do you have plans to add new products or services as your business grows? If so, outline the areas of opportunity you see. Explain what you plan to add to your offerings and how that will make your business more competitive.
Market or Situational Analysis
In this section, you need to provide detailed statistics and research on your target market. In a traditional business plan, this was called “SWOT Analysis”, in which companies outlined an exhaustive list of Strengths, Weaknesses, Opportunities, and Threats. In today’s market, this is can be a more fluid conversation.
Colorful visuals are important here to help highlight the key numbers and demographics supporting the validity of your business idea. Use your market research to explain why your business is different and how it will appeal to your prospective customers. Show the reader that you know your market and you understand where your best prospects lie.
Are there new markets you’ll explore in the future, new product lines you plan to add, or new services you expect to develop as the business grows? Include them here. You should also include information about your sales and marketing strategies, such as digital, print, word-of-mouth, etc.
Where to get all those facts and figures?
- The American Factfinder section of the Census Bureau website has helpful marketing research and consumer data for free. You can search for market information by specific address, by city and state, and find specific city demographics such as social, economic and housing characteristics. You can also look for business patterns statistics and key populations by county.
- eMarketer.com is a great source for information on online marketing trends.
- If you’re not finding the market research you want or you need help gathering the research, check out Ask Your Target Market . AYTM gives you the tools to conduct your own market surveys. Or, if you don’t feel you’re qualified to put the survey together, AYTM will create the survey for you.
Company Goals and Objectives
While many plans still include a 3-5 year estimate on sales, market share, and/or valuation, most goals are set in 60-120 day intervals. Personally, I prefer to use quarterly (90 day) cycles and roll that up for the purposes of a startup business plan. That allows you to significantly move the needle four times a year and accounts for typical swings in business based on the quarter. For example, retail businesses are completely different in Q4 during the holidays than they are in Q1.
The shorter time period allows you to focus everyone’s attention on a limited number of goals and resulting projects. I’d recommend no more than four major items in a quarter. If you’re launching a new business, the four goals for your first quarter might be something like:
- File incorporation documents
- Set up bank accounts
- Launch website
- Sign on the first client
Whether it’s just you, you and partner, or a whole team – if it’s not on this list (and not part of regular business operations), it doesn’t get touched. This will allow you to stick to your startup plan and get it moving quickly.
Operational Plan & Team Members
The organization and management section of the business plan tells your readers about the organizational structure of your business and which key employees or owners are responsible for key areas of the business, such as operations, sales, finances, etc. Make sure your business plan explains how each key employee adds to the success potential of your business by explaining their expertise, special skills, and prior experience.
If you’re a sole proprietor , you most likely outsource some of your work or special projects to independent contractors or freelancers. In that case, including information on their expertise, as well as that of any business consultants you regularly engage with or have on your board of advisors.
Finally, since readers want to see your potential for growth, you should also project how your org chart will develop as the business grows and what positions you plan to add in the future.
This section outlines what your business will accomplish financially over the next three to five years. The Panel Study of Entrepreneurial Dynamics II found that business plans are vital for external fundraising because a plan builds legitimacy and confidence among investors that the entrepreneur is serious. It also serves to reassure staff, suppliers, customers, and other key stakeholders.
Potential investors, creditors, and business partners want to know whether they’re making a good investment in your business. Having solid projections and supportable figures in this section of the plan is key. If you are developing a business plan to seek immediate funding, you also need to include a formal funding request. This should specify how much you need, both now and in the future, and what the money will be used for. Go over this section with your accountant to make sure everything is worded correctly and that your numbers make sense.
Supporting data and documentation that provides additional detail about what is in the other sections of the business plan.
Popular Planning Methodologies You Can Use
Planning strategies are fairly customized now. There’s not a one-size-fits-all document like the old business plan. You really are free to create a strategy that works for your organization. But, if you’d like some framework to guide you through the process, here are some popular methodologies that many startups have used to create and help execute their business plan.
- Gazelles (Scaling Up) – This well-documented program walks you through the creation of a “One Page Strategic Plan”. It covers everything from setting goals to reviewing progress and making decisions on what to do next. It serves as a blueprint for building an effective strategy. While I always modify it to fit a particular business, this is the structure I use when developing strategies for my companies, and for my clients.
- Entrepreneurial Operating System (Traction) – There are several similarities between EOS and the Gazelles’ Scaling Up program. Traction spends more time on meeting rhythms, feedback loops, process documentation, and organizing documents and workflow. Many startups tend to use EOS in conjunction with Scaling Up to flesh out the operational strategy that supports the larger and creative goals.
- The Lean Startup – For those of you that are less interested in a structured program for developing a strategic plan, and simply want to learn more about how companies are creating flexible, scalable businesses, I suggest researching and following The Lean Startup movement. Here, Eric Ries uses stories and examples to describe how executive teams can apply lean manufacturing principles to business management.
Remember to Revisit and Review Your Plan
Last but not least, your planning strategy should include a system for documenting processes and reviewing them on a regular basis. While this may sound like a tedious task that doesn’t belong in a fast-paced business, hear me out.
Documenting processes and reviewing them regularly has huge benefits:
- As you scale you’ll need to delegate tasks, projects, and accountability to more team members. If processes are documented, and not just in your head, or in your managers’ heads, they are easier to transfer to new staff.
- Reviewing processes helps founders and managers stay in the loop on how work is getting done.
- Reviewing and comparing processes allows you and your team to spot redundancies, and identify areas where processes should be combined, or split in different ways to achieve a more productive workflow.
- Reviewing processes allows you and your team to look for opportunities to automate manual processes. This often leads to cost-savings and frees up one of your team members’ time for more creative thinking.
If you skip this part of your planning strategy, you risk creating and fostering systems that are duplicated, redundant, outdated, and unnecessary because everyone continues doing what they’ve always done… because that’s the way they’ve always been done. That’s no way to grow a profitable, long-term business.
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Why You Should Write a Business Plan
Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.
To Test the Feasibility of Your Business Idea
To give your new business the best chance of success, to secure funding, to make business planning manageable and effective, to attract investors, frequently asked questions (faqs).
The Balance / Getty Images
A business plan is the blueprint for your business. Starting a business without a business plan is like building a house without a blueprint. Yet, unlike a house, a business isn't static. We often make the mistake of thinking of a business plan as a single document that you put together once when you're starting out and never touch again. But as the business develops, so should its business plan. In fact, any particular business may have multiple business plans as its objectives change.
Writing a business plan is time-consuming, but it's essential if you want to have a successful business that's going to survive the startup phase.
- Writing a business plan reveals how tenable your idea is.
- Updating and amending a business plan as the business develops and its goals change is vital to your success.
- A good business plan helps you define your target market, competitive advantage, optimum pricing strategies, and better prepares the business for upcoming challenges.
- A business plan helps you secure funding and attract new investors.
Writing a business plan is the best way—other than going out and doing it—to test whether an idea for starting a business is feasible. In this sense, the business plan is your safety net. If working through a business plan reveals that your business idea is untenable, it will save you a great deal of time and money.
Often, an idea for starting a business is discarded at the marketing analysis or competitive analysis stage , freeing you to move on to a new (and better) idea.
Unfortunately, many prospective business owners are so convinced that their idea for a product or service is a can't-miss proposition, that they don't take the time to do the necessary research and work through a proper business plan. The more you know about your industry, your prospective customers, and the competition, the greater the likelihood that your business will succeed.
Writing a business plan will ensure that you pay attention to the broad operational and financial objectives of your new business and the small details, such as budgeting and market planning. The process will ultimately make for a smoother startup period and fewer unforeseen problems as your business gets up and running.
The exercise of budgeting and market planning will help you define your target market , your unique selling proposition, optimum pricing strategies, and outline how you intend to sell and deliver your products to customers. In addition, developing a budget for implementation will assist with determining your startup and operating capital requirements.
According to the Small Business Administration, one of the most-cited reasons why businesses fail is inadequate planning. By starting too soon and without a sufficient plan, your business is setting itself up for failure.
Most new businesses need startup and operating capital to get off the ground. Without a well-developed business plan, there is no chance of getting debt financing from established financial institutions such as banks or equity financing from angel investors.
Established businesses often need money, too, to buy new equipment or property, or because of market downturns. Having an up-to-date business plan gives you a much better chance of getting the money you need to keep operating or expand.
Even an angel investor will want to ensure their money is going to a business that knows what it's doing. The easiest way to prove this is via a well-developed business plan.
Investors and financiers are always looking at the risk of default, and word of mouth is no substitute for written facts and figures in a properly prepared business plan.
A business plan is essential if you're thinking of starting a business, but it's also an important tool for established businesses. Viable businesses are dynamic; they change and grow. Your company's original business plan needs to be revised as you set new goals .
Reviewing the business plan can also help you see what goals have been accomplished, what changes need to be made, or what new directions your company's growth should take.
Whether you want to shop your business to venture capitalists or attract angel investors , you need to have a solid business plan. A presentation may pique their interest, but they'll need a well-written document they can study before they'll be prepared to make any investment commitment.
Be prepared to have your business plan scrutinized. Both venture capitalists and angel investors will want to conduct extensive background checks and competitive analyses to be certain that what's written in your business plan is indeed the case.
What are the sections of a business plan?
A comprehensive business plan should include the following sections:
- Executive summary
- Company description
- Competitor analysis
- Industry analysis
- Product and services description
- Financial data
What is the purpose of a business plan?
A business plan has four main purposes:
- Tests the feasibility and model of your business idea
- Attracts investors
- Sets a plan for growth
- Identifies capital needs
Small Business Administration. " Selecting a Business That Fits ."
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Nine reasons why you need a business plan
Building a great business plan helps you plan, strategize and succeed. Presented by Chase for Business .
Making the decision to create a new business is an exciting yet stressful experience. Starting a business involves many tasks and obstacles, so it’s important to focus before you take action. A solid business plan can provide direction, help you attract investors and ensure you maintain momentum.
No matter what industry you plan on going into, a business plan is the first step for any successful enterprise. Building your business plan helps you figure out where you want your business to go and identify the necessary steps to get you there. This is a key document for your company to both guide your actions and track your progress.
What is the purpose of a business plan?
Think of a business plan like a roadmap. It enables you to solve problems and make key business decisions, such as marketing and competitive analysis, customer and market analysis and logistics and operations plans.
It can also help you organize your thoughts and goals, as well as give you a better idea of how your company will work. Good planning is often the difference between success and failure.
Here are nine reasons your company needs a business plan.
1. Prove your idea is viable
Through the process of writing a business plan, you can assess whether your company will be successful. Understanding market dynamics, as well as competitors, will help determine if your idea is viable.
This is also the time to develop financial projections for your business plan, like estimated startup costs, a profit and loss forecast, a break-even analysis and a cash flow statement . By taking time to investigate the viability of your idea, you can build goals and strategies to support your path to success.
A proper business plan proves to all interested parties—including potential investors, customers, employees, partners and most importantly yourself — that you are serious about your business.
2. Set important goals
As a business owner, the bulk of your time will mostly likely be spent managing day-to-day tasks. As a result, it might be hard to find time after you launch your business to set goals and milestones. Writing a business plan allows you to lay out significant goals for yourself ahead of time for three or even five years down the road. Create both short- and long-term business goals.
3. Reduce potential risks
Prevent your business from falling victim to unexpected dangers by researching before you break ground. A business plan opens your eyes to potential risks that your business could face. Don’t be afraid to ask yourself the hard questions that may need research and analysis to answer. This is also good practice in how your business would actually manage issues when they arise. Incorporate a contingency plan that identifies risks and how you would respond to them effectively.
The most common reasons businesses fail include:
- Lack of capital
- Lack of market impact or need
- Unresearched pricing (too high or low)
- Explosive growth that drains all your capital
- Stiff competition
Lack of capital is the most prevalent reason why businesses fail. To best alleviate this problem, take time to determine how your business will generate revenue. Build a comprehensive model to help mitigate future risks and long-term pain points. This can be turned into a tool to manage growth and expansion.
4. Secure investments
Whether you’re planning to apply for an SBA loan , build a relationship with angel investors or seek venture capital funding, you need more than just an elevator pitch to get funding. All credible investors will want to review your business plan. Although investors will focus on the financial aspects of the plan, they will also want to see if you’ve spent time researching your industry, developed a viable product or service and created a strong marketing strategy.
While building your business plan, think about how much raised capital you need to get your idea off the ground. Determine exactly how much funding you’ll need and what you will use it for. This is essential for raising and employing capital.
5. Allot resources and plan purchases
You will have many investments to make at the launch of your business, such as product and services development, new technology, hiring, operations, sales and marketing. Resource planning is an important part of your business plan. It gives you an idea of how much you’ll need to spend on resources and it ensures your business will manage those resources effectively.
A business plan provides clarity about necessary assets and investment for each item. A good business plan can also determine when it is feasible to expand to a larger store or workspace.
In your plan, include research on new products and services, where you can buy reliable equipment and what technologies you may need. Allocate capital and plan how you’ll fund major purchases, such as with a Chase small business checking account or business credit card .
6. Build your team
From seasoned executives to skilled labor, a compelling business plan can help you attract top-tier talent, ideally inspiring management and employees long after hiring. Business plans include an overview of your executive team as well as the different roles you need filled immediately and further down the line.
Small businesses often employ specialized consultants, contractors and freelancers for individual tasks such as marketing, accounting and legal assistance. Sharing a business plan helps the larger team work collectively in the same direction.
This will also come into play when you begin working with any new partners. As a new business, a potential partner may ask to see your business plan. Building partnerships takes time and money, and with a solid business plan you have the opportunity to attract and work with the type of partners your new business needs.
