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Highlights of Business Plan

JAN.11, 2013

What is the best business plan?

The business plan is that component of your startup that decides whether the startup would boom or collapse. Considering its far-reaching impacts, it is necessary to make an accurate, detailed, and workable business plan.

There is no fixed criterion for the best business plan. Usually, a business plan is considered best if it covers:

• Financial Highlights
• Management Highlights
• Marketing Highlights
• SMART Business Goals
• Operations & Strategic Plan

To have the best and most promising business plan for your business, you need to have education and experience in the relevant field. If you don’t possess the former or latter, you must consider hiring a professional firm to create a business plan for your business.

If you need an idea of highlights of a business plan, you can visit business plans available free of cost on our website.

What is the most important step in developing a polished business plan?

It is only by thorough and factual research that you can make a polished business plan. It includes research on how the businesses are launched in your locality, what are the registration procedures, and the business climate. Next, you have to explore market analytics via secondary analysis or conducting surveys.

Following this, you have to investigate your likely customers, competitors, and stakeholders. Then, the new procedures, technology, and software available in your area to manage the business operations. Thereafter, you have to decide on the strategy to optimize your production, explore the methods to recruit a talented workforce, and keep them productive, trained, and motivated all the time.

What are the management highlights in the business plan?

Management highlights in the business plan are the policies and strategies that revolve around practically operating your business. Management of a business is a complex task that involves boosting the overall productivity of the business while also maintaining the finances.

A business has several types of operations going along, and hundreds of egos have to collaborate to regulate those operations. It is only by efficient management that the employees, resources, and customers are grouped to coherently achieve the business goals.

Management is always a hierarchical process so that surveillance, performance assessment, and reward allocation can be done most efficiently.

The overall management of a business is divided into the following branches:

• Sales Management
• Production Management
• Program Management
• Human Resource Management
• Strategic Management
• Financial Management

On our website, you can explore highlights and components of business plan for startups in different niches.

What are the financial highlights of the business plan?

Gaining more and more customers is the ultimate goal of every business no matter what the niche is. To ensure that you get the desired target audience, you need to design customer-centric marketing highlights in business plan. Your marketing highlighters in business plan should elaborate on the following aspects.

• Micro and macro trends in the market where you are situated
• Analysis of other businesses that are operating in vicinity
• Criteria on basis of which you will measure and compare your marketing goals. They can be CSAT score, customer retention rate, average ratings, etc.
• Insight into the psychology and purchasing power of your customers
• Your sales strategy and concrete measures to advertise your venture

Sales strategy is extremely important as it pertains to convince a person to spend his hard-earned dollars to procure what you sell. The designing of sales strategy is tricky as you have to convince without overwhelming your target customer with call to action.

What are the marketing accents in the business plan?

Gaining more and more customers is the ultimate goal of every business no matter what the niche is. To ensure that you get the desired target audience, you need to design customer-centric marketing highlights in the business plan. Your marketing highlighters in the business plan should elaborate on the following aspects.

• Analysis of other businesses that are operating in the vicinity
• Criteria on basis of which you will measure and compare your marketing goals. They can be CSAT scores, customer retention rate, average ratings, etc.

Sales strategy is extremely important as it pertains to convincing a person to spend his hard-earned dollars to procure what you sell. The designing of a sales strategy is tricky as you have to convince without overwhelming your target customer with a call to action.

Financial highlights in business plan relate to drawing financial projections for your business from the time you launch it to at least 5 years ahead. It outlines the cash flows i.e. from where the money will come and where it would go. Moreover, it presents a pictorial display of data so that you could assess the brake even point, and set your pricing strategy, discount policies, and budget that is to be spent on different aspects.

While doing financial planning, you have to ensure 100 % accuracy. Otherwise, you might end up with complicated balance sheets and wrong business ratios.

Your financial plan helps you define the trajectory of your business. Any minor glitches can result in making wrong decisions. Therefore, it is recommended to never experiment with making a financial plan and hire a professional for the task.

Via this financial highlights business plan example, you can learn the generic overview of financial highlights. For getting customized  tailored to your needs, you can contact us from here .

The components and examples of business plan financial highlights are as follows:

• Important Assumptions
• Break-even Analysis
• Profit Monthly
• Profit Yearly
• Gross Margin Monthly
• Gross Margin Yearly
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios

How do I prepare a business plan for beginners?

If you want to develop a business plan for your venture but are inexperienced in the field, you have to spend some days learning the process. 

In this highlights business plan, we are listing the steps following which you can make a flawless business plan.

Stepwise Guide for Beginners to Prepare a Business Plan

1. Research & Exploration

The first step is to figure out what aspects are in the highlights of a business plan. For that you may consult business plan highlights samples.

2. Understand Legal Constraints

Find the state requirements to launch the business in your preferred area.

3. Consider Taking Online Course

Making a business plan is a systemic process. It is advisable to take an online course to learn how to evaluate the relevant terms and figures.

4. Outline the In-Flows

Know what you have to invest in your venture.

5. Construct Management Plan

Make a concrete management plan with responsibilities and job duties that do not overlap.

6. Know Whom to Recruit

Set criteria for judging candidates and hiring the right ones.

7. Plan for Finances

Decide how much to spend where and at what time.

8. Do Market Research

Know every stakeholder, market statics, and dynamics.

9. Advertise

Reach out to the people to whom you want to sell.

Establish your brand.

Get Flawless Business Plan Made by OGSCapital Experts

If you don’t know how to make a 100% accurate business plan highlights template, let OGS takes care of your worries. Here is why OGS is your promising service provider:

16 Years of Industrial Experience

Throughout the years, we have completed hundreds of projects for designing business plans, feasibility studies, due diligence, compensation plans, financial projections, and more for the following sectors:

• Online Businesses
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• And many more!

To gauge our expertise and experience, you may visit OGSCapital from here and read business plan highlights examples.

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At OGSCapital, our philosophy is to develop workable solutions for you. Customer satisfaction is our topmost priority. Prompt replies, incorporation of revisions, and guidance-centric communication make our work more beneficial to you than us!

Here is what our clients say about us!

• What do business plan highlights mean?

Business plan highlights are the guiding principles and strategies to identify and achieve organizational goals, prepare for potential risks, and capitalize on opportunities and solutions.

• What are the highlights of a good plan?

Highlights for business plan include major strategies related to business operations, management, finance department, marketing, and growth.

• Apart from the business plan, what other factors are relevant when starting a business?

Apart from the business plan, having a clear idea of how you would finance your venture, get investment, earn profits, and spend those profits to earn even more, is a must.

• What is the best business idea plan?

It is a subjective debate that depends on your location, your target audience, your resources, and most importantly your aptitude. To know which business idea plan is best per your interests and specifics, you may explore different startups and their plans.

• What is the right length for a business plan?

There is no fixed criterion. The right length for a business plan is the one that precisely covers financial, management, and growth highlights in a business plan.

Download Sample From Here

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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How to Write a Business Plan, Step by Step

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What is a business plan?

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. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.

ZenBusiness

A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

» Need help writing? Learn about the best business plan software .

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers 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. This should contain basic 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, write a little about 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 what you’d like to accomplish, both in the near term and over the coming years.

If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.

» MORE: How to write a successful business plan for a loan

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.

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.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» 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.

Accounting software may be able to generate these reports for you. It may also help you calculate 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.

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.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are some tips to write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. 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. 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...

Find small-business financing

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Blog Business

How to Write a Business Plan Outline [Examples + Templates] 

By Letícia Fonseca , Aug 11, 2023

When venturing into crafting a business plan, the initial hurdle often lies in taking that first step.

So, how can you evade those prolonged hours of staring at a blank page? Initiate your journey with the aid of a business plan outline.

As with any endeavor, an outline serves as the beacon of clarity, illuminating the path to confront even the most formidable tasks. This holds particularly true when composing pivotal documents vital to your triumph, much like a business plan.

Nonetheless, I understand the enormity of a business plan’s scope, which might make the task of outlining it seem daunting. This is precisely why I’ve compiled all the requisite information to facilitate the creation of a business plan outline. No need to break a sweat!

And if you’re seeking further assistance, a business plan maker and readily available business plan templates can offer valuable support in shaping your comprehensive plan.

Read on for answers to all your business plan outline questions or jump ahead for some handy templates. 

Click to jump ahead:

What is a business plan outline (and why do you need one), what format should you choose for your business plan outline, what are the key components of a business plan outline.

• Business plan template examples
• Writing tips to ace your outline 

A business plan outline is the backbone of your business plan. It contains all the most important information you’ll want to expand on in your full-length plan. 

Think of it this way: your outline is a frame for your plan. It provides a high-level idea of what the final plan should look like, what it will include and how all the information will be organized. 

Why would you do this extra step? Beyond saving you from blank page syndrome, an outline ensures you don’t leave any essential information out of your plan — you can see all the most important points at a glance and quickly identify any content gaps. 

It also serves as a writing guide. Once you know all the sections you want in your plan, you just need to expand on them. Suddenly, you’re “filling in the blanks” as opposed to writing a plan from scratch!

Incidentally, using a business plan template like this one gives you a running head start, too: 

Perhaps most importantly, a business plan outline keeps you focused on the essential parts of your document. (Not to mention what matters most to stakeholders and investors.)  With an outline, you’ll spend less time worrying about structure or organization and more time perfecting the actual content of your document. 

If you’re looking for more general advice, you can read about  how to create a business plan here . But if you’re working on outlining your plan, stick with me.

Return to Table of Contents

Most business plans fit into one of two formats. 

The format you choose largely depends on three factors: (1) the stage of your business, (2) if you’re presenting the plan to investors and (3) what you want to achieve with your business plan. 

Let’s have a closer look at these two formats and why you might choose one over the other.

Traditional format

Traditional business plans  are typically long, detailed documents. In many cases, they take up to 50-60 pages, but it’s not uncommon to see plans spanning 100+ pages. 

Traditional plans are long because they cover  every aspect  of your business. They leave nothing out. You’ll find a traditional business plan template with sections like executive summary, company description, target market, market analysis, marketing plan, financial plan, and more. Basically: the more information the merrier.

This business plan template isn’t of a traditional format, but you could expand it into one by duplicating pages:

Due to their high level of detail, traditional formats are the best way to sell your business. They show you’re reliable and have a clear vision for your business’s future. 

If you’re planning on presenting your plan to investors and stakeholders, you’ll want to go with a traditional plan format. The more information you include, the fewer doubts and questions you’ll get when you present your plan, so don’t hold back. 

Traditional business plans require more detailed outlines before drafting since there’s a lot of information to cover. You’ll want to list all the sections and include bullet points describing what each section should cover. 

It’s also a good idea to include all external resources and visuals in your outline, so you don’t have to gather them later. 