7. Share your vision
When you start a business, it's easy to assume you'll be available to guide your team. A business plan helps your team and investors understand your vision for the company. Your plan will outline your goals and can help your team make decisions or take action on your behalf. Share your business plan with employees to align your full staff toward a collective goal or objective for the company. Consider employee and stakeholder ownership as a compelling and motivating force.
8. Develop a marketing strategy
A marketing strategy details how you will reach your customers and build brand awareness. The clearer your brand positioning is to investors, customers, partners and employees, the more successful your business will be.
Important questions to consider as you build your marketing strategy include:
- What industry segments are we pursuing?
- What is the value proposition of the products or services we plan to offer?
- Who are our customers?
- How will we retain our customers and keep them engaged with our products or services and marketing?
- What is our advertising budget?
- What price will we charge?
- What is the overall look and feel of our brand? What are our brand guidelines?
- Will we need to hire marketing experts to help us create our brand?
- Who are our competitors? What marketing strategies have worked (or not worked) for them?
With a thoughtful marketing strategy integrated into your business plan, your company goals are significantly more in reach.
9. Focus your energy
Your business plan determines which areas of your business to focus on while also avoiding possible distractions. It provides a roadmap for critical tradeoffs and resource allocation.
As a business owner, you will feel the urge to solve all of your internal and customers’ problems, but it is important to maintain focus. Keep your priorities at the top of your mind as you set off to build your company.
As a small business owner, writing a business plan should be one of your first priorities. Read our checklist for starting a business, and learn how to take your business from a plan to reality. When you’re ready to get started, talk with a Chase business banker to open a Chase business checking or savings account today.
For Informational/Educational Purposes Only: The views expressed in this article may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.
JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender, ©2023 JPMorgan Chase & Co
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How to Write a Startup Business Plan
A startup business plan is an outline of your ideas and strategies for what you’ll need to do to start, manage, and even complete your startup’s mission. Creating one might sound simple enough, but because it’s a startup’s roadmap for success, it can be a complex document to create.
Writing a business plan can make a world of difference for entrepreneurs who desire external funding. It involves determining your target customers, understanding what makes them tick, and figuring out how to reach them through marketing campaigns.
In this blog post, we’ve explained why you should have a startup business plan, different types of startup business plans, and we’ve included 12 of the most effective tips for writing a startup business plan. If you’re ready to start with now, we have a product launch template to get you started quickly.
What is a startup business plan?
A startup business plan is a written document that outlines your ideas and strategies for launching, managing, and eventually exiting your new venture.
A well-constructed business plan can be crucial to the success of any entrepreneurial endeavor . As you prepare your proposal, keep in mind that it will evolve as you learn more about your market.
To start, create an outline of the most important items you'd like feedback on before writing anything down officially.
Then ask yourself these questions:
- What do I want?
- Why does my company exist?
- How will I make money?
- What are my long-term goals?
A detailed business plan helps you set milestones for measuring success. You can share the plan with investors who may want some reassurance on the viability of their investment in your company.
The best way to create a successful startup business plan is by including everything in an organized and easy-to-read document — marketing strategies, financial projections, team bios, timelines, and more.
What is a lean startup business plan?
A lean startup business plan is a method for developing products that relies on iterative experimentation to reduce uncertainty.
It has been used by companies such as Google , Amazon, and Facebook in the early stages of their development, and involves testing your idea with real customers early in development.
Lean startups are less likely to fail because they have tested their product or service with live feedback from consumers. Doing this allows them to make changes quickly without wasting resources on something no one wants.
The goal is not to build an extensive business plan but rather a "lean" one that can be changed based on customer feedback and then re-evaluated in regular intervals until it reaches market potential — or fails.
A lean startup business plan is a strategy that focuses on getting a product in front of customers as quickly and cheaply as possible. Use the lean startup business plan to validate your ideas before wasting time and resources.
Why do you need a small startup business plan?
A small startup business plan is one of the most important steps in building a company. Apart from helping you to focus on company goals, it aids in obtaining feedback from potential partners and keeps the team on the same page.
The best thing about starting small? You can change course at any time! If you need help developing or tweaking your small startup business plan, use this guide for entrepreneurs to get started.
You've built a product and you're ready to take the next step, but what's your plan? First, you need a strategy in place. Do you know how much money it will cost, or where exactly that funding should come from? What about marketing strategies for getting customers in the door?
You’ll also need to find ways to retain them afterwards so they keep coming back again and again (and spending more).
Obtain external funding
If you want to get funding from lenders or investors, you need a startup business plan. Lenders want to make sure they're investing in a company that will last and grow.
A well-organized idea shows passion for its purpose and outlines clear goals for helping customers. At the same time, having an exit strategy is also important.
Making a plan for when things don’t pan out as desired lets investors understand how much value there can be while giving customers (and yourself) peace of mind.
Understand your target market
One key piece of your business plan is knowing how to conduct a market analysis. To do this, consider the industry, target market, and competitors.
Are there any market trends or competitor factors that can affect your business? Review them closely and get ready to make required changes to your business plan.
Prioritize high ROI strategies
In business, ROI is important. Any business that doesn’t generate as much cash as it burns is likely to fail.
With a startup business plan in place, the strategies with the highest ROI become crystal clear. You'll know exactly what to tackle first and how to prioritize the rest of your tasks.
Accelerate financial health
Business plans are not crystal balls, but they can help forecast your financial health. Planning for expenses is vital to keep operations steady and identify problems as soon as possible.
Cash flow projections can help you see if goals are achievable or highlight upcoming issues that need correction before it's too late.
How to write a small startup business plan
Use this guide for entrepreneurs to develop or tweak a startup business plan. By following this easy six-step process, you'll soon have a clear path to startup success.
1. Clarify the startup vision, mission, and values
The first step to writing a startup business plan is understanding the startup itself.
Once you know what your startup does, ask yourself why. What is the startup's mission? What problem will it help customers solve? The startup's mission statement helps define its reason for existing.
It’s usually expressed in a simple sentence, but can also be written as a short paragraph.
Try to answer these questions: What does your startup do? How will it make money? How quickly do you hope it will grow? Are there any significant milestones or deadlines that need to be met?
2. Outline the executive summary
Now that you have an idea for your startup, its mission, and a vision in mind, it's time to write your startup business plan executive summary.
Keep it simple and precise. Begin by writing a one-sentence startup business plan introduction that showcases the core customer need/pain point and how you propose to solve it.
3. Develop startup goals and milestones
Next, write down the milestones and goals for your startup business plan. This is a crucial step that many entrepreneurs forget when they're starting out.
Do you want to focus on getting new customers? Or attaining a specific revenue number? Without clear short-term goals, it can be hard to know how to prioritize startup tasks.
4. Write a company description
Answer the two fundamental questions — who are you and what will you do? Then, give an introduction to why you're in business.
Provide a summary of introspective goals, clarifying intangible aspects such as values or cultural philosophies. Make sure to mention:
- Proposed business structure (limited partnership, sole proprietorship, incorporated company, or a general partnership)
- Business model
- Business vision and mission statement
- Background information of your team members
5. Conduct market analysis
Choosing the right market is crucial to your organization’s success. There are different kinds of products and services that a business can offer and each has particular requirements for a successful market fit.
If you choose one that doesn't have a large enough customer base or is not profitable enough, your company may end up struggling for every sale.
Ensure that there is a clear market niche — an ideal audience of customers with a need or a pain point that your business can help solve.
6. Develop startup partnerships and resources
When you're launching a small startup, one of the most important things that your business needs is capital. There are several ways to get going on this front.
When thinking about sources of funding for startups , consider startup grants, startup loans, startup investors, and startup accelerators.
7. Write a startup marketing plan and startup budget
Your startup business plan is almost complete! All that's left is to create a startup marketing plan and budget. Your startup marketing plan will help you define your company’s target audience and brand image.
The startup budget is an integral part of any startup that helps you take the guesswork out of writing expenses.
Examples of startup business plans
Business plans differ based on the nature of the business, target market, competitive advantage, delivery of product/service, scope, and size.
Though the core business plan template remains the same, the content and flow change. Here is an example of an accounting firm's business plan:
At our company, ABC Accounting Services LLC, we work hard to provide the best service and build a strong team. Our vision is for this brand to be recognized as #1 throughout NYC by both smaller businesses and larger corporations.
Our values are reflected in all that we do: integrity (ethical behavior), service (giving top priority to clients' needs), excellence ("doing it right"), teamwork (working together).
ABC Accounting Services LLC is the premier accounting firm in New York City and will handle various financial services. We specialize in audits, bookkeeping, tax preparation/compliance work, and budgeting assistance with high-quality consulting.
ABC Accounting Services LLC will be structured as an LLC — a Limited Liability Company in the state of New York. It will provide accounting, bookkeeping, taxation, auditing, and compliance-related services to small, medium, and large enterprises situated in New York City.
Marketing strategy and competitive advantages
Despite the fact that there are many established accounting services firms in our industry, we have a great chance of becoming successful because of the high demand for financial consulting.
Often, small businesses don't need full-time employees but would rather hire an accounting service provider like us to handle their bookkeeping and tax returns on time every year.
It is best to find a unique niche or carve out your own market in the financial consulting services industry. If you're able to create an identifiable brand identity for your accounting business, then you will likely see less competition from other firms.
ABC Accounting Services LLC will focus on delivering an exceptional client experience to grow the business and expand market share.
Startup business plan template
Here's a template you can follow when creating your startup business plan:
Top tips for writing a startup business plan
The following tips will help you create a compelling startup business plan without getting overwhelmed.
Know your audience
To write an effective business plan, tailor your language and level of detail to match the audience reading it.
Have a simple and clear goal
If you have a goal of securing funding for your business, it will be an uphill task with lots of work and research.
Simplifying and breaking down bigger goals into smaller, actionable tasks will assist you in getting through them faster.
Spend time researching
Avoid assuming anything about your target audience, product/service, or the market need.
Spending adequate time and effort on research from primary and secondary sources will help you develop an accurate business plan.
Build a startup toolkit
The process of creation becomes easier if you have the right startup tools and software by your side. Pick the right ones that will help you in your journey.
Keep it precise
Short and easy-to-read business plans are best kept within 20 pages. If you have additional documents, consider adding them as appendices or provide a link if available online.
Ensure tonal consistency
Keep the tone consistent by having just one author write your startup business plan. Otherwise, be sure to edit it thoroughly before you finalize it.
Add reference points
All information regarding the market, your competitors, and your customers should reference authoritative data points.
Be ready to pivot
A business plan should be fluid and flexible. Think of it as an evolving document that will continue to change over time.
How to create a business plan with Wrike
A good business plan is a powerful tool and can be a key predictor of future progress, but simply filling in a startup business plan won’t help you achieve success. You need to create action steps with accountability that will help you reach your goals.
Wrike’s project management software can help your organization deliver successful projects and maximize individual and team productivity, and our product launch template can help you turn your startup business plan goals into actionable steps.
Start a free trial of Wrike today to see how it can help to simplify work, showcase progress to stakeholders, and achieve startup success.
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20 Reasons Why You Need a Business Plan in 2023
Written By Dave Lavinsky
What is the Purpose of a Business Plan?
The purpose of a business plan is to provide a clear roadmap for the company’s future. It outlines the vision, goals, and strategies of the business, guiding entrepreneurs and stakeholders in understanding its operations and objectives. A well-crafted business plan helps attract investors and funding by showcasing the potential for profitability and growth.
Top 20 Reasons Why you Need a Business Plan
1. to prove that you’re serious about your business.
A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.
2. To Establish Business Milestones
The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you’d certainly share the news that you launched your new website or reached $1M in annual revenues.
3. To Better Understand Your Competition
Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages. And if you don’t currently have competitive advantages, to figure out what you must do to gain them.
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4. To Better Understand Your Customer
Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to an effective business plan and to a successful business. Understanding your customers will not only allow you to create better products and services for them, but will allow you to more cost-effectively reach them via advertising and promotions.
5. To Enunciate Previously Unstated Assumptions
The process of actually writing the business plan helps to bring previously “hidden” assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity. For example, you might have assumed that local retailers would carry your product; in your business plan, you could assess the results of the scenario in which this didn’t occur.
6. To Assess the Feasibility of Your Venture
How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture. In some cases, the result of your planning will be to table the venture. And it might be to go forward with a different venture that may have a better chance of success.
7. To Document Your Revenue Model
How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.
8. To Determine Your Financial Needs
Does your business need to raise capital? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.
9. To Attract Investors
A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.
10. To Reduce the Risk of Pursuing the Wrong Opportunity
The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.
11. To Force You to Research and Really Know Your Market
What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace. And it will allow you to use this knowledge to make decisions to improve your company’s success.
12. To Attract Employees and a Management Team
To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals. Importantly, as you grow your company, your employees and not you will do most of the work. So getting them aligned and motivated will be key to your success.
13. To Plot Your Course and Focus Your Efforts
The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones. You wouldn’t go on a long driving trip without a map; think of your business plan as your map.
14. To attract partners
Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.
15. To Position Your Brand
Creating the business plan helps to define your company’s role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners. With the industry, customer and competitive insight you gain during the business planning process, you can best determine how to position your brand.
16. To Judge the Success of Your Business
A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).
17. To Reposition Your Business to Deal with Changing Conditions
For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.
18. To Document Your Marketing Plan
How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business. And the marketing strategies and tactics you use will evolve each year, so revisiting your marketing plan at least annually is critical.
19. To Understand and Forecast Your Company’s Staffing Needs
After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion. Importantly your plan can not only help you understand your staffing needs, but ensure your timing is right as it takes time to recruit and train great employees.
20. To Uncover New Opportunities
Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing on them which is often the difference between a business that fails or just survives and one that thrives.
Business Plan FAQs
What is a business plan.
A business plan is a document that details your business concept and strategy for growth.
A business plan helps guide your company's efforts and, if applicable, gives investors and lenders the information they need to decide whether or not to fund your company. A business plan template helps you to most easily complete your plan.
Why Do You Need a Business Plan?
A business plan provides details about your company, competition, customers and industry so that you make the best possible decisions to grow your company.
What is the Importance of a Business Plan?
The 3 most important purposes of a business plan are 1) to create an effective strategy for growth, 2) to determine your future financial needs, and 3) to attract investors (including angel investors and VC funding ) and lenders.
Why is a Business Plan Important to an Entrepreneur?
Business plans help entrepreneurs take their visions and turn them into tangible action plans for success.
Since 1999, Growthink’s business plan experts have assisted more than 4,000 clients in launching and growing their businesses, and raising more than $2.5 billion in growth financing.
Need help with your business plan?
Speak with a professional business plan consultant from our team.
Use our simple business plan template .
Check out our business plan examples .
Or, if you’re creating your own PPM, you can save time and money with Growthink’s private placement memorandum template .
Learn more about us via our Growthink Business Plan Review page
The World’s #1 Business Plan Template
Would you like to know the quickest and easiest way to create a winning business plan?
And how to use it to raise funding, improve your strategy, or both?
Well, we’ve developed the ultimate business plan template to help you do this. Simply click below to learn more.
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Why do you need a business plan?
14 Reasons Why You Need a Business Plan
10 min. read
Updated June 12, 2023
There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.
A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.
A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.
Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?
Good questions. Here’s every reason why you need a business plan.
On this page
1. Business planning is proven to help you grow 30 percent faster
2. planning is a necessary part of the fundraising process, 3. having a business plan minimizes your risk, 4. crafts a roadmap to achieve important milestones, 5. a plan helps you figure out if your idea can become a business, 6. you’ll make big spending decisions with confidence, 7. you’re more likely to catch critical cash flow challenges early, 8. position your brand against the competition, 9. determines financial needs and revenue models, 10. helps you think through your marketing strategy, 11. clarifies your vision and ensures everyone is on the same page, 12. future-proof your business, 13. tracks your progress and measures success, 14. your business plan is an asset if you ever want to sell, writing your business plan.
Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The process of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed.
You don’t have to just take our word for it. Studies have proven that companies that plan and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience cash flow crises that threaten to close them down.
One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.
Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture.
A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality.
Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money.
When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations.
As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans.
Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.
A business plan is like a roadmap for your business. It helps you set, track and reach business milestones.
For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.
In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.
And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.
To turn your idea into reality, you need to accurately assess the feasibility of your business idea.
You need to verify:
- If there is a market for your product or service
- Who your target audience is
- How you will gain an edge over the current competition
- If your business can run profitably
A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.
Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.
As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase.
These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.
The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your cash flow statement is one of the three key financial statements you’ll put together for your business plan. (The other two are your balance sheet and your income statement (P&L).
Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills.
Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:
- What is your competition doing well? What are they doing poorly?
- What can you do to set yourself apart?
- What can you learn from them?
- How can you make your business stand out?
- What key business areas can you outcompete?
- How can you identify your target market?
Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete.
A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind.
Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business.
Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.
A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers.
Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc.
Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.
In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there.
Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.
A business plan helps you to evaluate your current situation and make realistic projections for the future.
This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.
Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.
By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.
You’ll also be in a better position to seize opportunities as they arise.
An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.
By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.
Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.
Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale.
Free business plan template
Join over 1-million businesses and make planning easy with our simple, modern, investor-approved business plan template.
By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one.
Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.
Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.
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Why and how to write a business plan for your startup
05 Jul 2020
You’ve got an idea, and it’s a great one, too! So, what’s next? Contact a commercial property broker? Post “We’re hiring!” on your Facebook page? Maybe purchase some materials? Well, not exactly.
As excited as you might be right now (and you should be excited!), it’s important to ‘aim’ before you ‘fire’ . In other words, before you launch your new business, you need a business plan.
A business plan can be helpful on a number of levels. First, it’s a great tool for communicating your vision to employees, partners and customers.
Second, if you’re looking for investors, they’re going to want to know that you’re serious; that you’ve studied your market, thought carefully about the value of your product or service, found the best suppliers, and done the math. In other words, they’re going to want to see your business plan.
Third (and here comes the boom), planning pays. That’s right. Harvard Business review reported that entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don’t. You do want a viable business, right?
There’s something else, though, and perhaps Dwight Eisenhower said it best when he said “Plans are nothing. Planning is everything”. What he meant is that the process of planning is often more valuable than the plan itself. So, even if you aren’t looking for investors, creating your business plan is bound to take you on a journey of discovery that will help you launch your business with strength, profitability and longevity.
We’re not saying that your business plan should be set in stone. As a startup, you’ll need to be flexible, responsive, and learn by doing. So, tweaking your plan over time isn’t just okay, it’s expected. Still, a plan provides a firm foundation for your business to grow.
Okay, I’m sold. Now how do I do it?
Business plans come in more shapes and sizes than plants, dogs and, well, anything else that comes in many shapes and sizes! The good news is that you can start simply, and focus on the questions that are most relevant to your personal startup journey.
Here we go!
What drives you?
If you’ve taken the bold step toward entrepreneurship, it’s probably because you’ve found something you’re passionate about. After all, you’re not starting a business simply to start a business. Rather, you’re driven to solve a problem, create beauty or make a difference in the world.
Simon Sinek nailed it when he spoke about finding your ‘why’ . Your ‘why’ is the fuel that moves you forward everyday, even when you’ve been rejected, pushed aside or made a huge mistake.
Without this fuel, and this purpose, your success as an entrepreneur is all but doomed. You’ll grow tired, and lose motivation, because being a startup boss is hard (like really hard) work. On the other hand, if you know your purpose, and believe in it, you’ll be resilient, inspired and determined. Success is an eventual reality!
Who is your audience, and what problem are you solving for them?
Do you know your target audience – as in really know them? Because until you do, you won’t know how to reach them with the right message, about the right product/service, and in the right way.
After all, the world is a great big space, and you can’t make everyone happy. So, the more targeted you are about who you’re talking to, and how, the more likely you are to build a strong customer base.
Think about their story, their challenges, their motivators. How do you add value, or offer a solution, that they actually want? How old are they, where do they live, what do they love? Do they prefer stores with walls, or do they like to shop online? Do they use social media, and if so, which platforms are their favourite? Do they use industry-specific lingo, do they prefer formal or casual communication?
The more you know about your audience, the more strategic you can be about your sales and marketing strategy, product strategy and hiring strategy. In other words, set your target, and then focus on it!
How will you price your product/service, and will people pay?
In truth, startup pricing strategies deserve their own article. There’s just so much to consider.
For example, are you looking for high volumes or big margins? Maybe it’s both? Do you want your brand to represent a premium purchase, or value for money? Will you offer different purchasing tiers? Will there be a free trial? Is your service off-the-shelf or tailored?
Price your product/service too high, and you’ll lose sales. Price it too low, and you’ll also lose sales. For example, customers often perceive a product as being of low quality when it’s ‘cheap’. So, even if you know they’d be getting a great deal, customers won’t make the purchase. Hike your price up a little, and viola!
This is probably enough to get your head spinning! So, if you need more clarity on pricing your product or service, here’s an article that does just that.
Who is your competition?
Hmm, the competition. It’s not always what you think! For example, Coca Cola competes with other cold drinks, right? How about real fruit juices? Sparkling waters? What about ice creams?
Let’s test this scenario. You pop into an Engen Quick Stop on a hot summer day. You grab a Coke from the fridge and head to the till. There’s a guy in the queue ahead of you, and while you wait for him to finish, you spot a Jive ice cream. It’s fruity, it’s fresh and it doesn’t come colder than frozen! So, you put the Coke back and say “Just this, please” as you hand a Jive to the teller.
The point is, your competition doesn’t just include brands that sell the same thing as you do. It includes any business that solves the same problem, for the same people, as you do.
Which key milestones are you working towards?
Planning targets, KPIs and strategic priorities for the next year, or even quarter, can be tough when you’re just starting out. You’re still finding your feet, and making mistakes. Agility is the only ‘strategy’ you need right now, right? Sort of. You still need an idea of where you’re going (or you’ll end up someplace else!).
So, while you might not have the precise numbers crunched, you should still have an idea of what you would like to achieve in the short and medium term. Like, maybe you want to launch your app in the next 12 months, grow your social media following by 300%, or get your product into 5 local stores?
And here’s a tip. Be ambitious! Often, when we aim high, we achieve so much more than we thought we could.
Tools for getting the answers you need
If you answered all of the questions above with confidence, then you’re ready to start organising that information into a business plan. If you need a template, there are loads available (for free!) online. Just like this one .
If you hesitated, ummed and ahhed for one or more of the questions above, then you still have some work to do. You need to find answers that you can count on. Luckily, there are many ways to do this!
To start with, there are loads of free survey tools, like Survey Monkey , to help you collect data about your target market and competition. There’s also good old Google for a simple web search. Don’t underestimate the amount of information already available online.
And lastly (and this is our favourite) there are mentors and industry experts with a wealth of knowledge to share. Sometimes you just need to ask! Or, you could join Investec Startup School’s flagship Entrepreneurship course , where we offer practical online education, business coaching, one-on-one sessions with a business mentor, and the opportunity to win R100,000 in business funding. Did we mention that we offer full bursaries, too?
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The Importance Of A Startup Business Plan
When starting your business venture a business plan is a vital tool to have on hand. It helps in maintaining focus throughout their journey and keeps the company’s short-term and long-term goals in hindsight.
Some choose to believe that the act of writing down a business plan has been dead for years, but many business experts agree that having a strategic plan for your business is the safest way to start. Even well-thought-out ideas can turn out utterly useless without including proper execution and implementation steps.
What Is a Business Plan and What Does It Consist Of?
A business plan is a road map that describes your business goals and details how you will accomplish those goals for it to succeed.
Business planning is essential for startups as it allows individuals to break down its elements into meaningful pieces that are easier for you to understand and comprehend. This would most likely include expense budget, milestones, tasks and responsibilities, and expected outcomes.
A smart entrepreneur will pay close attention to how much money the business is bringing in and its expenditure. This comes in handy when you’re planning to recruit new employees or purchase new equipment. Outlining such needs in a solid financial plan helps you assess how much capital your business needs in order to grow and function efficiently.
Business Plan Types
There are three common types of business plans which are used as per the business objectives of a startup:
The Lean Business Plan
A lean plan deals with the formalities required when displaying a plan for a loan or investment. It focuses on your main business strategy , objectives, tools and equipment, budget estimation, and forecasts. They’re used as tools to promote strategic planning and growth within the business.
The lean business plans include more financial data but skip units like company history and the team of management since the focus is mostly on projected sales, expenditure, and cash flow.
One-page business plan
A simple one-page format is outlining your business objective and goals within a single page. Everything you find important is listed in concise points that are easy to interpret and understand by anyone.
This kind of business plan is great for startups that just wish to summarize their concept in the best possible way. Sticking to a single page allows you to re-visit the general model whenever you need it without having to rummage through different pages every time. Similarly, it’s a lot easier to tweak and refine as you come up with new ideas and schemes.
In the same way, it can also be used to introduce the business to potential stakeholders who have limited time to read through a comprehensive business document. This is preferable during first meetings as it provides them with a general idea of your business model . A detailed plan can be prepared later in the future but a one-page plan is a better approach to get your business concept through.
Formal or External Business Plan
Formal business plan documents are normally intended for outsiders to provide comprehensive information about a business and its aim. They’re mostly used to convince investors to fund an enterprise or to support a loan application. This type of plan should be designed to look professional, and pay extra attention to detail in language and formatting.
The formal business plan will explain where and how the funding would be used and what return is expected from their investment. Finally, a detailed list of your skilled team should be included to showcase that you’ve got a strong team to help your business grow.
Why Is Startup Business Plan Important?
A survey conducted by Palo Alto resulted that people who create business plans are twice as likely to succeed than people who don’t. To solidify the reason why business plans are still relevant, we’ve explained the importance of writing a business plan for startups below:
Plotting a Course
Business plans allow individuals the opportunity to think long-term. It outlines the directions to follow, the goals and aims of your business, the expected outcome and other futuristic objectives to help your business grow. Its purpose is to keep entrepreneurs focused through every phase in their business venture and not disrupt the flow.
It also helps in briefing recruits, management teams, and employees as you can share your business objectives and motivate them to work towards those goals.
It’s no secret that businesses can’t function without any operating capital to kick-start their production cycle. Entrepreneurs are often required to take loans from financial institutions to purchase property, get the equipment or hire manpower. But for this to work out the way you want, you need to present an up-to-date business plan to potential financiers. An accurately plotted business plan will highlight all the capital requirements and serve as written proof for the deed. The better the business plan, the higher the chances of securing reliable suppliers.
Identifying Possible Weaknesses
If this is your first startup rodeo then there is a high probability of you encountering several pitfalls in your business venture, which is completely normal. Highs and lows are a part of life and without them; we wouldn’t feel the need for improvement.
A business plan allows you to cut down the chance of consequences so you can focus on other aspects of business operation. It eliminates the spot for unnecessary errors that are time-wasting and highlights areas that can be improved with modern tools and technology. Also, it allows you to recognize which regions are better handled by automated technology and which can be appointed to manpower.
Describing how your business will function and perform in the market is important when dealing with sponsors and investors. A business plan will explain your products and services, your targeted customers, the required funds and what’s necessary for your startup to thrive. It guides you through the initial stages and rotates motivation and focus within the business.
If you’re unable to remember important details, having a business plan on hand will assist you in employing staff and distributing the workload to operate smoothly. For instance, if your business specializes in web design and development services your target audience is individuals looking to launch or revamp websites for their blog or company. When you fail to present any aspect of your business, it can lead to confusion and cost you a financer before you’ve even started running.