Lean format

Lean business plan formats are high level and quick to write. They’re often only one or two pages. Similar to a  business plan infographic , they’re scannable and quick to digest, like this template: 

This format is often referred to as a “startup” format due to (you guessed it!) many startups using it. 

Lean business plans require less detailed outlines. You can include high-level sections and a few lines in each section covering the basics. Since the final plan will only be a page or two, you don’t need to over prepare. Nor will you need a ton of external resources. 

Lean plans don’t answer all the questions investors and stakeholders may ask, so if you go this route, make sure it’s the right choice for your business . Companies not yet ready to present to investors will typically use a lean/startup business plan format to get their rough plan on paper and share it internally with their management team. 

Here’s another example of a lean business plan format in the form of a financial plan: 

Your business plan outline should include all the following sections. The level of detail you choose to go into will depend on your intentions for your plan (sharing with stakeholders vs. internal use), but you’ll want every section to be clear and to the point. 

1. Executive summary

The executive summary gives a high-level description of your company, product or service. This section should include a mission statement, your company description, your business’s primary goal, and the problem it aims to solve. You’ll want to state how your business can solve the problem and briefly explain what makes you stand out (your competitive advantage).

Having an executive summary is essential to selling your business to stakeholders , so it should be as clear and concise as possible. Summarize your business in a few sentences in a way that will hook the reader (or audience) and get them invested in what you have to say next. In other words, this is your elevator pitch.

2. Product and services description

This is where you should go into more detail about your product or service. Your product is the heart of your business, so it’s essential this section is easy to grasp. After all, if people don’t know what you’re selling, you’ll have a hard time keeping them engaged!

Expand on your description in the executive summary, going into detail about the problem your customers face and how your product/service will solve it. If you have various products or services, go through all of them in equal detail. 

3. Target market and/or Market analysis

A market analysis is crucial for placing your business in a larger context and showing investors you know your industry. This section should include market research on your prospective customer demographic including location, age range, goals and motivations. 

You can even  include detailed customer personas  as a visual aid — these are especially useful if you have several target demographics. You want to showcase your knowledge of your customer, who exactly you’re selling to and how you can fulfill their needs.

Be sure to include information on the overall target market for your product, including direct and indirect competitors and how your industry is performing. If your competitors have strengths you want to mimic or weaknesses you want to exploit, this is the place to record that information. 

4. Organization and management

You can think of this as a “meet the team” section — this is where you should go into depth on your business’s structure from management to legal and HR. If there are people bringing unique skills or experience to the table (I’m sure there are!), you should highlight them in this section. 

The goal here is to showcase why your team is the best to run your business. Investors want to know you’re unified, organized and reliable. This is also a potential opportunity to bring more humanity to your business plan and showcase the faces behind the ideas and product. 

5. Marketing and sales

Now that you’ve introduced your product and team, you need to explain how you’re going to sell it. Give a detailed explanation of your sales and marketing strategy, including pricing, timelines for launching your product and advertising.

This is a major section of your plan and can even live as a separate document for your marketing and sales teams. Here are some  marketing plan templates to help you get started .

Make sure you have research or analysis to back up your decisions — if you want to do paid ads on LinkedIn to advertise your product, include a brief explanation as to why that is the best channel for your business. 

6. Financial projections and funding request

The end of your plan is where you’ll look to the future and how you think your business will perform financially. Your financial plan should include results from your income statement, balance sheet and cash flow projections. 

State your funding requirements and what you need to realize the business. Be extremely clear about how you plan to use the funding and when you expect investors will see returns.

If you aren’t presenting to potential investors, you can skip this part, but it’s something to keep in mind should you seek funding in the future. Covering financial projections and the previous five components is essential at the stage of business formation to ensure everything goes smoothly moving forward.

7. Appendix

Any extra visual aids, receipts, paperwork or charts will live here. Anything that may be relevant to your plan should be included as reference e.g. your cash flow statement (or other financial statements). You can format your appendix in whatever way you think is best — as long as it’s easy for readers to find what they’re looking for, you’ve done your job!

Typically, the best way to start your outline is to list all these high-level sections. Then, you can add bullet points outlining what will go in each section and the resources you’ll need to write them. This should give you a solid starting point for your full-length plan.

Business plan outline templates

Looking for a shortcut? Our  business plan templates  are basically outlines in a box! 

While your outline likely won’t go into as much detail, these templates are great examples of how to organize your sections.

Traditional format templates

A strong template can turn your long, dense business plan into an engaging, easy-to-read document. There are lots to choose from, but here are just a few ideas to inspire you… 

You can duplicate pages and use these styles for a traditional outline, or start with a lean outline as you build your business plan out over time:

Lean format templates

For lean format outlines, a simpler ‘ mind map ’ style is a good bet. With this style, you can get ideas down fast and quickly turn them into one or two-page plans. Plus, because they’re shorter, they’re easy to share with your team.

Writing tips to ace your business plan outline

Business plans are complex documents, so if you’re still not sure how to write your outline, don’t worry! Here are some helpful tips to keep in mind when drafting your business plan outline:

• Ask yourself why you’re writing an outline. Having a clear goal for your outline can help keep you on track as you write. Everything you include in your plan should contribute to your goal. If it doesn’t, it probably doesn’t need to be in there.
• Keep it clear and concise. Whether you’re writing a traditional or lean format business plan, your outline should be easy to understand. Choose your words wisely and avoid unnecessary preambles or padding language. The faster you get to the point, the easier your plan will be to read.
• Add visual aids. No one likes reading huge walls of text! Make room in your outline for visuals, data and charts. This keeps your audience engaged and helps those who are more visual learners. Psst,  infographics  are great for this.
• Make it collaborative. Have someone (or several someones) look it over before finalizing your outline. If you have an established marketing / sales / finance team, have them look it over too. Getting feedback at the outline stage can help you avoid rewrites and wasted time down the line.

If this is your first time writing a business plan outline, don’t be too hard on yourself. You might not get it 100% right on the first try, but with these tips and the key components listed above, you’ll have a strong foundation. Remember, done is better than perfect. 

Create a winning business plan by starting with a detailed, actionable outline

The best way to learn is by doing. So go ahead, get started on your business plan outline. As you develop your plan, you’ll no doubt learn more about your business and what’s important for success along the way. 

A clean, compelling template is a great way to get a head start on your outline. After all, the sections are already separated and defined for you! 

Explore Venngage’s business plan templates  for one that suits your needs. Many are free to use and there are premium templates available for a small monthly fee. Happy outlining!

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant 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 company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

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

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

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

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

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

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

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

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

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

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

Let’s get started.

Why Are Business Plans Important?

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

1. Proves Your Business Viability

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

2. Guides You Throughout the Business Cycle

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

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

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

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

3. Helps You Make Better Business Decisions

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

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

4. Eliminates Big Mistakes

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

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

5. Secures Financing and Attracts Top Talents

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

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

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

Key Elements of Business Plan

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

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

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

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

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

1. Executive Summary

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

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

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

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

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

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

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

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

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

Components of an Executive Summary

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

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

2. Business Description

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

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

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

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

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

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

Components of a Business Description

Your business description needs to contain these categories of information.

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

3. Market Analysis

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

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

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

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

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

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

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

Market Analysis Factors

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

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

Components of the Market Analysis Section

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

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

4. Marketing Plan

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

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

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

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

5. Sales Strategy

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

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

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

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

6. Competitive Analysis

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

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

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

This section should define the following:

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

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

7. Management and Organization

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

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

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

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

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

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

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

8. Products and Services

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

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

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

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

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

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

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

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

9. Operating Plan

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

The operating plan for your business should include:

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

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

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

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

10. Financial Projections and Assumptions

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

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

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

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

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

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

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

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

11. Request For Funding

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

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

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

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

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

12. Exhibits and Appendices

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

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

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

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

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

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

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

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September 29, 2017

Business plan: How to write the financial summary

The financial summary of a business plan could be regarded as the lifeline of the business. It is what breathes an air of life and practicality into the business. The financial section many times appears at the back of the plan, but this does not downplay its importance. In fact, it is the most scrutinized section of the plan. Investors may actually pay more attention to it than other parts of the plan because the value of a business is in its figures.

The financial summary gives insight into the profitability of the business , aspects of debt and equity estimated operating expenses, financial statement forecasts , future growth projections and business financing. The financial data that’s contained in this section is quite structured and in-depth. You may find charts, formulas, tables, graphs, and spreadsheets. It may require the input of a financial expert such as an accountant in order to write it accurately.

This article will consider how you can go about writing the financial summary of your business plan.

Introduction to the financial summary 

The financial summary of a business plan normally starts with the introduction to the financial plan. The format and structure of the introduction is purely left to the drawer of the business plan. The introduction basically gives the reader a basic outline to what is contained in the section.

An example of an introduction is as follows:

“This financial plan gives the forecasted financial statements of Company ABC for a three year projected period. The income statement, cash flow statement and balance sheet have been drawn and the assumptions made have been outlined. The end of each fiscal year has been set for September 2nd. The business capital requirements at startup are valued at $100,000. The business owner will inject $50,000 while the remaining $50,000 will be financed through a bank loan.”

Financial Statements and Analyses

The second part of the financial section will revolve around the forecasted financial statements and analyses. Here, the following financial statement and analyses are laid down:

1. Forecasted income statement

2. Cash flow statement (Forecasted)

3. Forecasted balance sheet

4. Sensitivity analysis

5. Breakeven analysis

6. Ratio analysis

It is best to put each statement and analysis on its own page. It is also time saving to use spreadsheets when drawing these statements and analyses. There are three financial statements that are normally written in business plans. They include:

1) Balance Sheet (Statement of Assets and Liabilities)

This statement shows what the business is worth. It states all the assets that a business has and their respective values; as well as all the liabilities and debt that the business may have. Simply, it adds all that the business owns (assets) and what it owes (liabilities) and the difference between these two forms the business’ net worth.

The net worth of the business is referred to as equity in some circles. The balance sheet normally states the net worth of the business as at a certain date. Most businesses draw it at the end of their fiscal year.

2) Income Statement (Profit and Loss Statement)

This statement shows the earnings of a business over a given period. It adds all the revenues and subtracts all the expenditures to get the net profit or loss in that trading period. When writing the plan, one can use the statistics of other businesses in the industry to get the figures that are useful in drawing the income statement.

3) Cash flow statement

As the name suggests, this statement tracks the flow of cash in a business over a period. It also shows the users of the statement the cash at hand at any given moment in time. The cash flow statement typically analyzes the changes that occur on the balance sheet. The inflow and outflow of cash in the company is captured, and the description of how the cash was spent is given.