The Best Possible Chance to Succeed
Taking time out to thoroughly analyze the elements included in writing the best business plan for your startup is guaranteed to bring you success. It allows you to work through important business details like financing and market planning , so you’re not going in blind.
You will be entering the field knowing your target audience and implementing the best strategies to pique their interest. Having a business plan helps you to present your ideas and concepts to investors, sponsors and potential clients to convince them about your commitment to the enterprise and its success.
Using your business plan as a constant management tool is the best way to obtain benefit from it. For this, your plan must be regularly revised and polished to include updates on current conditions and any new data that you’ve gathered while running your business. You’re constantly learning new things while managing a business like a customer’s response to your services, their likes and dislikes, effective marketing techniques, and affairs that require immediate attention. This keeps you on your toes and keeps you determined to succeed.
It is important to understand that a business plan intended for internal management and strategic planning within the business walls differs in length, detail, and presentation. On the other end of the spectrum, a business plan document meant for outsiders like venture capitalists, will focus on high growth aspects of the business and have a much more sophisticated arrangement.
Ultimately, constructing a startup business plan involves a lot of thought and research. You must focus on its core principles and identify what’s best for effective management and functioning. Providing adequate information about your startup is what attracts angel investors and venture capitalists, you just need to apply the right tone and format in your business plan. While it doesn’t guarantee success, it can help in reducing the likeliness of failures you may encounter in the future and raise capital.
Go On, Tell Us What You Think!
Did we miss something? Come on! Tell us what you think about our article on startup business plan in the comments section.
A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.
6 reasons why you need a business plan before starting a business
Table of Contents
1) Know the market
2) plan your growth, 3) minimise risk, 4) help guide future decisions, 5) improve as you learn more, 6) secure financing, making informed business decisions.
Sometimes success comes with luck. Otherwise, it comes with hard work and planning. If you’d like to maximise your success as you launch a business, this article is for you.
Learn six reasons you need a business plan before starting a business in this article by Countingup. If you’re new to business, a typical business plan includes research on market trends, competition analyses, customer profiles, marketing goals, logistics and operations plans, cash flow information, and an overall strategy on how they will grow.
Find out how a plan helps your business to:
- Know the market
- Plan your growth
- Minimise risk
- Help guide future decisions
- Improve as you learn more
- Secure financing
This article will cover why you should plan and how you can use these elements to build your business more effectively. If you’re ready to write a business plan instead, check out our dedicated article How to write a business plan . There we cover what sort of information is expected and useful in business plans and how to research them.
At Countingup, we want to empower new entrepreneurs to take on new challenges and be financially independent. Read on to find out more.
If you’re to be successful in business, you need to know your market and the value customers are seeking within it. However, this can potentially be a lot of information to gather and manage. Therefore, you need a business plan to centralise and summarise all the important reasons why your business is valuable.
To do this, you need to consider two main perspectives: what your customers want and what your competitors are already offering. This second question is essential as it will allow you to identify how you can be different. If you already have something of a business idea or would like to turn a side-hustle into a full-time job, you should do research to understand if your idea will be a viable business and how. This market research in your business plan should look something like the following:
From your research, you can build a detailed picture of where your business should be positioned as you launch from the market gaps you’ve identified.
As you anticipate what your business might look like in five years, you may have some ideas for milestones to hit. For example: first customer, thousandth customer, break-even financially, first £1,000 in profit, and so on. However, do you know how you’re going to reach each of them?
From the market research you’ve just completed, your business plan allows you to take various steps to use this information. Therefore, you need a business plan to maximise your growth and create specific objectives and strategies to meet this growth.
For example, if you run a craft beer business, you might aim to sell 1,000 units within your first year. Your sales objective could be achieved with a strategy to ‘Attend trade fairs and beer festivals to meet potential retailers and interested customers’. Depending on the direction you choose in providing to retailers or selling directly to customers, you can reach this objective (first 1,000 units) in very different ways.
In contrast, if you run a consultancy business in financial services or marketing, you could aim to grow your client base to 12 full-time contracts across the year. Therefore, you might plan to ‘Use social media and industry contacts to advertise to clients’ or ‘Develop your service to retain clients for longer periods and larger projects’. These goals’ methods are critically different from one another – therefore strategies for your goals will need to be relevant and focused.
Once you’ve taken steps to meet these objectives, you can use your business plan to track your progress and identify where you still need to develop your business. With these formalised goals and methods, you can grow your business faster than entrepreneurs who don’t plan.
Another direction in which to focus market research within your business plan is towards identifying vulnerabilities. Each business has fragile areas where they are threatened. Therefore, you need a business plan to protect weak points and avoid excessive risk sources.
From the SWOT analysis (strengths, weaknesses, opportunities and threats) included in your business plan, you can highlight areas that may need more proactive management and back-up plans in case something goes wrong. For example, this can be recognising whether your business idea is patentable, if external factors are driving up costs for consumers or if customer interest is a fading trend. Each of these threats and weaknesses presents vastly different problems to your business. Therefore, each will also need suitable methods to address them.
As you’re looking to start, having this awareness can mean you can anticipate problems ahead of time. Depending on the severity of these issues, you can take steps to cushion any damage or preserve your profits entirely. Without this insight, you leave yourself open to threats you were able to anticipate and mitigate but didn’t manage to – a critical oversight for any business owner.
On balance, having this awareness of weaknesses and threats can be more important than your opportunities, as you’ll be aware of steps to avoid and what to look out for. Therefore, outline threats to your business’ future to protect it.
Unfortunately, even the best plans have blindspots and circumstances where they’re of limited use. Therefore, you need a business plan to navigate uncertain futures.
Your market research is a snapshot of the market at one point in time. Therefore, the information, objectives and strategies you create are only useful for a certain period after this. If something changes in the market or some element of your business no longer works, you can still fall back on other parts of your business plan without having to start from scratch.
For example, as you build your business, you can revisit future objectives and decide whether your currently available options can still meet them. If they do, and you’re able to stay on target for your goals, you can grow your business in the direction you initially planned. However, where your plan hasn’t worked out, you’ll need to decide to the best of your ability.
Navigating these future scenarios with updated information is especially important as you balance the short and long-term priorities of growing your business. For example, do you want to take more money to compensate yourself or reinvest a higher proportion of your profits in the hopes of growth later on?
Even if you’ve planned to reinvest every penny for the first 5 years, maybe something in your personal life has meant you need to support yourself.
Some critical information to look out for as your business plan evolves includes:
- Demand lower than predicted
- Cash flow issues due to poor forecasting
- Not enough differentiation from competitors
- Prices too high or too low for the industry to be sustainable
As the months and years pass by while you trade and grow your business, you can update your plan with more insight. Therefore, you need a business plan to improve your business.
As an example, in some instances, a manufacturing process is harder than anticipated or a planned funding source isn’t available. Here, you can adapt your growth strategies based on this new information and update your plan to be more pragmatic and accurate. Similarly, if you find that certain marketing strategies don’t work, you can rule out certain business strategies in the future to expand your business with more confidence.
There would be little point in planning a course of action for your business, facing difficulties and then not updating your plan with a new direction. This would risk your business being disorganised and ineffective in its growth.
Even if your initial plans and growth strategies go the way you planned, at a certain point, your plan will expire anyway. This is because you can only plan so much on a single market snapshot. Therefore, you can use the experience you gain with time from growing your business to fine-tune your plans. This will make sure your business is always performing at its best within an evolving marketplace.
Finally, investors and lenders want to see entrepreneurs with a good understanding of what they offer to customers and a clear vision of how to grow their business. Therefore, you need a business plan to help convince other people that your business has value and potential.
When seeking funding, having a business plan to share with potential investors and lenders is sometimes a requirement as they’ll want to evaluate your claims more critically. While they may not be familiar with every business plan they come across, they may know more about typical business growth patterns and will be able to spot poor research or naive expectations.
Therefore, having a detailed and realistic business outline can help your plan withstand their criticism and robustly show your growth potential. Similarly, if you’re considering an exit strategy to sell your business in the future, a business plan may be needed to secure a higher valuation.
If you’d like to know more about communicating your business’s value and plan to secure funding, read our dedicated article How to present a business plan to potential investors .
Make your business plan more effective with Countingup.
Countingup is your business current account and accounting software in one app. With it, you can automate your financial admin and save time – so you can get back to doing what you love.
The Countingup app offers real-time profit and loss data so you detect changes in your business’ performance as they happen. So you’ll be able to see success instantly if you change your marketing strategy.
Get paid faster and improve your cash flow with automated invoicing. Gain complete confidence in your books as they’re always accurate and up to date – even if you’re on the go – with automatic expense categorisation and prompts for receipt capture as you make transactions. Countingup’s tax estimate tool will help you confidently set aside the right amount each year to pay any tax owed. Find out more here and sign up for free today.
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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
Investopedia / Ryan Oakley
A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.
A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.
Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.
Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.
- A business plan is a document describing a company's core business activities and how it plans to achieve its goals.
- Startup companies use business plans to get off the ground and attract outside investors.
- A business plan can also be used as an internal guide to keep an executive team focused on and working toward short- and long-term objectives.
- Businesses may create a lengthier traditional business plan or a shorter lean startup business plan.
- Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget.
Want Funding? You Need a Business Plan
A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.
Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.
A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.
While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.
A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.
Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.
When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.
Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.
The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.
As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.
- Executive summary: This section outlines the company and includes the mission statement along with any information about the company's leadership, employees, operations, and location.
- Products and services: Here, the company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
- Market analysis: A firm needs a good handle on its industry as well as its target market. This section of the plan will detail a company's competition and how the company fits in the industry, along with its relative strengths and weaknesses. It will also describe the expected consumer demand for a company's products or services and how easy or difficult it may be to grab market share from incumbents.
- Marketing strategy: This section describes how the company will attract and keep its customer base and how it intends to reach the consumer. A clear distribution channel must be outlined. The section also spells out advertising and marketing campaign plans and the types of media those campaigns will use.
- Financial planning: This section should include a company's financial planning and projections. Financial statements, balance sheets, and other financial information may be included for established businesses. New businesses will include targets and estimates for the first few years plus a description of potential investors.
- Budget: Every company needs to have a budget in place. This section should include costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.
Unique Business Plans Help
The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.
Types of Business Plans
Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.
Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.
Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.
A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.
Other Considerations for a Business Plan
A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.
If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.
Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.
Think of the business plan as a living document that evolves with your business.
A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.
Why Do Business Plans Fail?
Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with a focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out-of-control budgets. Markets and the economy can also change. Without flexibility built into your business plan, you may be unable to pivot to a new course as needed.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.
Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.
Small Business Administration. " Write Your Business Plan ."
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How to Write a Business Plan, Step by Step
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1. Write an executive summary
2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. add additional information to an appendix, business plan tips and resources.
A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.
Here’s a step-by-step guide to writing your business plan.
» Need help writing? Learn about the best business plan software .
This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.
Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.
» MORE: How to write an executive summary in 6 steps
Next up is your company description, which should contain information like:
Your business’s registered name.
Address of your business location .
Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.
Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.
Lastly, it should cover the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.
» MORE: How to write a company overview for a business plan
The third part of a business plan is an objective statement. This section spells out exactly what you’d like to accomplish, both in the near term and over the long term.
If you’re looking for a business loan or outside investment, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.
For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and how much you think sales will increase over the next three years as a result.
In this section, go into detail about the products or services you offer or plan to offer.
You should include the following:
An explanation of how your product or service works.
The pricing model for your product or service.
The typical customers you serve.
Your supply chain and order fulfillment strategy.
Your sales strategy.
Your distribution strategy.
You can also discuss current or pending trademarks and patents associated with your product or service.
Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.
Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.
» MORE: R e a d our complete guide to small business marketing
If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.
You may also include metrics such as:
Net profit margin: the percentage of revenue you keep as net income.
Current ratio: the measurement of your liquidity and ability to repay debts.
Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.
This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.
» NerdWallet’s picks for setting up your business finances:
The best business checking accounts .
The best business credit cards .
The best accounting software .
This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.
Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.
List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
Here are some tips to help your business plan stand out:
Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.
Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.
Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. You can search for a mentor or find a local SCORE chapter for more guidance.
The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.
On a similar note...
How to Write a Startup Business Plan
The startup environment is fast, and often, entrepreneurs struggle with finding a balance between planning and high pace. Learn how to plan your future business effectively without losing precious time to market.
Most startups fail . The major reason for that is poor market fit and lack of planning. This harsh reality doesn’t have to stop you from trying, though. Entrepreneurs continue to develop and test ideas, and investors pay close attention to business plans and hard data rather than merely a vision.
Business plans are valuable for companies of all sizes, whether you’re planning to launch a small business or a future corporation.
A business plan helps startups to focus on their future growth based on data-based projections and estimates
In this article, you’ll learn how to write a realistic business plan for a startup that will help you to check your product’s feasibility, keep the focus on your business goals and generate more investments for developing your idea.
What is a startup business plan?
A startup business plan is a document that describes your product or service from the business and financial perspective. Basically, this plan answers the question, “How will your business make money?”.
To do this, a startup business plan must also answer other supporting questions like:
- What’s my product or service about?
- How much initial capital do I have to start this business?
- What profits do I need to make to keep my business operating?
- What marketing strategy will allow me to achieve my business goals?
So, a startup business plan is a structured layout of your future business processes, strategy, business structure, and marketing. Creating it isn’t easy, so why do you need it in the first place?
Why do you need a startup business plan?
Founding a business without a plan is like building a house without a blueprint. If you’re lucky and a genius, the house may turn out great.
Although, the probability of it happening is very low: you don’t know what kind of soil you’re building it on, how many floors it’ll have, how much it will cost, and how many people will buy apartments from you.
So, what other reasons are there apart from predictability? Let’s discuss this.
Higher success rate
The importance of planning for business is proven by studies and data: a plan increases your chances for success by 30%! Why is that?
A plan gives you a better understanding of your internal processes and allows you to test your ideas. Although a business plan is theoretical, it still uses real concepts and puts your future business in context.
A plan can be a great starting point for your MVP or a lean startup launch.
Writing a startup business plan is associated with higher funding. Surely, in the past, companies like Microsoft and Apple started without any plan. For example, Apple had no plan until they needed $250K in financing to build the Apple II inventory.
In the golden age of Silicon Valley, investors were ready to give money to entrepreneurs with disruptive, bold, and innovative ideas.
Now, everything’s changed. Investors like to see actual plans that bring tangible results rather than blindly trusting entrepreneurs’ visions. So, if you draw up a detailed plan backed by research, you’ll have more chances to get funded and build a successful product.
Deep understanding of your target market
While writing a business plan for a startup, you’ll think about what factors and market trends can affect your business. These factors include new technologies, current competitors, and potential marketing strategies that work for your business.
All of this will help you get a deeper understanding of your business, target audience, and your place in the chosen market.
Focus on effective strategies
A plan that contains all your operations and strategies will help you focus on activities that matter most to your success and generate the most revenue.
Easier financial planning
Many startups fail after quickly running out of cash because they don’t track it and underestimated their expenses before launch.
A business plan allows you to focus on what really matters for your ROI and make sure your startup not only stays afloat but also grows at a steady, predictable pace.
How to write a startup business plan?
A typical startup business plan structure looks like this:
- An executive summary
- A description of a company
- Market research report
- Detailed product/service description
- Management and operational structure
- Marketing and sales strategy
- Financial strategy
Let’s discuss the key steps to writing a business plan for a startup company.
Step 1. Write an executive summary
This is an introduction to your plan, and it should contain brief information about your business, its goals, and purpose, and what services or products it will provide.
The most important characteristic of a good executive summary is clear objectives. You can also describe your vision for your company’s future, as well as your mission and values.
A summary is similar to a pitch: this is the first thing potential investors will read, so you want to keep it short and sweet. I suggest laying it out first but polishing it after the whole business plan is ready.
Step 2. Describe your company
In this section, you need to provide formal information about your company that includes:
- Your company’s registered name
- The legal address of your company
- Names of key people that run the company and their roles, skills, and expertise
- Your business model
Give information about the structure of your company, including the ownership structure and company hierarchy.
In this section, you can also mention the history of your company, if it has changed over time.
Step 3. Define your business goals
Now it’s time to describe what you plan to accomplish in the near and far future, so make sure you include both short and long-term plans and goals. The goals can differ from expected revenue to the number of employees, users, or offices in different locations.
This section should justify your request if you’re creating a startup business plan to raise money. Show your investors what you need funding for and how you plan to reach your goals.
For example, if you’re expanding your team to another location, you can explain how funding will help you fund a new office and expand the team and how you think this will grow your business and sales next year.
Step 4. Do your target market research
You want to see your company in a market context. For this, you need to perform market research that includes competitor analysis. Look at what similar products already exist in your market, how they generate sales, and what services they provide.
This will give you an insight into your target market and let you figure out your place in it.
Investors want to know that there is a market for your product and that it will be a great fit. They also need to see that you’re able to stand the competition and that you can offer the audience something better and different from what already exists.
Along with market and competitor research, you also need to study your target audience. If you already running your company and have clients, describe them and divide them into categories if possible.
If you don’t have any clients yet, study your competitors and their current customers and develop hypotheses about your ideal customer. Include these parameters into your description:
Start with broad parameters like:
- income level
Narrow down each parameter until you get a detailed description of your typical user. You can create user personas based on this research — this will help you later in marketing.
Step 5. Describe your product or service
In this section, you need to give a detailed description of what you offer. Include this information about your future or current product or service:
- How your product or service works
- Your pricing or monetization model
- What your typical customer looks like
- Your supply chain and delivering a product or service
- Your sales strategy
- Your distribution strategy
Step 6. Outline your company structure
You already mentioned it in your company description section, but now it’s time to give a more detailed description of your company structure. The company structure is all its departments and people responsible for separate business, sales, and marketing processes.
Show what your company looks like now, the roles and responsibilities of your stakeholders, and how many people are on each team.
Then, describe how you plan to scale your company as it grows so that you don’t need fundamental restructuring when it happens.
In this section, you need to clearly state who is responsible for what and who has the final say in key company decisions, especially if you have investors.
Step 7. Plan your marketing and sales
It’s common practice to start marketing before the product is even in development, so you need to get your strategy in place. Show your investors that you’ll make sure your target audience finds your product.
Use your competitor analysis and market research to develop a marketing plan: show what resources you’ll use to get your product in front of the right people. Your marketing plan should cover these topics:
- Business objectives
- Marketing priorities
- Marketing goals and their connection with business objectives
- Marketing strategy
- Key marketing activities
- Risks and dependencies
Be sure to create a strategy for both finding and retaining customers.
Step 8. Estimate your budget
Now, you need to figure out how much money you’ll need to launch and operate your business. This includes the cost of:
- Software development
- Human resources
- Buying or renting property
Make your estimate as accurate as possible, and if you’re in doubt, always estimate higher — it’s always better to get some extra money as a safety net in case something happens.
Also, estimate a separate budget for your marketing and advertising activities. Many startups make a mistake by only calculating their operating costs, but marketing is a crucial part of business planning. Without it, the whole startup will quickly run out of cash.
Step 9. Write a financial plan
This step is different from budgeting. Here, you need to plan your financial growth rather than just figure out how to stay operational.
If you don’t yet have a business running and you can’t use your historical data, just make projections. Make assumptions about your future growth, and come up with three scenarios: pessimistic, realistic, and optimistic.
A financial plan should cover 3 to 5 next years with major milestones in consideration, and include both pessimistic and optimistic scenarios
Your financial projections should cover 3 to 5 next years with major milestones in consideration. For example, if you’re planning to open a new office in 2 years, this should be reflected in your financial projections.
Remember that your company may break even for the first few years or be unprofitable. This is okay, as most of your budget may go to marketing and further growth. Just make sure you’re realistic with your projections and expenses.
Step 10. Write an appendix
Here, you can add everything that didn’t fit in the previous parts of your document, for example, key people’s resumes, property leases, licenses, permits, legal documents, receipts, credit history, contracts, and bank statements.
This is it! Your business plan is ready. Now let me give you some tips on making a business plan for a startup that guides you through your business launch and gets you the funding you need.
Tips for writing an effective business plan
Consider all possibilities.
When developing a business plan, you need to be realistic. Don’t make your plan overly optimistic in order to impress investors. It’s best to consider potential scenarios, risks, constraints, and dependencies. This will prepare you for any circumstances and increase your chances of success.
Proofread your business plan
Grammatical errors, wrong punctuation, and formatting can make a bad impression on investors. That’s why, if your business plan’s main purpose is to raise money, make sure your document looks neat.
Make your plan flexible
A startup environment is very volatile, so you need to keep your business plan flexible. Be ready to pivot, make changes to your services or adjust your financial plan to real-world circumstances in order to succeed.
Keep it concise
A successful startup business plan includes many details and information about your business, but it still needs to be short and to the point. Keep only the necessary information in your business plan, so it’s clear for your reader, whether it’s you or your investors.
Startup business plan templates
You can create your business plan yourself from scratch or use special software. Here are some resources that can help you quickly create your business plan documentation:
This is a simple and minimalist business plan software that allows you to create a structured business plan, share it with your co-founders and investors, generate financial reports, and detect issues. It has a 7-day free trial, and the paid plan starts at $19.95 a month.
This is a perfect business planner for startups that offers inspiration from sample business plans and step-by-step instructions. It has templates for creating one-page pitches, financial reports, and business plans. The cost of LivePlan starts at $15 per month.
This service offers you a guided business plan creator, self-guided courses, and masterclasses from experts to help you build an effective business plan. BizPlan is specifically designed for entrepreneurs who seek funding.
Other similar online services for creating business plans for startups are:
- Business Sorter
Getting a plan for your business is a great way to increase your chances for success, get focused on what matters most, and generate funds for your future or existing company.
It may seem daunting at first, especially when you don’t know how your product or service should look to find its place in the market. This is what we can help with.
Our clients often come to us with just a vision, and we turn it into a fully-fledged working product with defined requirements. To do this, we interview our clients, dive into their business ideas, and perform market research, target audience, and competitor analysis.
All this is included in our discovery phase. So, if you’d like to build a software product for your business, don’t hesitate to contact us. We can help you create your business plan and research and create a prototype to show to your investors or test in real-world conditions.
Frequently Asked Questions
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Free Startup Business Plan Templates and Examples
By Joe Weller | May 6, 2020
In this article, we’ve rounded up a variety of the top, professionally designed startup business plan templates, all of which are free to download in PDF, Word, and Excel formats.
Included on this page, you’ll find a one-page startup business plan template , a business plan outline template for startups , a startup business planning template with a timeline , and a sample startup business plan .
Startup Business Plan Template
Download Startup Business Plan Template - Word
Word | Smartsheet
This startup business plan template contains the essential components you need to convey your business idea and strategy to investors and stakeholders, but you can customize this template to fit your needs. The template provides room to include an executive summary, a financial overview, a marketing strategy, details on product or service offerings, and more.
One-Page Startup Business Plan Template
Download One-Page Startup Business Plan Template
Excel | Word | PDF
This one-page business plan is ideal for startup companies that want to document and organize key business concepts. The template offers an easy-to-scan layout that’s ideal for investors and stakeholders. Use this plan to create a high-level view of your business idea and as a reference as you flesh out a more detailed roadmap for your business.
For additional resources, visit " Free One-Page Business Plan Templates with a Quick How-To Guide ."
Simple Fill-In-the-Blank Business Plan Template for Startups
Download Simple Fill-in-the-Blank Business Plan Template for Startups
This comprehensive fill-in-the-blank business plan template is designed to guide entrepreneurs through the process of building a startup business plan. This template comes with a customizable cover page and table of contents, and each section includes sample content that you can modify to fit the needs of your business. For more fill-in business templates, read our "Free Fill-In-the-Blank Business Plan Templates" article.
Lean Business Plan Template for Startups
Download Lean Business Plan Template for Startups
This Lean business plan template takes a traditional business plan outline and extracts the most essential elements. Use this template to outline your company and industry overview, convey the problem you are solving, identify customer segments, highlight key performance metrics, and list a timeline of key activities.
Business Plan Outline Template for Startups
Download Business Plan Outline Template for Startups
You can use this business plan outline as a basis to create your own business plan. This template contains all the elements of a traditional business plan, including a title page, a table of contents, and information on what to include in each section. Simplify or expand this outline based on the size and needs of your startup business.
Startup Business Planning Template with Timeline
Download Startup Business Planning Template with Timeline
Excel | Smartsheet
As you create your business plan, this business planning template doubles as a schedule and timeline to track the progress of key activities. This template enables you to break down your plan into phases and provides space to include key tasks and dates for each task. For a visual timeline, shade in the cells according to each task’s start and end dates. The timeline ensures that your plan stays on track.
Business Plan Rubric Template for Startups
Download Business Plan Rubric Template for Startups
Excel | Word | PDF | Smartsheet
If you’re starting a business and want to keep all your ducks in a row, use this rubric to evaluate and score each aspect of your startup business plan. You can tailor this template to the needs of your specific business, and can also highlight areas of your plan that require improvement or expansion. Use this template as a tool to make sure your plan is clear, articulate, and organized. A sharp, insightful, well thought-out plan will definitely get the attention of potential investors and partners.
For additional resources to help support your business planning efforts, check out “Free Startup Plan, Budget, and Cost Templates.”
What’s the Best Business Plan Template for Startups?
The template you choose for your startup business depends on a number of factors, including the size and specific needs of your company. Moreover, as your business grows and your objectives change, you will need to adjust your plan (and possibly your choice of template) accordingly.
Some entrepreneurs find it useful to use a Lean business plan template design in order to jot down a business concept and see if it’s feasible before pursuing it further. Typically one to three pages, a Lean business plan template encourages you to highlight core ideas and strategic activities and remain focused on key points.
Other entrepreneurs prefer a template with a more traditional business plan design, which allows you to go into greater detail and ensure you include every detail. A traditional plan can range from 10 to 100 pages and cover both the high-level and granular particulars of your overall concept, objectives, and strategy.
There is no one-size-fits-all solution, but the following section outlines the minimum that your business plan template should include in order to gain buy-in from potential investors.
What to Include in a Startup Business Plan
Whether you choose to use a template to develop your startup business plan or decide to write one from scratch, you need to include the following elements:
- An overview of your company and the industry in which it operates
- The problem you are solving and the proposed solution
- A description of your product or service offerings, including key features
- The existing alternatives that customers use and your competitive advantage
- The target customer segments and the channels you will use to reach them
- The cost structure and revenue streams associated with your business
- A financial plan, including sales and revenue projections (ideally 3-5 years)
- If applicable, the financial requirements to get your business running, including how you will source and allocate funds
Each of the following sections provides an example of a business plan that you can use for reference as you develop your own.
One-Page Lean Business Plan Example
This Lean business plan example displays a visually appealing and scannable one-page illustration of a business plan. It conveys the key strategies you need to meet your main objectives. Each element of this concise plan provides stakeholders and potential investors with links to resources that support and expand upon the plan’s details, and it can also serve as an investor pitch deck.
Startup Business Plan Sample
This business plan sample contains all the aspects of a standard business plan. Using a fictional food truck business as the basis for a startup business plan, this sample will give you all the ideas you need to make your plan outstanding.