The importance of break-even analysis for business plan 

This financial tool is used to determine the point of sales that a business should reach for it to get neither profit nor loss from trading. Simply, it is the point at which the difference between the total revenues and total expenses of the business is zero. Important elements that are considered in the break even analysis include:

• The fixed costs
• Variable costs
• Selling price

Also, the items present in the income statements are quite vital when doing the break-even analysis. When calculating the break even points, it is recommended to do them over a three year period for consistency. It also remains your own prerogative to decide whether you will provide readers of the business plan with explanations on the finer details of the analysis.

The sensitivity analysis

This analysis is used to identify the effect that increased and decreased forecasted sales have on the net income of the business. This increase and decrease are usually in percentage form. The reader of the business plan will see how your net income changes when your sales go up or down by say, 15%, 20%, and 30%. The percentage chosen remains in the prerogative of the business plan writer. However, when using the sensitivity analysis , one should know that a forecasted sale is never 100% accurate. Also, values below 14% should be avoided.

Ratio analysis

A ratio analysis is a general tool used by investors to ascertain the performance of a business (existing or potential). Values from the balance sheet are divided with other values from the income statement. This is done mostly under the time frame of three fiscal years. A percentage or decimal is then deduced.

The ratios are then compared to other businesses’ in the industry to gauge performance. Financiers may also use ratio analyses to inform their financing decisions particularly regarding the feasibility and return on equity.

A business plan writer can describe how the ratio has changed over the three years of the forecast.

• Ratios have specific labels, for example:
• Current ratio
• Quick ratio
• Debt to equity ratio
• Return on Equity

In each ratio, the formula used to calculate is given, and the corresponding dollar value is assigned to each item.

Notes to the financial summary

This is the last part of the financial section of the business plan. It summarizes every idea, assumption, and thought-processes that were used to create the forecasted financial statements. It is usually written in the period of three years of the forecast.

These notes are vital to the readers of the business plan as they give the detailed information that aids them to understand the forecasts and projections. The notes should always come after the financial statements and analyses. It beats logic to have them before the statements and analysis. It also serves to avoid confusion and incomprehension by readers.

The notes should also have labels with specific reference to the item being described. For example:

• Net income note to the financial statements
• Accounts payable note to the financial statements
• Accounts receivable note to the financial statements
• Retained earnings note to the financial statements

The positive value that notes to the financial statements in the financial section have is that they make readers of the business plan understand your projections. Hence, the investors and financiers are more certain of your business. Certainty is a motivating factor for financiers and investors to invest in a business.

The financial section of a business plan benefits not only the investors and financiers but also the business owner. It aids them to understand their business better. It is also a vital aid in running the business. Most writers prefer the turabian paper format when writing the financial section and in extension the whole business plan.

The credibility of the financial section will purely rely on how realistic you are when writing it. A good way of doing this is by breaking the figures into components such that they can be analyzed on an individual basis.

The highlighted tips on how to write the financial section of your business plan are sure to help you run your business better. They can also draw more investors to your business. Hence, a win-win situation for your business.

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How to Write the Financial Section of 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.

Taking Stock of Expenses

The income statement, the cash flow projection, the balance sheet.

The financial section of your business plan determines whether or not your business idea is viable and will be the focus of any investors who may be attracted to your business idea. The financial section is composed of four financial statements: the income statement, the cash flow projection, the balance sheet, and the statement of shareholders' equity. It also should include a brief explanation and analysis of these four statements.

Think of your business expenses as two cost categories: your start-up expenses and your operating expenses. All the costs of getting your business up and running should be considered start-up expenses. These may include:

• Business registration fees
• Business licensing and permits
• Starting inventory
• Rent deposits
• Down payments on a property
• Down payments on equipment
• Utility setup fees

Your own list will expand as soon as you start to itemize them.

Operating expenses are the costs of keeping your business running . Think of these as your monthly expenses. Your list of operating expenses may include:

• Salaries (including your own)
• Rent or mortgage payments
• Telecommunication expenses
• Raw materials
• Distribution
• Loan payments
• Office supplies
• Maintenance

Once you have listed all of your operating expenses, the total will reflect the monthly cost of operating your business. Multiply this number by six, and you have a six-month estimate of your operating expenses. Adding this amount to your total startup expenses list, and you have a ballpark figure for your complete start-up costs.

Now you can begin to put together your financial statements for your business plan starting with the income statement.

The income statement shows your revenues, expenses, and profit for a particular period—a snapshot of your business that shows whether or not your business is profitable. Subtract expenses from your revenue to determine your profit or loss.

While established businesses normally produce an income statement each fiscal quarter or once each fiscal year, for the purposes of the business plan, an income statement should be generated monthly for the first year.

Not all of the categories in this income statement will apply to your business. Eliminate those that do not apply, and add categories where necessary to adapt this template to your business.

If you have a product-based business, the revenue section of the income statement will look different. Revenue will be called sales, and you should account for any inventory.

The cash flow projection shows how cash is expected to flow in and out of your business. It is an important tool for cash flow management because it indicates when your expenditures are too high or if you might need a short-term investment to deal with a cash flow surplus. As part of your business plan, the cash flow projection will show how  much capital investment  your business idea needs.

For investors, the cash flow projection shows whether your business is a good credit risk and if there is enough cash on hand to make your business a good candidate for a line of credit, a  short-term loan , or a longer-term investment. You should include cash flow projections for each month over one year in the financial section of your business plan.

Do not confuse the cash flow projection with the cash flow statement. The cash flow statement shows the flow of cash in and out of your business. In other words, it describes the cash flow that has occurred in the past. The cash flow projection shows the cash that is anticipated to be generated or expended over a chosen period in the future.

There are three parts to the cash flow projection:

• Cash revenues: Enter your estimated sales figures for each month. Only enter the sales that are collectible in cash during each month you are detailing.
• Cash disbursements: Take the various expense categories from your ledger and list the cash expenditures you actually expect to pay for each month.
• Reconciliation of cash revenues to cash disbursements: This section shows an opening balance, which is the carryover from the previous month's operations. The current month's revenues are added to this balance, the current month's disbursements are subtracted, and the adjusted cash flow balance is carried over to the next month.

The balance sheet reports your business's net worth at a particular point in time. It summarizes all the financial data about your business in three categories:

• Assets :  Tangible objects of financial value that are owned by the company.
• Liabilities: Debt owed to a creditor of the company.
• Equity: The net difference when the  total liabilities  are subtracted from the total assets.

The relationship between these elements of financial data is expressed with the equation: Assets = Liabilities + Equity .

For your  business plan , you should create a pro forma balance sheet that summarizes the information in the income statement and cash flow projections. A business typically prepares a balance sheet once a year.

Once your balance sheet is complete, write a brief analysis for each of the three financial statements. The analysis should be short with highlights rather than in-depth analysis. The financial statements themselves should be placed in your business plan's appendices.

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How to Craft the Financial Section of Business Plan (Hint: It’s All About the Numbers)

Writing a small business plan takes time and effort … especially when you have to dive into the numbers for the financial section. But, working on the financial section of business plan could lead to a big payoff for your business.

Read on to learn what is the financial section of a business plan, why it matters, and how to write one for your company.  

What is the financial section of business plan?

Generally, the financial section is one of the last sections in a business plan. It describes a business’s historical financial state (if applicable) and future financial projections. Businesses include supporting documents such as budgets and financial statements, as well as funding requests in this section of the plan.  

The financial part of the business plan introduces numbers. It comes after the executive summary, company description , market analysis, organization structure, product information, and marketing and sales strategies.

Businesses that are trying to get financing from lenders or investors use the financial section to make their case. This section also acts as a financial roadmap so you can budget for your business’s future income and expenses. 

Why it matters 

The financial section of the business plan is critical for moving beyond wordy aspirations and into hard data and the wonderful world of numbers. 

Through the financial section, you can:

• Forecast your business’s future finances
• Budget for expenses (e.g., startup costs)
• Get financing from lenders or investors
• Grow your business

• Growth : 64% of businesses with a business plan were able to grow their business, compared to 43% of businesses without a business plan.
• Financing : 36% of businesses with a business plan secured a loan, compared to 18% of businesses without a plan.

So, if you want to possibly double your chances of securing a business loan, consider putting in a little time and effort into your business plan’s financial section. 

Writing your financial section

To write the financial section, you first need to gather some information. Keep in mind that the information you gather depends on whether you have historical financial information or if you’re a brand-new startup. 

Your financial section should detail:

• Business expenses 

Financial projections

Financial statements, break-even point, funding requests, exit strategy, business expenses.

Whether you’ve been in business for one day or 10 years, you have expenses. These expenses might simply be startup costs for new businesses or fixed and variable costs for veteran businesses. 

Take a look at some common business expenses you may need to include in the financial section of business plan:

• Licenses and permits
• Cost of goods sold 
• Rent or mortgage payments
• Payroll costs (e.g., salaries and taxes)
• Utilities 
• Equipment 
• Supplies 
• Advertising 

Write down each type of expense and amount you currently have as well as expenses you predict you’ll have. Use a consistent time period (e.g., monthly costs). 

Indicate which expenses are fixed (unchanging month-to-month) and which are variable (subject to changes). 

How much do you anticipate earning from sales each month? 

If you operate an existing business, you can look at previous monthly revenue to make an educated estimate. Take factors into consideration, like seasonality and economic ups and downs, when basing projections on previous cash flow.

Coming up with your financial projections may be a bit trickier if you are a startup. After all, you have nothing to go off of. Come up with a reasonable monthly goal based on things like your industry, competitors, and the market. Hint : Look at your market analysis section of the business plan for guidance. 

A financial statement details your business’s finances. The three main types of financial statements are income statements, cash flow statements, and balance sheets.

Income statements summarize your business’s income and expenses during a period of time (e.g., a month). This document shows whether your business had a net profit or loss during that time period. 

Cash flow statements break down your business’s incoming and outgoing money. This document details whether your company has enough cash on hand to cover expenses.

The balance sheet summarizes your business’s assets, liabilities, and equity. Balance sheets help with debt management and business growth decisions. 

If you run a startup, you can create “pro forma financial statements,” which are statements based on projections.

If you’ve been in business for a bit, you should have financial statements in your records. You can include these in your business plan. And, include forecasted financial statements. 

You’re just in luck. Check out our FREE guide, Use Financial Statements to Assess the Health of Your Business , to learn more about the different types of financial statements for your business.

Potential investors want to know when your business will reach its break-even point. The break-even point is when your business’s sales equal its expenses. 

Estimate when your company will reach its break-even point and detail it in the financial section of business plan.

If you’re looking for financing, detail your funding request here. Include how much you are looking for, list ideal terms (e.g., 10-year loan or 15% equity), and how long your request will cover. 

Remember to discuss why you are requesting money and what you plan on using the money for (e.g., equipment). 

Back up your funding request by emphasizing your financial projections. 