Download Startup Business Plan Sample - PDF
When the time comes that you need more space to lay out your goals and strategies, choose from our variety of free simple business plan templates . You can learn how to write a successful simple business plan here .
Visit this free non-profit business plan template roundup or of you are looking for a business plan template by file type, visit our pages dedicated specifically to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates. Read our articles offering free 30-60-90-day business plan templates to find more tailored options.
Top 10 Tips to Create a Startup Business Plan
Putting together a business plan can be overwhelming and time consuming, especially if you aren’t sure where to begin. Below, we share tips you can use to help simplify the process of developing a startup business plan of your own.
- Use a business plan template, or begin with a business plan outline that provides all the elements of a standard plan to get your ideas down on paper in a structured manner. (You can choose from the selection of templates above.)
- Remove sections from your outline that aren’t relevant or that aren’t necessary to launch and operate your business.
- Compile the data you have gathered on your business and industry, including research on your target market and product or service offerings, details on the competitive landscape, and a financial plan that anticipates the next three to five years. Use that information to fill in the sections of your plan outline.
- Get input and feedback from team members (e.g., finance, marketing, sales) and subject matter experts to ensure that the information you’ve included in the plan is accurate.
- Make certain that the objectives of your plan align with marketing, sales, and financial goals to ensure that all team members are moving in the same direction.
- Although this section of the plan comes first, write the executive summary last to provide an overview of the key points in your business plan.
- Prepare a pitch deck for potential clients, partners, or investors with whom you plan to meet in order to share vital information about your business, including what sets you apart and the direction you are headed.
- Who are the founders and management executives, and what relevant experience do they bring to the table?
- What is the problem you are solving, and how is your solution better than what currently exists?
- What’s the size of the market, and how much market share do you plan to capture?
- What are the trends in your market, and how are you applying them to your business?
- Who are your direct competitors, and what is your competitive advantage?
- What are the key features of your product or service that set it apart from alternative offerings, and what features do you plan to add in the future?
- What are the potential risks associated with your business, and how do you plan to address them?
- How much money do you need to get your business running, and how do you plan to source it?
- With the money you source, how do you plan to use it to scale your business?
- What are the key performance metrics associated with your business, and how will you know when you’re successful?
- Revisit and modify your plan on a regular basis as your goals and strategies evolve.
- Use a work collaboration tool that keeps key information across teams in one place, allows you to track plan progress, and captures updates in real time.
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Do you want to increase the odds that your business startup will be a success? Then download this step-by-step business plan template and use it to lay the groundwork for your new business.
Writing a business plan gives you an opportunity to carefully think through every step of starting your company so you can better prepare and handle any challenges.
While a thorough business plan is essential in the financing process, it's helpful even if you don’t need outside financing.
Creating a business plan can:
- Help you discover any weaknesses in your business idea so you can address them before you open for business
- Identify business opportunities you may not have considered and plan how to take advantage of them
- Analyze the market and competition to strengthen your idea
- Give you a chance to plan strategies for dealing with potential challenges so they don’t derail your startup
- Convince potential partners, customers, and key employees that you’re serious about your idea and persuade them to work with you
- Force you to calculate when your business will make a profit and how much money you need to reach that point, so you can be prepared with adequate startup capital
- Determine your target market and how to reach them
Laying out a detailed, step-by-step plan gives you a blueprint you can refer to during the startup process and helps you maintain your momentum.
What this business plan template includes
Writing a business plan for a startup can sometimes seem overwhelming. To make the process easier and more manageable, this template will guide you step-by-step through writing it. The template includes easy-to-follow instructions for completing each section of the business plan, questions to help you think through each aspect, and corresponding fillable worksheet/s for key sections.
After you complete the 11 worksheets, you will have a working business plan for your startup to show your SCORE mentor .
The business plan sections covered in this template include:
- Executive Summary
- Company Description
- Products and Services
- Marketing Plan
- Operational Plan
- Management and Organization
- Startup Expenses and Capitalization
- Financial Plan
The Appendices include documents that supplement information in the body of the plan. These might be contracts, leases, purchase orders, intellectual property, key managers’ resumes, market research data, or anything that supports assumptions or statements made in the plan.
The last section of the template, “Refining Your Plan,” explains ways you may need to modify your plan for specific purposes, such as getting a bank loan, or for specific industries, such as retail or manufacturing.
Complete the Business Plan Template for a Startup Business to create a working business plan for your startup.
Then, contact your local SCORE mentor to review and refine your plan either online or in person.
Business Planning & Financial Statements Template Gallery Download SCORE’s templates to help you plan for a new business startup or grow your existing business.
An Easier Way to Prepare Your Business Plan -The Business Model Canvas The Business Model Canvas (BMC) is a one-page business plan that allows you to test and validate the key parts of your business in a manageable format.
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.
11 Things to Do Before Starting a Business
Table of contents.
- Understanding the work involved in starting a business is necessary for a successful launch.
- The importance of proper planning cannot be understated, as these decisions are core to how your business takes shape.
- Making good decisions early on can help ensure continued growth.
- This article is for those considering starting a new business and wanting to learn more about what it takes to get it up and running.
Starting a business can be stressful. It often feels like there are 1,000 things to work on all at the same time. There’s no avoiding this reality for new small business owners. Still, with a little planning, it’s possible to manage expectations and take actions with a sense of purpose toward building your business.
Launch your business: Starting a business is a lot of work, but we’re here to help! Check out our useful resources for everything you need to successfully build your business from the ground up.
- How to Start a Business: A Step-by-Step Guide
- 26 Great Business Ideas for Entrepreneurs
- Tax and Business Forms You’ll Need to Start a Business
- Startup Costs: How Much Cash Will You Need?
- 20 Mistakes to Avoid When Starting a Business
Beyond giving it your all, it’s important to direct your energy to the right tasks – especially at first. Some good first steps in starting a business are researching competitors, assessing the legal aspects of your industry, considering your personal and business finances, getting realistic about the risk involved, understanding timing, and hiring help.
11 tasks to complete before starting a business
To make sure you’re prepared before launching your business, make sure you’ve completed these 11 important tasks. Doing so will better position you and your new company for success.
1. Do your research.
You want to make sure you understand the industry you’ll be involved in so you can dominate it. Even if you think your business idea is unique, you should be aware of competitors, said Ian Wright, founder of British Business Energy.
“Just because you have a brilliant idea does not mean other people haven’t also had the same idea,” said Wright. “If you can’t offer something better and/or cheaper than your competitors, you might want to rethink starting a business in that area.”
2. Determine your audience.
Spend time considering who your target demographic is. This audience will be the driving force in each decision you make. Understanding who needs your product or service can help fine-tune your offerings and ensure your marketing and sales strategies are reaching the right people. Part of this decision is understanding if you are a business-to-consumer (B2C) or business-to-business (B2B) enterprise. Within those parameters are multiple categories, including, but certainly not limited to, age, gender, income and profession. You can’t earn a profit without your customers, so understand who they are and make them your priority.
“It is crucial to make sure you are delivering what your customer wants, not what you want,” said Sonia Lakhany, attorney at Lakhany Law. “This will give you insight into your customer’s buying decision and save you lots of experimenting down the road.”
Know whom you’re talking to. A defined target market will help you better acquire new and repeat customers.
3. Have a strong mission.
Standing out is no easy feat, and no one magic formula guarantees results. However, knowing your business’s purpose is central to guiding these decisions. By recognizing your business’s strengths, differences and purpose, you can make informed choices to expand your services and markets down the line in a way that is harmonious.
4. Choose a structure.
A key initial step to take when starting your business is choosing its legal structure, said business attorney Mason Cole of Cole Sadkin LLC. “It will dictate the taxes, paperwork, liability of the owner(s) [and] other legal aspects, as well as whether or not the company can have employees,” he said.
Additionally, you must acquire the proper local and state registration required to open your business.
“This means the entrepreneur will need to create the articles of incorporation, obtain an employer identification number and apply for necessary licenses, which will vary by state and industry,” Cole said.
5. Map your finances.
Starting a business requires money that you likely won’t have right away. This is why you need to seek out ways to acquire capital.
“Most entrepreneurs start a business with a very limited amount of capital, which is a large hurdle to many,” said Cole. “However, plenty of options are available to a budding business owner. The first and most common place to seek capital is with friends and family. If that is not enough, expand the search to angel investors and venture capitalists . Should these options not provide the amount needed, then apply for business loans through banks and small business associations.”
Make a plan for how you will fund startup costs, whether that’s using your own funds, asking friends and family for money, or borrowing from a financial institution.
6. Understand your tax burden.
Travis Sickle, a certified financial planner at Sickle Hunter Financial Advisors, advises entrepreneurs to be organized with taxes and fees. There are multiple payments to make, and filing any of them late could result in severe consequences.
“You have to figure out how much your payroll will be to make your tax payments timely,” said Sickle. “The timing can vary depending on your payroll. You must also figure out other business taxes, such as city, county and state.”
7. Understand the risk.
Of course, launching a new business venture will always involve a level of risk. Calculating, understanding and planning for risk is an important step to take before you start working on your business. This means assessing your industry’s risks before developing a business plan.
“ Entrepreneurs should know their industry’s risks before purchasing business insurance,” said Jeff Somers, COO of HouseCanary. “For example, accountants will want to consider professional liability insurance if a client files a lawsuit, claiming a costly error on their tax return. Restaurant owners are more likely to need general liability for slip-and-fall accidents and liquor liability insurance, which can pay for lawsuits.”
8. Put together a business plan.
A business plan outlines the steps you need to take for a successful launch and continued growth. This document is important for establishing a focus for your business, attracting C-level professionals to work for you and seeking and retaining capital. A business plan ensures you put your best foot forward with other professionals who are evaluating your company, so be sure to have this document on the back burner and ready when requested. [Looking for help putting together a business plan? Check out our tips on how to write a business plan .]
Take the time to put together the main components, including:
- Your mission statement
- A description of your business
- A list of your products or services
- An analysis of the current market and opportunity
- A list of decision-makers in the company, along with their bios
- Your financial plan so those who review can understand the opportunity
9. Time it right.
Timing is an important element of building a business. Sure, you want to start your business at a time when the economy is healthy and your prospective industry is expanding, but there’s also a flow to decision-making that’s important to be aware of. Kevin MacCauley, founder and CEO of Upper Hand, said it’s important to be decisive when building a business.
“I wish I understood how detrimental the role of time [can be] in building a business,” he said. “You only have so much time to find out if you’ve made the right business decisions . As I once read, if you’re 70 percent of the way to making a decision, make the decision. If you try to get to 90 percent, you’ve waited too long. If I could have had that mindset from day one, I would probably have had fewer sleepless nights when I was going through tough times.”
10. Look for a mentor or advisor.
Starting a business should not be an independent journey, no matter how tempting that sounds. Finding those who have made this journey before can help set you up for success. Network with other professionals in your industry, attend industry-specific workshops and events, and reach out to thought leaders in your industry to learn their approach. Alternatively, you may want to consider hiring a coach who can give you pointed advice.
11. Bring in the professionals.
Entrepreneurs can’t know everything about running their new venture. Tapping into seasoned professionals’ experience can ensure you’re starting on the right foot.
It’s especially important to have legal assistance to ensure you are protected and going about the process correctly.
“We often assume that legal counsel is for when we get ourselves into trouble, but preventative and proactive legal preparation can be the best way to set your business on the path to long-term success,” said Katy Blevins, CEO of Season of Katy. “When you call on legal counsel after you’ve run into a problem, it’s often too late or could critically impact your business in both the short and long term. Investing in their insight at the start of your business can pay a huge return later on by keeping you out of trouble before you even get into it.”
Another smart hire is an accountant. It’s nearly impossible for one person to handle every aspect of a company, and above all, your finances should not be put at risk.
“I had a full-time job as I considered starting my own business in 2009, but I did a lot of groundwork before I started, and bringing on an accountant was an important step,” said Sarah Burningham, president and founder of Little Bird Publicity. “It helped me understand what I needed to do to make this work from a profit standpoint, [as well as] the ins and outs of state, federal and local taxes.”
Starting a business right can lead to success
Starting a business is a lot of work, but if you do it the right way, you can set yourself up for a successful entrepreneurial journey. By following the tips in this guide and taking advantage of the resources we’ve included, you can build a strong foundation upon which to grow your business. Remember, becoming a small business owner is a journey filled with ups and downs, but if you develop a flexible plan and adapt to changing conditions, you can meet any challenge that comes your way!
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Why a startup doesn’t need a Business Plan
Although it became like a traditional norm for any formal Entrepreneur to have a well-documented plan in form of a business plan, its relevance and irrelevance in this 21 st century has become a topic of discussion. This article intends to explore why having a business plan could be largely irrelevant for a startup.
It is generally agreeable that a business plan helps an entrepreneur with majorly three things; to help him in the articulation of his vision for the business, to document how he plans to solve key challenges and finally, to help him pitch his business idea to potential investors. However, the validity of these arguments majorly focuses on the positive side while ignoring the other side of the story, which this article intends to present;
Preparing a business Plan is time-wasting
21 st century startup entrepreneurs are people who come up with ideas that could be new, innovative and really disruptive to the market. In most cases, the entrepreneurs don’t want to waste any of their precious time. And writing a business plan is so time consuming. In fact, it takes much time to prepare and overly compile a business plan, as to some extent it requires a certain level of mainstream business expertise. Yet the strength of most startups is that they leverage on a newly founded new niche, which they make a priority to dominate before any word spread out to potential competitors. Following the formal guidelines of a business plan can cause unnecessary jargons, hence compromising the company’s competitive lead position in the newly-founded niche.
The actual vision of the Business is the Founder
In most cases, the founders of a startup hold the vision of a company on their hearts because it is practically something they deeply care about so much. For this reason, there isn’t any need for formal document like a business plan, that outlines the founders’ vision for the business. For example, the approach of Mark Zuckerberg; the founder of Facebook was to primarily focus on growing the Platform’s userbase. So, Facebook’s unprecedented growth of userbase attracted attention and potential investors appeared with suitcases of big money without even asking for a business plan to read.
Potential investors don’t waste their precious time reading it
One of the reasons why business plans aren’t necessary is because investors don’t even read them because they don’t have time to waste. Investors are people loaded with their money. And if you need their attention, they prefer someone who can explain everything regarding a business opportunity in the smallest time possible. When pitching to investors, precision and articulation matter to them. So, when you present them a 40-paged business plan document, they aren’t going to read it because they don’t have time to waste. This is why an investor pitch deck is the perfect alternative to a business plan. With a pitch deck, the founder of a startup gets an opportunity to present a business idea or product in front of prospective investors. Typically, a couple of PowerPoint slides are used to showcase the company’s products, technology, and team to the investor. This is works more efficiently than presenting a multi-page document, which nobody is willing spend their precious time reading.
Mostly offer static and rigid perspective of the business!
The business climate keeps changing due to unpredictable economic and political circumstances. And business plans are known for an authoritarian and totally optimistic perspective that convinces the reader that there is no room for uncertainties in business. For example, business plans mostly look at the future with a rigidly optimistic perspective, neglecting the fact that anything can happen any time that could change consumer behaviours in the target market. This lack of flexibility leads to miscalculations if uncertainties like the change in the economic and political environment occurs. In other words, business plans tend to focus mostly on the good side of the business opportunity, while sidelining the fact that things like inflation could occur at any time. Even the political atmosphere can change, something that would be unfavourable for the business.
Centered on one-man’s approach
The other reason why a startup doesn’t need a Business Plan is because of building a business approach based on one man’s understanding. Startups are businesses with potential to grow into big companies. This means that as the business grow, the company stops relying on the sole wisdom and guidance of the founder; who might also be the sole architect of the business plan. When a startup adopts a business plan, almost 80% of the content are formulated based on the sole understanding of the founder. This overestimation of the founders’ potential to solely guide the company result into serious managerial or even technical miscalculations. A company is a place that comprises of a diverse community of people with potential to contribute different ideas, essential to the success of the business. And yet formulating a business plan as an official guiding document eliminates the possibility of leveraging on this wealth of diversified ideas from different people in the company.
Effective business planning should not eliminate or even undermine any useful input from various players, whether internal or external. Views of other staff members and those of potential customers are equally important in influencing the process. A broad range of input can ensure that important blind spots are not overlooked, and can also ensure buy-in and support from key constituencies essential to the success of the business.
Jean-Pierre Fumey is a polyglot communication specialist, freelance journalist, and writer for startup.info with over two decades of experience in media and public relations. He creates engaging content, manages communication campaigns, and attends conferences to stay up-to-date with the latest trends. He brings his wealth of experience and expertise to provide insightful analysis and engaging content for startup.info's audience.
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08/04/2020 at 3:26 PM
It may be true but to give investors details of your business and strategies you need a business plan. If all is in founders mind even then he has to explain it to investors. PowerPoint slides will come out of business plan as a summary. You can’t depend on few slides to capture investor.
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Small Business Trends
How to start a wedding rental business: your guide.
Entering the world of weddings isn’t just about love and romance; it’s a thriving industry with vast entrepreneurial opportunities. With many wedding business ideas available for aspiring entrepreneurs, one that often gets overlooked is wedding rentals.
If you’ve ever wondered how to start a wedding rental business, keep reading this article for guidance and actionable insights about how to start a business in this exciting field.
Understanding the Wedding Rentals Business
The wedding rental industry has witnessed consistent growth, with couples seeking bespoke experiences for their big day.
From thematic decors to couture gowns, the demand for unique and customized rentals is at an all-time high, making it an ideal time for entrepreneurs to venture into this market.
Why Start a Wedding Rental Business?
There’s no denying the allure and profitability of the wedding industry. Here’s why starting a wedding rental company could be your next best move:
- Lucrative Market : Weddings occur year-round, leading to a potential for continuous income throughout the year.
- Diverse Inventory Options : The vast range of products, from gowns to lighting setups, allows businesses to tailor their inventory to specific market demands.
- Recurring Business : Beyond the initial wedding, occasions like anniversaries and vow renewals can provide ongoing business opportunities.
- Flexible Business Model : The adaptability of this business lets entrepreneurs operate from different setups, whether a physical storefront or an online platform. You may even integrate wedding rentals into other businesses that serve this market. For example, you could look into how to start a limo business.
- Creative Freedom : This industry allows for constant innovation, letting you bring dream weddings to life through fresh, trendsetting ideas.
Starting a Successful Wedding Rental Business: A Step-by-Step Guide
Diving into the wedding rental industry can be rewarding, given the timeless demand for weddings.
However, to ensure the success and longevity of your business, certain foundational steps are pivotal.
From understanding the nuances of your local market to assembling a dedicated team, each aspect significantly determines your business’s trajectory.
Below, we delve into these key steps, offering insights and a business startup checklist to help you navigate the path to establishing a thriving wedding rental business.
Assessing the Market Demand
It’s vital to gauge the pulse of the local market. Conduct surveys, host focus groups, or simply engage with potential customers to understand their rental needs, budget constraints, and preferences.
Business Planning for Success
Wedding planning is the only aspect of a real company. Your business plan is your compass. It should detail your mission statement, market analysis, organizational structure, product line, marketing strategy, and financial projections.
Regularly revisiting and updating this plan ensures your business remains on track.
Registering Your Business and Obtaining a Business License
Taking the plunge into the business world necessitates some bureaucratic navigation.
Ensuring that your venture operates legally not only protects you from potential litigation but also establishes credibility with clients. Here’s how to navigate this terrain:
- Choosing a Business Name : Your business name should be memorable and resonate with the wedding rental industry. This helps potential clients find you more easily.
- Obtaining a Federal Tax ID : Known as the Employer Identification Number (EIN), this identification is essential for tax purposes and is a requirement for many business transactions.
- Securing Local Permits : Depending on where you’re based, local laws might necessitate specific permits for your type of business.
- Registering Your Business Entity : This decision entails choosing how you’ll structure your business, be it as an LLC, sole proprietorship, or entity.
- Business License : This is a fundamental requirement. A general business license ensures you can operate legally in your municipality and it often needs renewal, so stay updated.
Creating a Budget, Opening a Business Bank Account and Financing Your Business
Finances are the lifeblood of any business.
Proper financial planning and management can mean the difference between success and failure.
By forecasting potential expenses, estimating projected revenue, and setting clear financial boundaries, you can navigate the financial challenges of your venture:
- Budgeting : A detailed budget outlines both your operational costs and potential income, offering a clear financial overview.
- Business Bank Account : Keeping personal and business finances separate is crucial. Opening a dedicated account for your business ensures clearer financial tracking.
- Financing Options : There are numerous ways to secure funding, from traditional bank loans and small business grants to seeking out angel investors. Choose the option that aligns best with your needs and business model.
Building a Reliable Team
Having a stellar team can set your business apart.
From the first client interaction to the intricacies of inventory management, your staff’s competence and professionalism can greatly influence client satisfaction:
- Recruiting : Target individuals with relevant experience in the wedding or rental industry for key positions. Their expertise can be invaluable.
- Training : Constant training ensures that your team is updated with industry standards, trends, and best practices.
- Team Dynamics : Fostering a collaborative and positive work environment can enhance productivity and reduce employee turnover.
- Compensation and Benefits : Offering competitive salaries and benefits attracts top talent and ensures staff loyalty.
- Roles and Responsibilities : Clearly defining what’s expected of each team member from the onset can streamline operations and reduce potential conflicts.
Creating an Attractive and User-Friendly Website
In this digital age, an online presence is indispensable.
Your website serves as a virtual storefront, showcasing your products and services to a global audience. Ensure it’s professionally designed, user-friendly, and optimized for search engines.
Don’t forget to regularly update it with the latest inventory, client testimonials, and any promotional offers.
Implementing a Booking and Payment System
A streamlined booking and payment system can significantly enhance the customer experience when establishing a wedding rental business.
With today’s tech-savvy consumers, having a digital, easy-to-use interface is not only expected but essential.
This system can minimize manual errors, increase efficiency, and foster customer trust by providing a secure transaction environment.
Evaluate Your Needs
Assess your business’s unique requirements before diving into specific platforms or tools.
Determine the volume of transactions, the types of products or services on offer, and any specific features you may require, such as inventory tracking or contract signing.
Consider both your immediate needs and future growth prospects.
Research Available Platforms
There are myriad booking and payment systems on the market, each with its unique features and pricing models.
Look for platforms popular within the wedding industry, as they’re likely tailored to specific nuances and customer expectations.
Read reviews, request demos, and compare features to find a solution that aligns with your needs.
Ensure Security Measures
Security is paramount. The chosen system should employ robust encryption and comply with industry standards, ensuring that both business and client information remains protected.
Regularly updating the software and staying informed about the latest security threats will also help keep your system secure.
Integrate with Existing Infrastructure
If you already have a business website or other systems in place, ensure the chosen booking and payment platform integrates smoothly. Such integration might involve collaborating with web developers or utilizing plugins.
Seamless integration is crucial for user experience and operational efficiency.
Train Your Team
Once you’ve selected and integrated your booking and payment system, ensure your staff is well-versed in its operations.
Conduct training sessions, provide reference materials, and foster an environment where team members feel comfortable asking questions. Well-trained personnel will minimize errors and elevate the customer experience.
Monitor and Adjust
As with all business operations, it’s essential to review the system’s performance periodically.
Collect customer and staff feedback, address any pain points, and make adjustments as necessary.
This iterative process ensures that your system remains efficient, user-friendly, and beneficial to your business.
Designing a Marketing and Promotion Strategy
In the wedding industry, word of mouth is golden.
Delivering impeccable customer service can lead to positive reviews, referrals, and repeat business, driving your venture’s success.
- Search Engine Optimization : A robust SEO strategy ensures that your website ranks high on search engine results, bringing in organic traffic.
- Social Media Marketing : Platforms like Instagram, Pinterest, and Facebook allow you to showcase your products and engage with a broader audience.
- Partnerships with Industry Professionals : Collaborating with wedding planners, photographers, and other vendors can provide referrals and expand your client base.
- Local Advertisements : Leveraging local print and digital media can effectively target the local market.
- Loyalty Programs : Offering incentives for repeat rentals or client referrals can boost your business’s growth.
Providing Excellent Customer Service
The wedding industry thrives on recommendations and word-of-mouth marketing.
Offering exceptional customer service can lead to positive reviews and client referrals, cementing your business’s reputation in the market.
Regularly solicit feedback, promptly address concerns, and strive to exceed client expectations.
How to Start a Tuxedo Rental Business
Weddings remain an evergreen event, formal wear is consistently demanded.
Starting a tuxedo rental business can be lucrative, given that you take the right steps to establish your brand.
Market Research and Analysis
Conducting thorough market research helps in understanding your target audience, their preferences, and the current trends in the tuxedo rental business.
This research will guide you in making informed inventory, pricing, and marketing strategies decisions.
Finding the Right Suppliers
The backbone of any tuxedo rental business lies in its inventory.
Sourcing high-quality tuxedos is paramount.
Building and maintaining relationships with trusted suppliers ensures that your collection is always in vogue and of top-notch quality.
Marketing Your Tuxedo Rental Business
With numerous businesses in the wedding industry, setting yourself apart can be challenging. However, strategic marketing efforts can significantly enhance visibility and customer engagement.
- Online Presence : Establish a user-friendly website and engage in social media marketing. Display your collection, customer reviews, and offer online booking options.
- Local Collaborations : Partner with local wedding planners, venues, and photographers to promote your services.
- Offer Packages : Create packages with discounts for groomsmen or other wedding party members.
- Host Try-On Events : Organize events where potential customers can try on tuxedos, aiding in decision-making.
- Loyalty Programs : Reward returning customers with discounts or exclusive offers.
How to Start a Wedding Decoration Rental Business
The ambiance of a wedding is largely determined by its decor. Starting a wedding decoration rental business requires creativity and understanding the latest trends.
Business Plan Creation
Develop a comprehensive business plan that details your business model, target market, financial projections, and marketing strategies. It will serve as a roadmap for your business’s growth and helps in securing financing.
Sourcing and Storing Decorations
The aesthetic appeal of your inventory is crucial. While sourcing, focus on variety and quality. Ensure that the items are stored properly to maintain their pristine condition.
Fortunately, a variety of options are available to source wedding decorations, including:
- Attend Trade Shows : It’s a great way to find unique pieces and connect with suppliers.
- Purchase in Bulk : Buying in bulk can often lead to discounts and better deals.
- Storage Conditions : Ensure a dry, temperature-controlled environment to prevent damage.
- Inventory Management : Regularly check and maintain your inventory to ensure it’s in rentable condition.
- Invest in Packaging : Proper packaging can prevent wear and tear during transport.
Decoration Trends to Keep an Eye On
Staying updated with the latest decoration trends is essential. Couples look for unique and contemporary themes for their special day. Some popular themes include:
- Sustainable Decor : Eco-friendly and sustainable decorations are gaining popularity.
- Themed Weddings : From vintage to bohemian, themed decorations are in high demand.
- Interactive Decor : Photo booths, interactive wall displays, and more are being integrated.
- Minimalist Designs : Clean, simple, and elegant decors are becoming a favorite.
- Personalized Touches : Custom monograms or names integrated into the decor.
- Bright and Bold : Vibrant color palettes are making a comeback.