Last but not least, your financial section should also discuss your business’s exit strategy. An exit strategy is a plan that outlines what you’ll do if you need to sell or close your business, retire, etc. 

Investors and lenders want to know how their investment or loan is protected if your business doesn’t make it. The exit strategy does just that. It explains how your business will make ends meet even if it doesn’t make it. 

When you’re working on the financial section of business plan, take advantage of your accounting records to make things easier on yourself. For organized books, try Patriot’s online accounting software . Get your free trial now!

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Management Plan in a Business Plan

What is a management plan in a business plan? As a small business owner, you know you face an uphill battle. 4 min read updated on February 01, 2023

What is a management plan in a business plan? As a small business owner, you know you face an uphill battle. About 80 percent of new ventures fail within their first five years. Why? Most of the time it's due to flawed operating procedures or a less-than-optimal management structure.

What Is a Management Plan?

The management plan is all about employees and operations.

• Employees are one of the most important parts of any new venture. Good employees can make your life much easier, while bad employees can distract you and be a detriment to your success.
• Operational structure can be the difference between a successful venture and a failure.

When you're putting together a business plan , the operations and management section will describe how your business will operate on a day-to-day basis. It will cover all the essentials:

• Your company's physical location
• Other important processes

This section is an easy way to answer basic questions about your business without overwhelming readers.

Carefully crafting a professional and thorough business plan is an important step in forming a new venture. It will keep you on track and clearly define strategy and goals. However, business plans are only as good as the people behind them.

A venture's biggest asset is the entrepreneur. Investors won't make a move until they know they have complete confidence in an entrepreneur. Does he or she have the right experience? Is he or she willing to put in the work? These are just two of the questions Investors will have to answer before working with a new entrepreneur .

The management section of your business plan is an excellent space to highlight the members of your management team . Tell your readers and potential investors who will be managing your company, where they come from, how they will help your venture, and anything else that will signal your venture's future success. Be sure to cast the best light on your management team. Your investors need to know that this team is capable of anything.

There are usually three parts to a good Management and Staffing portion of a business plan:

• Management team details
• Key supporters and alliances, such as an advisory board
• Staffing and employment requirements

A few things to remember as you work on this section of your business plan:

• Your readers are usually potential investors. They need to know you and your management team are trustworthy and deserving of their investment.
• Investors need to know that you and your team can do the job; they need to get a feel for your attitudes and your abilities.
• Showing your team has a wide variety of skills and experiences will give you an advantage when presenting your business plan.
• It's all about the people. Business plans are great for answering key questions about the new venture, but at the end of the day, investors are looking to partner with hard-working, trustworthy people.

Now let's talk about operations. The operations section of the business plan describes several key characteristics of your business. For example, if your business has a physical, "brick and mortar" location, take time in this portion of the business plan to describe the area around your business. Tell your investors why your location is optimal for your business.

Make a note of your standard operating hours. Answer questions like,

• When will you open every day?
• When will you close?
• Will you be open during holidays?
• If so, which ones?

This is also a great section to list out your daily operation details, the different products or services you will provide, your standard operating procedures, customer service, and so on.

Take time in the Inventory section of your operations plan to list out potential suppliers, vendors, or contractors with whom you have agreements. Your partners, even the third-party ones, reflect upon you, so make sure to sing their praises. Put some thought into an inventory plan. Remember, too much inventory means you're likely wasting valuable resources that could be deployed elsewhere. On the other hand, too little inventory means you could be losing out on potential customers.

Once again, your management team plays a crucial role in your operations plan. Tell your investors exactly who they are, how they are uniquely qualified, and how their responsibilities will be divided with operations.

The management and operations sections of your business plan will demonstrate to your investors that you have the right team and the right strategy to be successful in a competitive industry.

If you need help with a management plan in a business plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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How to Write the Management Team Section of a Business Plan + Examples

Written by Dave Lavinsky

Over the last 20+ years, we’ve written business plans for over 4,000 companies and hundreds of thousands of others have used our business plan template and other business planning materials.

From this vast experience, we’ve gained valuable insights on how to write a business plan effectively , specifically in the management section.

What is a Management Team Business Plan?

A management team business plan is a section in a comprehensive business plan that introduces and highlights the key members of the company’s management team. This part provides essential details about the individuals responsible for leading and running the business, including their backgrounds, skills, and experience.

It’s crucial for potential investors and stakeholders to evaluate the management team’s competence and qualifications, as a strong team can instill confidence in the company’s ability to succeed.

Why is the Management Team Section of a Business Plan Important?

Your management team plan has 3 goals:

• To prove to you that you have the right team to execute on the opportunity you have defined, and if not, to identify who you must hire to round out your current team
• To convince lenders and investors (e.g., angel investors, venture capitalists) to fund your company (if needed)
• To document how your Board (if applicable) can best help your team succeed

What to Include in Your Management Team Section

There are two key elements to include in your management team business plan as follows:

Management Team Members

For each key member of your team, document their name, title, and background.

Their backgrounds are most important in telling you and investors they are qualified to execute. Describe what positions each member has held in the past and what they accomplished in those positions. For example, if your VP of Sales was formerly the VP of Sales for another company in which they grew sales from zero to $10 million, that would be an important and compelling accomplishment to document.

Importantly, try to relate your team members’ past job experience with what you need them to accomplish at your company. For example, if a former high school principal was on your team, you could state that their vast experience working with both teenagers and their parents will help them succeed in their current position (particularly if the current position required them to work with both customer segments).

This is true for a management team for a small business, a medium-sized or large business.

Management Team Gaps

In this section, detail if your management team currently has any gaps or missing individuals. Not having a complete team at the time you develop your business plan. But, you must show your plan to complete your team.

As such, describe what positions are missing and who will fill the positions. For example, if you know you need to hire a VP of Marketing, state this. Further, state the job description of this person. For example, you might say that this hire will have 10 years of experience managing a marketing team, establishing new accounts, working with social media marketing, have startup experience, etc.

To give you a “checklist” of the employees you might want to include in your Management Team Members and/or Gaps sections, below are the most common management titles at a growing startup (note that many are specific to tech startups):

• Founder, CEO, and/or President
• Chief Operating Officer
• Chief Financial Officer
• VP of Sales
• VP of Marketing
• VP of Web Development and/or Engineering
• UX Designer/Manager
• Product Manager
• Digital Marketing Manager
• Business Development Manager
• Account Management/Customer Service Manager
• Sales Managers/Sales Staff
• Board Members

If you have a Board of Directors or Board of Advisors, you would include the bios of the members of your board in this section.

A Board of Directors is a paid group of individuals who help guide your company. Typically startups do not have such a board until they raise VC funding.

If your company is not at this stage, consider forming a Board of Advisors. Such a board is ideal particularly if your team is missing expertise and/or experience in certain areas. An advisory board includes 2 to 8 individuals who act as mentors to your business. Usually, you meet with them monthly or quarterly and they help answer questions and provide strategic guidance. You typically do not pay advisory board members with cash, but offering them options in your company is a best practice as it allows you to attract better board members and better motivate them.

Management Team Business Plan Example

Below are examples of how to include your management section in your business plan.

Key Team Members

Jim Smith, Founder & CEO

Jim has 15 years of experience in online software development, having co-founded two previous successful online businesses. His first company specialized in developing workflow automation software for government agencies and was sold to a public company in 2003. Jim’s second company developed a mobile app for parents to manage their children’s activities, which was sold to a large public company in 2014. Jim has a B.S. in computer science from MIT and an M.B.A from the University of Chicago

Bill Jones, COO

Bill has 20 years of sales and business development experience from working with several startups that he helped grow into large businesses. He has a B.S. in mechanical engineering from M.I.T., where he also played Division I lacrosse for four years.

We currently have no gaps in our management team, but we plan to expand our team by hiring a Vice President of Marketing to be responsible for all digital marketing efforts.

Vance Williamson, Founder & CEO

Prior to founding GoDoIt, Vance was the CIO of a major corporation with more than 100 retail locations. He oversaw all IT initiatives including software development, sales technology, mobile apps for customers and employees, security systems, customer databases/CRM platforms, etc. He has a  B.S in computer science and an MBA in operations management from UCLA.

We currently have two gaps in our Management Team: 

A VP of Sales with 10 years of experience managing sales teams, overseeing sales processes, working with manufacturers, establishing new accounts, working with digital marketing/advertising agencies to build brand awareness, etc. 

In addition, we need to hire a VP of Marketing with experience creating online marketing campaigns that attract new customers to our site.

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Other Resources for Writing Your Business Plan

• How to Write an Executive Summary
• How to Expertly Write the Company Description in Your Business Plan
• How to Write the Market Analysis Section of a Business Plan
• The Customer Analysis Section of Your Business Plan
• Completing the Competitive Analysis Section of Your Business Plan
• Financial Assumptions and Your Business Plan
• How to Create Financial Projections for Your Business Plan
• Everything You Need to Know about the Business Plan Appendix
• Business Plan Conclusion: Summary & Recap

Other Helpful Business Plan Articles & Templates

How to Highlight Risks in Your Business Plan

Tallat Mahmood

5 min. read

Updated October 25, 2023

One of the areas constantly dismissed by business owners in their business plan is an articulation of the risks in the business.

This either suggests you don’t believe there to be any risks in your business (not true), or are intentionally avoiding disclosing them.

Either way, it is not the best start to have with a potential funding partner. In fact, by dismissing the risks in your business, you actually make the job of a lender or investor that much more difficult.

Why a funder needs to understand your business’s risks:

Funding businesses is all about risk and reward.

Whether it’s a lender or an investor, their key concern will be trying to balance the risks inherent in your business, versus the likelihood of a reward, typically increasing business value. An imbalance occurs when entrepreneurs talk extensively about the opportunities inherent in their business, but ignore the risks.

The fact is, all funders understand that risks exist in every business. This is just a fact of running a business. There are risks that exist with your products, customers, suppliers, and your team. From a funder’s perspective, it is important to understand the nature and size of risks that exist.

• There are two main reasons why funders want to understand business risks:

Firstly, they want to understand whether or not the key risks in your business are so fundamental to the investment proposition that it would prevent them from funding you.

Some businesses are not at  the right stage to receive external funding  and placate funder concerns. These businesses are best off dealing with key risk factors prior to seeking funding.

The second reason why lenders and investors want to understand the risk in your business is so that they can structure a funding package that works best overall, despite the risk.

In my experience, this is an opportunity that many business owners are wasting, as they are not giving funders an opportunity to structure deals suitable for them.

Here’s an example:

Assume your business is  seeking equity funding,  but has a key management role that needs to be filled. This could be a key business risk for a funder.

Highlighting this risk shows that you are aware of the appointment need, and are putting plans in place to help with this key recruit. An investor may reasonably decide to proceed with funding, but the funding will be released in stages. Some will be released immediately and the remainder will be after the key position has been filled.

The benefit of highlighting your risks is that it demonstrates to investors that you understand the danger the risks pose to your company, and are aware that it needs to be dealt with. This allows for a frank discussion to take place, which is more difficult to do if you don’t acknowledge this as a problem in the first place.

Ultimately, the starting point for most funders is that they  want  to invest in you, and  want  to validate their initial interest in you.

Highlighting your business risks will allow the funder to get to the nub of the problem, and give them a better idea of how they may structure their investment in order to make it work for both parties. If they are unsure of the risks or cannot get clear explanations from the team, it is unlikely they will be forthcoming when it comes to finding ways to make a potential deal work.

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• The right way to address business risks:

The main reason many business owners don’t talk about business risks with potential funders is because they don’t want to highlight the weaknesses in their business.

This is a fair concern to have. However, there is a right way to address business risk with funders, without turning lenders and investors off.

The solution is to focus on how you  mitigate the risks.  

In other words, what are the steps you are taking in your business as a direct reaction to the risks that you have identified? This is very powerful in easing funder fears, and in positioning you as someone who has a handle on their business.

For example, if a business risk you had identified was a high level of customer concentration, then a suitable mitigation plan would be to market your products or services targeting new clients, as opposed to focusing all efforts on one client.

Having net profit margins that are lower than average for your market would raise eyebrows and be considered a risk. In this instance, you could demonstrate to funders the steps you are putting in place over a period of time to help increase those margins to at least market norms for your niche.

The process of highlighting risks—and, more importantly, outlining key mitigating actions—not only demonstrates honesty, but also a leadership quality in solving the problems in your business. Lenders and investors want to see both traits.

• The impact on your credibility:

Any lender or investor  backs the leadership team  of a business first, and the business itself second.

This is because they realize that it is you, the management team, who will ultimately deliver value and grow the business for the benefit for all. As such, it is imperative that they have the right impression about you.

The consequence of highlighting business risks in your business plan with mitigations is that it provides funders a real insight into you as a business leader. It demonstrates that not only do you have an understanding of their need to understand risk in your business, but you also appreciate that minimizing that risk is your job.

This will have a massive impact on your credibility as a business owner and management team. This impact is more acute when compared to the hundreds of businesses they will meet that omit discussing the risks in their business.

The fact is, funders have seen enough businesses and business plans in all sectors to instinctively know what risks to expect. It’s just more telling if they hear it from you first.

• What does this mean for you going forward?

Funders rely on you to deliver on your inherent promise to add value to your business for all stakeholders. The weight of this promise becomes much stronger if they can believe in the character of the team, and that comes from your credibility.

A business plan that discusses business risks and mitigations is a much more complete plan, and will increase your chances of securing funding.

Not only that, but highlighting the risks your business faces also has a long-term impact on your character and credibility as a business leader.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tallat Mahmood is founder of The Smart Business Plan Academy, his flagship online course on building powerful business plans for small and medium-sized businesses to help them grow and raise capital. Tallat has worked for over 10 years as a small and medium-sized business advisor and investor, and in this period has helped dozens of businesses raise hundreds of millions of dollars for growth. He has also worked as an investor and sat on boards of companies.

Table of Contents

• Why a funder needs to understand your business’s risks:

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• International

Trump can pay smaller bond in civil fraud case as judge sets April date for hush money trial

By Lauren del Valle , Jeremy Herb , Kara Scannell , Maureen Chowdhury , Dan Berman and Elise Hammond , CNN

Key takeaways from Trump’s wild day of legal developments

From CNN's Jeremy Herb, Lauren del Valle and Kara Scannell

Donald Trump received both a lifeline from the courts Monday and a trial date for the first criminal trial of a former president in US history, a  pair of rulings  that hit home the legal whiplash constantly surrounding him.

The twin rulings Monday, which came roughly within an hour of each other, hit the intersection of challenges to Trump’s image and his famed business empire as he seeks a second term in the White House.

Here are key takeaways from another historic day for Trump:

• Hush money trial date set: Trump’s historic criminal trial in the New York hush money case against him will begin with jury selection on April 15, Judge Juan Merchan said Monday, after a dispute over the late production of documents caused the judge initially to  push back the start date . Barring another unforeseen hiccup, the former president will face a jury on criminal charges for at least one of his trials before the November election. The date is three weeks later than originally scheduled, but the delay won’t make much of a dent on Trump’s 2024 calendar – and it’s still murky whether any of his other three trials will happen before the election.
• Appeals court lowers Trump’s bond: The more significant ruling Monday may have been a New York appeals court allowing him to post a  reduced $175 million bond  to appeal the $464 million civil fraud judgment against him, his adult sons and his company. Trump told reporters he will cover the bond using cash as a collateral. Trump’s lawyers said last week that he was  unable to post  a $464 million bond to appeal the civil fraud judgement against him. Trump faced a Monday deadline to post bond or else New York Attorney General Letitia James could have begun the process of seizing his property. But the appeals court ruling gave Trump an additional 10 days to post a bond of $175 million.
• Judge dismisses allegations made against district attorney: During Monday’s hearing, Merchan also discredited Trump’s allegations of misconduct against the district attorney’s office, finding that prosecutors cooperated in the effort to secure documents from the US Attorney’s Office of the Southern District of New York. "It’s odd that we’re even here," the judge said at one point. The judge repeatedly also said how serious and concerning Trump’s allegations were against Manhattan prosecutors, at one point raising his voice on the bench.

Read more about today's legal developments in the two cases.

Fact Check: Trump repeats baseless claims about Biden orchestrating his trials

From CNN’s Daniel Dale

Former President Donald Trump repeated some familiar baseless claims in remarks on Monday after major developments in two of his New York legal cases. He spoke after a judge  set an April 15 date  for the beginning of his Manhattan, New York, criminal trial on charges of falsifying business records related to a hush money scheme, and, separately, an appeals court  reduced the bond he must put up  after being found liable for civil fraud.

Trump claimed that “this is all Biden-run things” and that “these are all Biden trials.” He also claimed that Matthew Colangelo, a former senior Justice Department official who now works for Manhattan District Attorney Alvin Bragg, had been “put into” the district attorney’s office by Biden. 

Facts First:   There is no basis for Trump’s claims. First, there is no evidence that Biden has been involved in bringing or running any of the criminal or civil cases against Trump. The Manhattan prosecution is being led by Bragg and the civil fraud case by New York state Attorney General Letitia James. Both Bragg and James are elected officials who do not report to the president or the federal Justice Department. Second, there is no evidence that Biden had anything to do with Colangelo’s  decision to leave the federal Justice Department and join the district attorney’s office in 2022  as  senior counsel to Bragg . Colangelo and Bragg knew each other before Bragg was elected Manhattan district attorney.

Read more about the fact check.

A look at Trump’s busy legal and election calendar

From CNN's Devan Cole and Amy O'Kruk

Donald Trump is juggling a busy court and campaign schedule as he defends himself in  several criminal cases  while also vying for a second term in the White House.

The former president’s criminal hush money trial is  expected to start on April 15 . He faces charges stemming from his alleged falsification of business records with the intent to conceal illegal conduct connected to his 2016 presidential campaign.

The trial start date in Trump’s  classified documents  case in Florida had been set for late May, but the judge overseeing that case revisited the timing of the trial during a key hearing on March 1. Judge Aileen Cannon has not yet set a new date for the trial.

Here's what the former president's colliding calendar looks like:

Here are where things stand in Trump's civil fraud case and criminal hush money trial

From CNN's staff

Former President Donald Trump had a big legal day on Monday where some major movements happened in the civil fraud and hush money cases against him.

Here's what to know about each case:

Hush money case : Trump  is charged with  34 counts of falsifying business records , stemming from reimbursements made to Trump’s former lawyer and fixer Michael Cohen for hush money payments he made before the 2016 election to cover up an alleged affair with adult film star Stormy Daniels.

The former president has pleaded not guilty and denied the affair.

During a hearing in New York on Monday, which Trump attended, Judge Juan Merchan said the criminal trial against the former president will begin on April 15 with jury selection. The judge dismissed the Trump’s motion to toss out the indictment altogether or delay the trial further.

Civil fraud case : A New York appeals court ruled Trump must pay a $175 million bond as he appeals the civil fraud judgment against him. He also was given 10 additional days to post the bond.

It’s a major lifeline for the former president, who, along with his adult sons and his company, were fined more than $464 million, which was due today, after Judge Arthur Engoron found Trump and his co-defendants fraudulently inflated the value of his assets.

The ruling staves off the prospect, for now, of New York Attorney General Letitia James seeking to seize the former president’s property to enforce the judgment against him.

Trump attorney says appellate ruling on civil fraud bond is a "great first step" towards reversal of judgment 

From CNN’s Kara Scannell

Donald Trump’s attorney Christopher Kise in a statement said the appellate ruling on the civil fraud bond is a "great first step towards reversal of “baseless and reckless judgment.”

Kise also said Trump looks forward to a "full and fair appellate process" that ends the New York Attorney General’s "abuse of power and tyrannical pursuit" of the Republican presidential candidate.

More on the ruling: A New York appeals court Monday said Trump has to post $175 million in 10 days in order for his appeal of Judge Arthur Engoron’s ruling to go forward — giving the former president a lifeline as he faced possible seizure of his prized real estate properties.

New York appellate court's ruling to reduce Trump’s bond is "highly unusual," legal expert says

From CNN’s Allison Morrow

Donald Trump scored a roughly 60% discount on the amount of cash he’ll need to pony up to avoid having his assets seized by the state of New York — an outcome that one legal expert said was “highly unusual.” 

A New York appellate court reduced Trump’s bond to $175 million from $464 million, and granted him 10 days to come up with the payment.

“It’s highly unusual that it would be reduced at all,” said Mitchell Epner, a former federal prosecutor in New York. “And it’s highly unusual that it would be reduced by this amount.”

But, Epner said it’s not unprecedented, citing the 1980s fight between Texaco and Pennzoil, in which a court reduced Texaco’s bond from more than $10 billion to $1 billion. Texaco ended up filing for bankruptcy in 1987.

Trump, his adult sons and his company were fined more than $464 million, including interest, in the New York civil trial, after Judge Arthur Engoron found Trump and his co-defendants fraudulently inflated the value of his assets.

Correction:  This post has been updated with the correct dollar amount of Trump's earlier bond.

Trump says he would have "no problem" testifying in New York hush money trial

From CNN's Ali Main

Former President Donald Trump said Monday that he would have "no problem" testifying in his criminal hush money trial that is now scheduled to begin next month.

"I would have no problem testifying. I didn't do anything wrong," Trump told reporters after attending a hearing in that trial in New York.

Trump’s New York criminal trial will begin on April 15 with jury selection, Judge Juan Merchan said Monday, after dismissing the former president’s motion to toss out the indictment altogether or delay the trial further.

Despite the set date, Trump cast doubt on whether the trial would take place, saying, "I don't know that you're gonna have the trial. I don't know how you can have a trial like this in the middle of an election, a presidential election."

Asked if he was concerned that a conviction in that trial could cost him the election in November, Trump answered, "Well, it could also make me more popular because the people know it's a scam. It's a Biden trial."

Trump on civil fraud bond: "I have a lot of cash"

From CNN's Ali Main and Kate Sullivan

Former President Donald Trump touted that he has "a lot of cash" when asked about the timeline of securing the $175 million bond in the civil fraud case against him.

He went on to say how he would also like to use his cash funds for his reelection bid and claimed, but "they don't want me to use my cash to get reelected."

Asked if he planned to start personal funds into his presidential campaign, Trump responded, "First of all, it's none of your business," before adding, "I might do that. I have the option."

The former president also said he thought it would be possible to borrow money from a foreign government to post a bond in an American trial, but that he wouldn't need to. Pressed by CNN's Kate Sullivan if he would ever accept money from a foreign government to pay, Trump responded, "I don't do that. I mean, I think you'd be allowed to, possibly," remarking that many of the "biggest banks" are outside of the US.

This post has been updated with additional comments from Trump.

Trump claims hush money trial is being rushed as it is set to begin next month

Former President Donald Trump claimed that the hush money trial against him in New York is being rushed and called it "election interference."

“You have a case which … they’re dying to get this thing started. The judge cannot go faster. He wants to get it started so badly," Trump said.

If the trial goes ahead on April 15, it could be the only of Trump’s criminal trials to take place before the November general election. The trial will have begun a year after the charges were filed.

Trump also argued there should not be a trial during the election and attacked his opponent, President Joe Biden.

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Biden’s Budget Underscores Divide With Republicans and Trump

The president’s $7.3 trillion budget proposal for the next fiscal year includes about $3 trillion in deficit reduction over a decade, largely from raising taxes on high earners and corporations.

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Biden Plan Would Raise Taxes on Corporations and the Wealthy

The proposals in president biden’s budget plan, including the tax increases, project to reduce deficits by about $3 trillion over a decade..

It’s my goal to cut the federal debt even more by making big corporations and the very wealthy begin to pay their fair share. I’m not anticorporation. I represented the state of Delaware. More corporations incorporated in Delaware than every other state in America combined. Combined. But guess what? But I’m a capitalist, man. Make all the money you want. Just begin to pay your fair share, your taxes. I had a tax code that charged them [billionaires] 25 percent. Not the highest rate — 25 percent. You know how much that would raise over the next 10 years? $400 billion. [$400] billion a year. Imagine what we could do, from cutting the deficit to providing for child care, to providing health care, to continue to provide our military with all they need. So, folks, look, this is not beyond our capacity.

By Jim Tankersley

Jim Tankersley is an economic policy reporter who has covered White House budget releases since the Obama administration.

• March 11, 2024

President Biden proposed a $7.3 trillion budget on Monday packed with tax increases on corporations and high earners, new spending on social programs and a wide range of efforts to combat high consumer costs like housing and college tuition.

The proposal includes only relatively small changes from the budget plan Mr. Biden submitted last year, which went nowhere in Congress, though it reiterates his call for lawmakers to spend about $100 billion to strengthen border security and deliver aid to Israel and Ukraine.

Most of the new spending and tax increases included in the fiscal year 2025 budget again stand almost no chance of becoming law this year, given that Republicans control the House and roundly oppose Mr. Biden’s economic agenda. Last week, House Republicans passed a budget proposal outlining their priorities, which are far afield from what Democrats have called for.

Instead, the document will serve as a draft of Mr. Biden’s policy platform as he seeks re-election in November, along with a series of contrasts intended to draw a distinction with his presumptive Republican opponent, former President Donald J. Trump.

Mr. Biden has sought to reclaim strength on economic issues with voters who have given him low marks amid elevated inflation. This budget aims to portray him as a champion of increased government aid for workers, parents, manufacturers, retirees and students, as well as the fight against climate change.

Speaking in New Hampshire on Monday, Mr. Biden heralded the budget as a way to raise revenue to pay for his priorities by raising taxes on the wealthiest Americans and big corporations.

“I’m not anti-corporation,” he said. “I’m a capitalist, man. Make all the money you want. Just begin to pay your fair share in taxes.”

The budget proposes about $5 trillion in new taxes on corporations and the wealthy over a decade. Administration officials said Monday that those increases would be split equally between corporations and the nation’s highest earners, and that Americans earning less than $400,000 a year would enjoy tax cuts totaling $750 billion under their plans.

“We can do all of our investments by asking those in the top 1 and 2 percent to pay more into the system,” Shalanda Young, the director of the White House budget office, told reporters.

The president has already begun trying to portray Mr. Trump as the opposite: a supporter of further tax cuts for the well-off. “Do you really think the wealthy and big corporations need another $2 trillion tax break?” Mr. Biden asked in New Hampshire, referencing Mr. Trump — but not by name. “Because that’s what he wants to do.”

Speaker Mike Johnson and other members of House Republican leadership criticized Mr. Biden in a statement released Monday afternoon. “The price tag of President Biden’s proposed budget is yet another glaring reminder of this administration’s insatiable appetite for reckless spending and the Democrats’ disregard for fiscal responsibility,” they said.

Polls have found that Americans are dissatisfied with Mr. Biden’s handling of the economy and favor Mr. Trump’s approach to economic issues. But the president has been unwavering in his core economic policy strategy, and the budget shows that he is not deviating from that plan.

Mr. Biden’s budget proposes about $3 trillion in new measures to reduce the federal deficit over the next decade. That is in line with his budget proposal last year , which narrowed deficits by raising taxes on businesses and the rich and by allowing the government to bargain more aggressively with pharmaceutical companies to reduce spending on prescription drugs.

The budget again calls for raising the corporate tax rate to 28 percent from 21 percent, the level Mr. Trump set in the tax bill he signed in late 2017 . It increases a new minimum tax on large corporations and quadruples a tax on stock buybacks, among other efforts to raise more revenue from companies and individuals who make more than $400,000 a year.

Those savings would build on discretionary spending limits that Mr. Biden and congressional Republicans agreed on last year to resolve a standoff over raising the nation’s borrowing limit. They still would leave the nation with historically high budget deficits: about $1.6 trillion a year on average over the next decade, by administration forecasts. As a share of the economy, deficits would decline in that time — but total government debt as a share of the economy would tick upward.

House Republicans released a budget last week that seeks to reduce deficits much faster — balancing the budget by the end of the decade. Their savings relied on economic growth forecasts that are well above mainstream forecasters’ expectations, along with steep and often unspecified spending cuts.

The nonpartisan Committee for a Responsible Federal Budget called the Republican plan “unrealistic in its assumptions and outcomes.” On Monday, the group called Mr. Biden’s proposed deficit reduction “a welcome start, but a too timid one.”

Mr. Biden and his aides have repeatedly said they believed the projected deficits in his budgets would not hurt the economy. Ms. Young and Jared Bernstein, who leads the White House Council of Economic Advisers, repeated that position on Monday, even after acknowledging that the budget now forecasts higher government borrowing costs over the next decade than previous budgets have.

Instead of turning toward more aggressive deficit reduction, as prior Democratic presidents have done after losing control of a chamber of Congress, Mr. Biden has leaned into the need for new spending programs and targeted tax incentives to bolster growth and the middle class.

The new proposal continues that trend. It would create a national program of paid leave for workers. It would reinstate an expanded child tax credit that Mr. Biden created temporarily in his $1.9 trillion economic stimulus law in 2021. That credit helped reduce child poverty significantly over the span of a year before expiring. That reinstatement would last for only a year, but administration officials said Monday that they hope to make it permanent as part of a broader debate on taxes in 2025.

The budget also includes new efforts to help Americans struggling with high costs. That issue has dogged Mr. Biden with voters since inflation soared on his watch to its highest levels in four decades , even as price increases have cooled over the past year. Mr. Biden previewed many of those efforts in his State of the Union speech last week, including new tax credits for certain home buyers and expanded assistance for people to buy health insurance through the Affordable Care Act.

Mr. Biden also called for new efforts to improve the solvency of Social Security and Medicare. In the budget, he opposed benefit cuts for the programs and any additional contributions from workers earning less than $400,000 a year.

On Monday, Ms. Young implied that Mr. Biden would look to shore up Social Security in part by targeting a cap on income subject to the payroll taxes that feed the program — a move he has specifically endorsed for Medicare. She said Mr. Biden would improve its solvency “by asking high-income Americans to pay their fair share. If you make a million dollars in this country, you are done paying your Social Security taxes sometime in February.”

In another key area, Mr. Biden’s proposal punts on key details: what to do about the provisions of the 2017 Republican tax law, including tax cuts for individuals, that expire in 2025. The budget calls that expiration, which was written into the law in order to hold down its estimated cost, “fiscally reckless.” But it does not specify how Mr. Biden would handle the expirations if he wins a second term.

Instead, the budget says Mr. Biden would seek to extend tax breaks for people earning less than $400,000 a year, offset with “additional reforms to ensure that wealthy people and big corporations pay their fair share.”

Jim Tankersley writes about economic policy at the White House and how it affects the country and the world. He has covered the topic for more than a dozen years in Washington, with a focus on the middle class. More about Jim Tankersley

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4 Actions Start-Up Founders Need to Take (But Often Overlook) to Protect Their Business Here are four key actions that early-stage founders need to take to reduce the potential for catastrophic antitrust violations down the road

By Kalon Gutierrez • Mar 29, 2024

Key Takeaways

1. determine your core competitive advantage, 2. highlight how your competitive advantage helps customers, 3. execute a plan to overcome the market leader, 4. determine the social benefit associated with success.

Opinions expressed by Entrepreneur contributors are their own.

Antitrust can be defined as "a kind of law or rule that protects fairness and competition in business." On a company basis, issues concerning antitrust are often brought to the forefront during one-off events, such as a merger, acquisition or public offering. However, violations can also occur over a period of time as a pattern of ongoing behavior.

To an early-stage start-up, the subject of antitrust may seem like a far-off topic. The notion of preparing for a legal acquisition or not unfairly infringing upon your competition can appear to be ages away, especially as immediate issues like fundraising, market launch and cash burn take precedence. Survival-related endeavors are naturally prioritized.

Yet, the reality is that ignoring antitrust efforts at the start can prove detrimental to growth companies down the road when the stakes are much bigger. And in fact, overlooked antitrust issues often reveal critical gaps in the business plan itself. Future violations have been rooted in decisions that were made (or not made) early on and continued over a period of time. When they do come to the forefront, their preventable consequences can exponentially limit a company's ultimate success.

Related: The Legal Lowdown of Starting a New Business: A Startup Lawyer Explains

While early-stage companies remain capacity-challenged, there are critical and manageable practices that can be undertaken in order to reduce the potential for catastrophic violations down the road. There are four key actions that early-stage founders need to take to address antitrust that both help refine a company's goals and vision while also establishing often overlooked guardrails that protect the business long-term. To illustrate more directly, let's use a case study of an entrepreneur who has built a company that creates and sells "self-cooking hotdogs":

Imagine an entrepreneur invented a hot dog that perfectly cooked itself at the precise time the customer wants to eat it. No grill or cooking equipment is required; rather, just one push of the button and three minutes later, it is perfectly cooked. Here are the steps this entrepreneur should consider regarding antitrust:

This is something that your company can do that very few (or no one else) can easily replicate. For the hot dog entrepreneur, this would be the technology associated with the self-cooking capability, for which the entrepreneur should consider applying for intellectual property (e.g., a patent) before it is in market. Any attempt by an existing hot dog maker to replicate this technology would either prove difficult or could cannibalize their existing "regular hot dog" sales.

In antitrust, competitive advantages that result in consumer benefits (e.g., price, convenience, quality) are favored and encouraged by the law. On the other hand, competitive advantages that give a business a leg up over competitors but either do not help or harm consumers are where problems can arise. For our hot dog entrepreneur, the core innovation saves consumers' time, money (on power), and potentially the embarrassment of not knowing how to cook a hot dog. Clearly and consistently articulating these benefits across all aspects of branding can help the entrepreneur on both business/marketing and antitrust fronts.

One of the most common pitfalls for startups is that the current leader in their respective space has a reputational or other sustainable advantage that it has built up over time that prevents the entrepreneur from gaining significant traction. For example, customers may be prone to the "if it isn't broken, don't fix it" analogy. For our innovative hot dog, a primary constraint may be that the cooking process itself provides enjoyment for customers, or there is a natural skepticism to buying a new product to eat from a company that no one has heard of before. To overcome these barriers, the hot dog entrepreneur may need to do a "blind taste test" campaign or perhaps partner with another company that is known to offer products used for BBQing. Over time, once the new product gains more mainstream acceptance, it will be easier to gain market share (and perhaps funding) at a rapid pace.

Related: 8 Legal Requirements When You Start A Business

As a larger proportion of the consuming public is associated with younger generations, a common success tactic has been to convey that your company is not just out to make a buck but rather to improve a global societal issue. The hot dog entrepreneur may focus on the fact that its innovation will reduce expensive and/or harmful forms of heating energy. Or food products can be donated to needy populations who do not have access to heating mechanisms.

A focus on antitrust advances all of these efforts, and when successfully implemented, they provide natural and compelling defenses to future issues. Addressing them early on not only guards against future risk, but also better defines a company's competitive advantage today, thereby positioning it more strongly for both short-term and long-term success. While guised as a risk-averted practice, addressing antitrust can actually prove to be a key determinant to paving the roadmap for successful and lasting company growth.

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These Are the Five Attributes of Highly Successful and Happy People

If you'd like to be happier or more successful this year, then ask yourself if you're truly exuding these five attributes. The happiest and most successful people I know execute on these game-changers exceptionally well.

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A rip current statement in effect for Coastal Volusia Region

Pennsylvania train crash highlights shortcomings of automated railroad braking system.

Associated Press

FILE - This photo provided by Nancy Run Fire Company shows a train derailment along a riverbank in Saucon Township, Pa., March 2, 2024. The collision highlights the shortcomings of the automated braking system that was created to prevent such crashes. None of the circumstances the National Transportation Safety Board described Tuesday, March 26, in its preliminary report on the derailment would have triggered the automated positive train control system to stop the trains. (Nancy Run Fire Company via AP, File)

The collision of three Norfolk Southern trains in Pennsylvania early this month highlights the shortcomings of the automated braking system that was created to prevent such crashes.

None of the circumstances the National Transportation Safety Board described Tuesday in its preliminary report on the March 2 derailment would have triggered the automated positive train control system to stop the trains.

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Not only was the system incapable of stopping the second train before it smashed into the back of a stopped train, but it also couldn't stop the third train. It ran into the derailed cars blockings its track when it arrived less than a minute later.

“PTC today has not generally been designed to protect them in that situation,” railroad safety expert Chris Barkan said.

Congress required railroads to develop the positive train control system after a deadly 2008 collision between a Metrolink commuter train and a Union Pacific freight train in Chatsworth, California. That crash killed 25 people, including the Metrolink engineer, and injured more than 100. It took more than a decade and roughly $15 billion for the railroads to design and complete the system, but it only works in certain circumstances.

In this Pennsylvania crash, the eastbound train that smashed into a stopped train in Lower Saucon Township along the Lehigh River had slowed to 13 mph (21 kph) after passing a restricted speed signal. But without a stop signal, the braking system would not have been triggered.

The three railcars that derailed after that first collision blocked the adjacent track, and the third train smashed into them at about 22 mph (35 kph). The braking system relies on information from the railroad's signals to stop a train, and it can't detect when something is blocking the tracks. But given that the third train arrived less than a minute later, there wouldn't have been enough time to stop it anyway.

Six railcars, including three carrying ethanol and butane residue, derailed along with two locomotives on the third train, sending the locomotives into the river. No hazardous materials spilled other than the diesel that leaked from the locomotives into the river. The seven crew members aboard the three trains had minor injuries.

Norfolk Southern estimated that the crashes caused $2.5 million damage, but the Atlanta-based railroad declined to comment on the NTSB's preliminary report. The final report that will detail the cause won't be completed for more than a year.

NTSB spokesman Keith Holloway said preliminary information “suggests that PTC limitations were involved in the accident” and no mechanical problems have been found at this early stage.

The NTSB said its investigation will focus on the railroad’s rules, procedures and training. Norfolk Southern's safety practices have been in the spotlight since one of its trains derailed in East Palestine, Ohio, in February 2023. That train released hazardous chemicals and caught fire in a derailment that prompted calls for changes in the industry that have largely stalled .

Federal regulations require crews operating a train in restricted speed areas to slow down enough that they will be able to stop within half the distance they can see. The NTSB said a light rain was falling at the time of the crash, but it didn't say whether that impeded what the engineer and conductor could see. The report also didn't say whether there were any curves or hills that made it hard for the crew to see the stopped train.

Barkan, who leads the Rail Transportation and Engineering Center at the University of Illinois at Urbana-Champaign, said a large number of collisions have occurred because crews failed to properly observe restricted speed.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

General Electric's Final Act, March Payrolls, Stock Market Highlights: Investing Action Plan

T he stock market wrapped up the first quarter with the Dow ahead 5.6% for the quarter and the Nasdaq up 9.1%. The S&P 500 rallied 10.2% in its best first-quarter performance since 2019. For the Nasdaq, it was not near last year's 16.8% Q1 rally. The Dow's  advance narrowly topped its 3.8% first quarter gain from last year. Howard Silverblatt, analyst with S&P Global, reports that the S&P 500 set record closing highs on 22 of this year's 61 trading days through Thursday.

Please watch the video at Investors.com - Should I Invest My Tax Refund?

General Electric shares ran up nearly 38% in the first quarter ahead of its long-awaited final act as a diversified company on Tuesday. March payrolls and other jobs data during the coming week will be closely watched by all concerned with the Fed's interest rate strategy. And a handful of fast-moving names report, including PVH and Kura Sushi, as the fourth-quarter earnings season ebbs toward its finish.

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With tech leaders pausing, a number of other stocks are stepping up, including On Holding, Medpace, Uber Technologies, M/I Homes and Axon Enterprise. On Holding is taunting a cup-with-handle buy point following some wild post-earnings swings. M/I Homes flashed some early buy signals and is climbing toward a traditional cup-base entry. Medpace, Uber and Axon are consolidating tightly following strong earnings moves. Medpace is holding tight to its 21-day exponential moving average. Uber dipped below its 21-day to bounce off its 50-day moving average. Axon is trading above its 21-day level, with no clear pattern emerging.

Stock Market Econ: Job Strength Vs. Rate Cuts

As long as the labor market appears solid, the Federal Reserve will need to see clearer progress on inflation before cutting rates, and the stock market receives a hefty serving of jobs data in the coming week. The monthly employment report, out Friday, is expected to show that employers added 180,000 payroll positions in March, including 157,500 in the private sector, according to FactSet's consensus estimate.

The jobless rate is seen dipping to 3.8%, while 12-month wage growth is expected to ease to 4.1% from 4.3%. The Job Openings and Labor Turnover Survey for February is out Tuesday. Wall Street sees job openings slipping to 8.7 million from 8.86 million. The ADP employment report is out Wednesday. The estimate of private hiring from the payroll processing giant is expected to show 150,000 new jobs.

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GE Final Transformation Set

General Electric will split in two on Tuesday. GE Aerospace will keep the GE stock ticker on the stock market. GE Vernova, a gas power and wind energy business, actually went public on Thursday as GEV. It is trading on a when-issued basis and therefore probably not active until Tuesday. GE will remain on the S&P 500 index, while GE Vernova will join it. The first portion of the division, GE HealthCare Technologies, debuted in January 2023. In the past year, GE stock has soared almost 89%. It's a remarkable turnaround for a stock that collapsed in 2017-18 amid fears of a possible bankruptcy. The company then underwent an extensive reorganization under the leadership of CEO Larry Culp, who took the reins in October 2018. GEHC stock has risen 18% in the past 12 months, vs. a 32% gain for the S&P 500 index.

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Late Earnings-Season Hot Tickets Report

As the stock market's first quarter ends, the December-January quarter's earnings season slows to a crawl. But there remain a few important names to watch in the coming week. Apparel brands PVH and Levi Strauss have shown strong stock action this year. Payroll servicer Paychex is sticking close to support in a three-month base. And Kura Sushi is rebounding, up 54% this year.

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• UK/EU ESG Regulation Round-Up – Q1 2024

Our latest ESG regulatory round-up highlights the key UK, EU and international financial services regulatory developments during Q1 2024.  Key ESG developments this quarter include the publication of the FCA’s Business Plan for 2024/2025 setting out the FCA’s ESG priorities, the Transition Finance Market Review call for evidence and the latest position on the EU CSDDD.  

UK/EU/International ESG priorities for 2024/2025

Uk fca business plan 2024/25 sets out key esg priorities.

The FCA Business Plan 2024/25 published on 19 March 2024 sets out the key UK ESG priorities during 2024/2025.  The FCA is supporting the financial sector in driving positive change, including the transition to net zero and the consideration of wider sustainability issues. 

Ongoing work in 2024/25 will involve the following:

Integrating the sustainability disclosure requirements (SDR) and investment labels across the market, including the anti-greenwashing rule and guidance. For an overview of the FCA's SDR and investment labelling regime, see this Engage article .

Continuing to expand the SDR regime, starting with a consultation on portfolio management in 2024.

Continuing to engage on new and emerging risks with UK and international partners. It will be progressing its work on transition finance and preparing to have regard to a "nature" regulatory principle coming into force.

Read more about the FCA Business Plan in our Engage article here .

UK Transition Finance Market Review

On 14 March 2023, a Call for Evidence in relation to the Transition Finance Market Review (TFMR) was published. Responses are due by 25 April 2024 from a wide range of stakeholders, including financial institutions.  The Transition Finance Market Review was launched in January 2024 and will report to the UK government in Summer 2024.  For further details, see our Engage article linked here .

UK House of Commons reports on the financial sector and the UK’s net zero transition

On 23 February 2024, the UK government published its response  to the House of Commons' Environmental Audit Committee's (EAC's) November 2023 report,  ‘The financial sector and the UK's net zero transition’ .  The EAC’s report sets out how the UK financial sector can help achieve net zero greenhouse gas emissions by 2050.  The UK government response sets out its current initiatives as well as additional steps to achieve net zero including:

• Commissioning the Transition Finance Market Review (further details below).
• The UK’s approach to climate transition plans.
• An upcoming FCA consultation on guidance for listed companies’ transition plan disclosures and policy approach to ISSB standards.
• The FCA’s implementation of the Sustainability Disclosure Requirements (SDR) as set out in the 2023 Green Finance Strategy.
• Encouraging UK businesses to engage with the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations.
• Consulting on the UK green taxonomy, the UK carbon border adjustment mechanism and high-integrity voluntary carbon markets.

ECB’s work programme expands climate and nature priorities

On 30 January 2024, the European Central Bank (ECB) published its priorities in relation to climate change and nature loss and degradation which it has decided to expand for the upcoming year. The three focus areas that the ECB has identified are:

• The impact and risks of the transition to a green economy including considering the associated transition costs and investment needs.
• The increasing physical impact of climate change and how measures to adopt to a hotter world affect the economy.
• The risks stemming from nature loss and degradation and how they interact with climate-related risks and how they could affect the ECB’s work.

A comprehensive overview of the planned work programme for 2024 and 2025 is available in the  Annex to the ECB’s programme. 

International

Fsb work programme for 2024.

On 24 January 2024, the Financial Stability Board (FSB) published its work programme for 2024.  One of the key priority areas of work for 2024 includes addressing financial risks from climate change.  The FSB will continue to co-ordinate international work in this area including analysis of the relevance of transition plans for financial stability and a stocktake of regulatory and supervisory initiatives related to the identification and assessment of nature-related financial risks.

UK/EU/US ESG regulatory developments

Csddd compromise text to be adopted by the european parliament.

On 19 March 2024, the European Parliament’s Legal Affairs Committee (JURI) voted in favour of the Corporate Sustainability Due Diligence Directive (CSDDD) after several failed attempts.  The compromise text remains to be formally adopted by the European Parliament at the next plenary meeting on 24 April 2024.  Once formally approved by the European Parliament and Member States the CSDDD will enter into force on the 20 th day following its publication in the Official Journal of the EU.  The first companies affected by the CSDDD could be required to comply with the CSDDD during 2027.

The revised text significantly reduces the companies in scope and extends the timeframe for compliance as the majority of companies will not be required to comply until five years after the CSDDD enters into force.

Particular changes to the original scope include:

Thresholds for determining in scope EU companies and non-EU companies has increased to €450 million net worldwide turnover and an employee threshold of 1,000 employees.  This has reduced the in-scope companies to approximately 5000 companies.

The downstream part of the definition of chain of activities has been limited by deleting references to product disposal.

It will no longer be an obligation for companies above certain thresholds to promote the implementation of a climate change plan through financial incentives.

The Commission will still need to present a report on additional due diligence requirements for the provision of financial services, there will no longer be a need for a joint political statement between the co-legislators on why such requirements are needed.

Read more about the CSDDD here .

ESMA consults on draft ETS for the registration and supervision of external reviewers under the EU Green Bond Regulation

On 26 March 2024, ESMA launched a consultation on draft regulatory technical standards (RTS) relating to the registration and supervision of external reviewers under the EU Green Bond Regulation (EuGB). ESMA will consider all comments received by 14 June 2024. The RTS will aim to clarify the criteria to be used for assessing an application for registration by an external reviewer.  In its proposals, ESMA aims to standardise registration requirements and contribute to developing a level playing field through lower entry costs for applicants.  The consultation will be of interest to future external reviewers of green bonds and sustainable debt and sustainability assurance providers. The EuGB entered into force on 21 December 2023 and will apply from 21 December 2024.  ESMA will consider the feedback received to the consultation and will submit the draft RTS and required implementing technical standards to the European Commission by 21 December 2024. 

EU Environmental Crime Directive

On 26 March 2024, the Council of the EU formally adopted a Directive revising the Environmental Crime Directive (2008/99/EC) by extending the list of environmental offences and introducing stronger sanctions. It will also provide protection for whistleblowers reporting on environmental offences.  The revised Directive also introduces the concept of “qualified offences” which are those committed intentionally causing the destruction of or irreversible or long-lasting damage to the environment.  The EU has also published this infographic setting out how it fights environmental crime. Once the Directive is formalised which is expected during spring 2024, EU member states will have two years to implement it. Environmental crimes should be identified and addressed within the ESG, financial crime and risk frameworks of a financial institution.

CSRD adoption deadline delayed

On 7 February 2024, the European Council and Parliament  agreed  to delay the deadline for the Commission adoption of sector-specific sustainability reporting standards and reporting standards for certain third-country undertakings from 30 June 2024 to 30 June 2026.  The European Sustainability Reporting Standards (ESRS) are being developed by the European Financial Reporting Advisory Group (EFRAG) and underpin the CSRD. The first ESRS were published in the Official Journal of the EU on 22 December 2023 and are sector agnostic. The sector-specific ESRS will cover sectors such as oil and gas and coal and mining.  The delay is intended to give EFRAG further time to develop quality standards.

EU Platform on Sustainable Finance reports on taxonomy and sustainable finance market practices

On 29 January 2024, the EU Platform on Sustainable Finance published a report containing a compendium of market practices, examining how the EU taxonomy and sustainable finance framework are helping financial and non-financial actors transition to net zero.  The report is accompanied by an Annex which contains a stocktake, case studies and analysis of current practice and a factsheet . The report covers seven groups that use the taxonomy, namely corporates, banks, insurers, investors, auditors, small- and medium-sized enterprises, and the public sector. 

UK SDR: FCA industry-led working group for product sustainability claims

On 16 January 2024, the FCA announced that as part of the new UK regime for the SDR and investment labels, it has established an industry-led working group for financial advisers to support the industry in advising consumers on products making claims about sustainability.  The purpose of the group is to improve the trust and transparency of sustainable investment products.  For further information about the SDR see our Engage article linked here .

SEC adopts long-awaited climate reporting rules

On 6 March 2024, the US Securities and Exchange Commission adopted rules to enhance and standardise climate-related disclosures by public companies and in public offerings.  The rules are less burdensome than those proposed by the SEC in 2022, including dropping the proposed requirement to report scope 3 emissions, but will still require a substantially increased level of legal and accounting disclosures.  Further details are set out in this Engage article

UK/EU regulation of ESG ratings providers

Uk spring budget – esg ratings provider confirmation.

The UK Spring Budget 2024 , announced on 6 March 2024, confirmed that ESG ratings providers will be brought within the regulatory perimeter of the FCA where they assess ESG factors for the purposes of investment decisions and to influence capital allocation.  This is following a HM Treasury consultation that ran from 30 March 2023 to 30 June 2023.  In the holding response, the UK government confirmed that a consultation response and a legislative timeline for regulating ESG ratings providers will be published during 2024.  

Council of the EU publishes text of political agreement on proposed Regulation on ESG rating activities

On 14 February 2024, the Council of the EU published a compromise text (dated 9 February 2024) on the proposed Regulation on the transparency and integrity of environmental, social and governance (ESG) rating activities (2023/0177(COD)).

The text reflects the outcome of the provisional political agreement reached by the Council with the European Parliament on 5 February 2024. The provisional political agreement is subject to approval by the Council and the Parliament before going through the formal adoption procedure.

For further information about ESG ratings and data products providers see our Engage article here .

Additional ESG regulatory updates

Uk sexism in the city treasury committee report.

On 8 March 2024, the UK Treasury Select Committee released its Sexism in the City Report examining barriers faced by women in financial services and the progress made towards removing gender pay gaps.  The findings suggest that prevalent sexual harassment and bullying remains in financial services.  Incremental improvements have been made in the proportion of women holding senior roles but some sectors such as venture capital, private equity and hedge funds have only achieved a small reduction in the average gender pay gap.  The Treasury Select Committee stressed that diversity and inclusion should be seen as a moral imperative and a competitive advantage rather than a tick-box exercise.  The report makes several recommendations to increase the pace of change towards a diverse and inclusive financial services sector where the widest range of people can prosper and thrive.

Fiduciary duties in the context of sustainability and climate change policies

On 6 February 2024,  the UK Financial Markets Law Committee (FMLC) published a paper which examines the fiduciary duty for pension funds and the existing uncertainties in the context of sustainability and climate change policies. The paper offers a useful guide for financial market participants in addition to pension funds as it clarifies the importance of climate change and sustainability as “financial” factors when considering fiduciary duties because ultimately they “may reduce risk or improve return”.

In a related update, in March 2024, Shivji KC & Stubbs KC et al issued an opinion which confirms that company directors have a duty to consider their company’s exposure to nature-related risks.  This is in addition to the recent George Bompas KC legal opinion on the requirements of a company to present a true and fair view of the company’s position and FMLC paper to clarify legal position on the fiduciary duty of trustees.

UNEP FI updates guidelines for climate target setting for banks: March 2024

On 13 March 2024, the United Nations Environment Programme Finance Initiative (UNEP FI) issued an updated version of its guidelines for climate target setting for banks.

The new version (version two) extends the scope of targets to include banks' capital markets activities. The UNEP FI points out that capital markets arranging and underwriting services provided in the issuance of new debt and equity instruments are for some banks their largest source of attributable greenhouse gas emissions.

The amendments also add, update and clarify technical language to reflect the evolution of practices, methodologies and data availability since the guidelines were first published in April 2021.  The guidelines are scheduled to be reviewed every three years by the