- Mixed Materials : Combining different materials like wood, metal, and fabric for a unique look.
How to Start a Wedding Dress Rental Business
Every bride dreams of wearing a perfect dress on her big day. Starting a wedding dress rental business can be a dream come true for many brides by providing them with their ideal dress at a fraction of the purchase price.
Before you open for business, it’ vital to determine whether you’ll cater to luxury brands, budget-friendly options, or a mix.
Selecting a Range of Dresses
Variety is key. Ensure your collection caters to different body types, tastes, and wedding themes. When stocking your wedding dress inventory, remember the following classic and trendy dresses:
- Classic White Gowns : Timeless pieces that appeal to traditional brides.
- Bohemian Dresses : Flowy gowns for beach or outdoor weddings.
- Cultural Dresses : Catering to specific cultural wedding traditions can set you apart.
- Plus-Size Collection : Ensure every bride finds her fit.
- Designer Collaborations : Limited edition designer pieces can attract a luxury clientele.
- Short Dresses : Perfect for a casual wedding or a reception party.
- Colored Gowns : Not every bride wants white; offer shades like blush, gold, or even black.
- Convertible Dresses : Gowns that can be modified, like detachable trains or sleeves, offer versatility.
Care and Maintenance of Wedding Dresses
Maintaining the dresses in impeccable condition is paramount. Regular checks, cleaning, and repairs will ensure customer satisfaction and longevity of the inventory.
Before you start cleaning rented wedding dresses, become aware of the following tips:
- Professional Cleaning : Post-rental, ensure each dress undergoes professional cleaning.
- Inspection After Every Use : Check for damages, stains, or wear and tear.
- Storage : Use garment bags and store in a moisture-free environment.
- Repairs : Immediate mending or fixing of any damages is crucial. You may also learn how to become a tailor to make any necessary alterations.
- Handling Instructions : Educate customers on proper handling to minimize damages.
How to Start a Wedding Supply Rental Business
Wedding supplies encompass a broad range of items from table settings to lighting. Establishing a wedding supply rental business involves meticulous planning and a keen understanding of wedding essentials.
The Essentials: What Every Wedding Supply Rental Business Needs
While the specific requirements can vary based on regional and cultural preferences, some items remain universally popular. No wedding supply rental business is complete without the following elements:
- Tables and Chairs : Essential for any wedding, ensure you have a variety in styles.
- Table Settings : Plates, glasses, cutlery, and napkins in various styles cater to different wedding themes.
- Lighting Equipment : Good lighting sets the mood from fairy lights to chandeliers.
- Dance Floors : Offer different sizes and finishes to suit venue requirements.
- Sound Systems : Quality sound systems for announcements and music are vital.
Setting Up Logistics
Efficient logistics are the backbone of a rental business. These encompass storage, transportation, and on-site setup.
Proper organization ensures timely delivery, setup, and collection, leading to satisfied customers and repeat business.
How to Start a Wedding Furniture Rental Business
A wedding is incomplete without the right furniture. It plays a crucial role in setting the ambiance, ensuring comfort for guests, and complementing the overall theme.
When launching a wedding furniture rental business, you first should determine if you’ll cater to luxury events, budget weddings, or a mix.
It’s also important to understand the demands and preferences of your target clientele.
Selecting a Range of Wedding Furniture
Offering a diverse range ensures you cater to various wedding themes and settings. When selecting the range you will offer your customers, don’t forget the following essentials:
- Classic Wooden Chairs : Perfect for both indoor and outdoor settings.
- Lounge Furniture : Sofas, armchairs, and coffee tables for relaxed seating areas.
- Themed Pieces : Vintage sofas, rustic benches, or modern setups cater to specific themes.
- Bars and Counters : Essential for serving drinks and food.
- Decorative Pieces : Items like arches or centerpieces that enhance the setting.
Storage and Maintenance of Wedding Furniture
Proper care ensures the longevity and aesthetic appeal of your inventory.
- Regular Cleaning : Dust, polish, and clean furniture pieces regularly.
- Climate-Controlled Storage : Protects from moisture and temperature variations.
- Prompt Repairs : Address any wear and tear immediately.
- Protective Coverings : Use covers during transportation to prevent damage.
- Rotate Inventory : Regularly rotate pieces in storage to avoid any one item from being overused.
How to Start a Wedding Tent Rental Business
Outdoor weddings are increasingly popular, making tent rentals a lucrative venture. However, they come with their set of challenges, including varying customer requirements and complex setups.
Whether it’s a beach wedding, a garden ceremony, or a grand reception on a large field, understanding the event type will guide your inventory decisions.
Sourcing High-Quality Tents
The quality of tents is paramount. It ensures safety, withstands weather conditions, and meets client expectations.
- Weather-Resistant Materials : Tents should withstand rain, wind, or scorching sun.
- Versatility in Size and Style : Offer various sizes and styles to cater to different events.
- Transparent and Opaque Options : Some events prefer transparent tents to enjoy natural beauty, while others opt for opaque for privacy.
- Safety Standards : Ensure tents meet safety regulations and can withstand strong winds.
- Modular Options : Tents that can be expanded or contracted based on guest count are ideal.
Tent Setup and Take-down Logistics
Tent logistics can be tricky, considering their size and the intricacies involved in setting them up.
- Skilled Manpower : Train a team proficient in safely setting up and taking down tents.
- Safety Precautions : Use weights, ropes, and stakes appropriately to ensure stability.
- Weather Monitoring : Keep an eye on weather predictions to make necessary preparations.
- Clear Instructions : Educate clients on safety precautions, especially in adverse weather.
- Inspection : Post-event, inspect the tent for damages or wear and tear.
How to Start a Wedding Audio and Lighting Rental Business
Sound and lighting are the soul of any event, and weddings are no exception. These elements set the mood and ensure everything runs smoothly.
First, you’ll want to decide if you want to cater to small intimate weddings, large-scale events, or both. This decision will influence your equipment inventory and pricing.
The Essentials of Wedding Audio and Lighting
Both sound and light contribute immensely to the overall experience of a wedding. Providing top-notch equipment ensures customer satisfaction.
- Microphones and Speakers : Essential for announcements, vows, and music.
- Mixers and Amplifiers : Ensure sound clarity and quality.
- LED Lights : Energy-efficient and versatile in creating ambiance.
- Spotlights : Highlight important moments or areas.
- Projectors and Screens : For displaying videos or slideshows during the event.
Care and Maintenance of Audio and Lighting Equipment
Regular maintenance ensures the equipment performs optimally and has a longer lifespan.
- Routine Checks : Before every event, test the equipment to ensure functionality.
- Professional Cleaning : Dust and grime can affect performance; regular cleaning is crucial.
- Storage : Store in a dry, cool place away from direct sunlight.
- Software Updates : If applicable, keep software updated for optimum performance.
- Repairs : Address any issues immediately to prevent further damage.
FAQs: How To Start A Wedding Rental Business
How profitable are wedding rental businesses.
Wedding rental businesses can be highly profitable, given the consistent demand for weddings annually. With proper planning, quality inventory, and effective marketing, businesses can see a considerable return on investment. Overheads are generally limited to maintenance, storage, and transportation, with the potential for high markup on rental prices.
How can I differentiate my wedding rental business from competitors?
Differentiation can be achieved through offering unique inventory items, exceptional customer service, competitive pricing for rental services, and building strong relationships with local wedding planners and venues. Engaging in sustainable practices or specializing in niche themes can also set your business apart.
How can local wedding planners help my rental business?
Local wedding planners are a goldmine for small businesses offering wedding rentals. They are often the first point of contact for couples and can recommend your services. Building strong relationships with them, offering package deals or commissions, and ensuring reliability can make you their go-to choice for rentals.
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Regions & Countries
‘back to school’ means anytime from late july to after labor day, depending on where in the u.s. you live.
About 70% of the 46.7 million public school students in the United States are now back in class, according to a new Pew Research Center analysis. Depending on where you grew up or live now, your reaction might be, “That sounds about right,” “Already?” or “What took them so long?”
Pew Research Center conducted this analysis to determine when public schools in the United States start classes. We collected school start dates for the 2023-24 school year from a nationally representative, stratified random sample of 1,573 districts.
To create this dataset, we began with a stratified random sample of 1,500 public school districts that was used in a 2023 Center analysis of school district mission statements (this analysis only covers “regular” public school districts and their equivalents; institutions such as charter schools and specialized state-run schools are excluded). That sample had been drawn from a comprehensive list of public school districts maintained by the National Center for Education Statistics (NCES). For more details for how that earlier sample was selected, read the methodology for that analysis.
We then supplemented that stratified sample in several ways:
- One district no longer exists and was removed from the dataset.
- Because school districts in Vermont, New Hampshire and New York City are classified not as “regular local districts” but as “component districts,” the initial sample missed them. So we drew an additional sample of 72 districts from those areas and added it to the original sample.
- The lone districts in Hawaii and Washington, D.C., neither of which were initially selected, were also added so that at least one district from all 50 states and the District of Columbia would be represented.
The data was weighted to account for each district’s probability of selection in both the initial and supplementary samples. Then it was calibrated so that both the weighted number of districts and the weighted number of students matched the totals for all eligible districts in the NCES list.
After these adjustments, we had a sample of 1,573 districts. For each one, we manually searched its website to find its 2023-24 calendar. If we couldn’t find a calendar (or a functioning website), we called the district office. In the end, we found start dates for 1,551 districts; the rest were coded as “no data.”
In most cases, districts had a single reopening date for all of their schools. When start dates varied, we used the date that applied to the most grade levels. In the few cases where we couldn’t determine that reliably, we went with the earliest reopening date on the calendar.
In some districts, certain schools may follow a “year-round” calendar rather than the “traditional” calendar (late summer/early fall to late spring/early summer). In those cases, we used the start date on the traditional calendars, since those were more comparable to the vast majority of U.S. school districts. As of the 2017-18 school year, only about 3% of public schools were on any type of year-round schedules , according to the U.S. Department of Education’s National Teacher and Principal Survey.
Student enrollment figures are taken from the NCES database and are for the 2021-22 school year. In addition, each district was coded as belonging to one of the U.S. Census Bureau’s nine geographic divisions for regional analysis.
Some, but not all, U.S. school districts offer prekindergarten classes. Student weights for each district in the sample include pre-K students when appropriate, but start dates are based on grades K-12.
Information on the laws and policies governing school start dates in each state came from the Education Commission of the States , a nonprofit research organization that serves education policymakers throughout the country.
For most U.S. K-12 students, the school year runs about 180 days, spread over roughly 10 months with a long summer vacation. Within that broad timeframe, however, there are substantial regional variations, according to our analysis of over 1,500 public school districts. (The analysis only covers “regular” public school districts and their equivalents; institutions such as charter schools and specialized state-run schools are excluded.)
For example, school tends to start earlier in southern regions than farther north, broadly speaking. More than two-thirds of students in the U.S. Census Bureau’s East South Central division – Alabama, Kentucky, Mississippi and Tennessee – went back to school the week of Aug. 7. They joined another 19% of students who had started classes earlier. In the West South Central division (Arkansas, Louisiana, Oklahoma and Texas), 94% of students returned to school between Aug. 7 and Aug. 18.
But in the six New England states, almost no one goes back to school before the week of Aug. 28. And students in the Middle Atlantic states – New Jersey, New York and Pennsylvania – go back even later: About three-quarters won’t hit the books until after Labor Day, which falls on Sept. 4 this year.
Even within regions, districts in the southernmost states sometimes start classes earlier than those farther north. For instance, within the sprawling South Atlantic division, sampled districts in its southernmost states (Florida and Georgia) have similar start-date patterns to those in the East South Central region, while the division’s northernmost jurisdictions (Maryland, Delaware and D.C.) more closely resemble districts in regions up north.
Some states stand apart from the overall trends in their region in other ways. In the West North Central region, for instance, roughly two-thirds of public school students start classes between Aug. 14 and Aug. 25. However, Minnesota law requires schools to start after Labor Day in most cases, and the vast majority of sampled Minnesota districts will go back after the holiday.
In the Census Bureau’s eight-state Mountain division, which stretches from the Canadian border to the Mexican border, nearly half of public school students overall return to school between Aug. 14 and Aug. 25. But almost all of the sampled districts in Arizona and New Mexico, the two southernmost states in that division, start one to three weeks earlier.
Why do start dates vary so much?
While such geographic variations are fairly apparent, the reasons for them are less clear. State laws certainly play a part: 16 states establish windows, either by statute or rule, for when school must start, according to data from the Education Commission of the States and individual state education agencies. But even in those states, the rules are fairly loose – merely requiring school to start before or after a certain date – and waivers for individual districts are not uncommon.
Contrary to popular belief, the school calendar isn’t a relic of the nation’s agrarian past . In fact, into the early 20th century, rural schools typically operated summer and winter sessions, with children working on farms in spring and fall to help with planting and harvesting. Urban schools, on the other hand, were open nearly year-round, though many children attended sporadically or for just part of the year.
Between roughly 1880 and 1920, urban and rural school calendars converged into more or less the pattern we know today, driven by factors such as pressure from education reformers, the high cost of keeping schools open year-round, the shift from one-room schoolhouses to age-graded education , and lower attendance in urban schools during the summer months (especially as family vacations grew in popularity).
Another possible explanation, for both the traditional calendar and the regional clustering of start dates, is “network effects,” in which a given standard becomes more useful as it’s adopted more widely. It’s easier, for instance, for a school district to recruit teachers from neighboring districts if those districts are on similar schedules.
School start dates could vary even more in the future with climate change. Some education experts predict hotter temperatures may force districts to adjust their start dates or times , especially in places like the Southwest, if schools can’t update air conditioning systems or make other accommodations.
Note: This is an update of a post originally published Aug. 14, 2019.
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About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts .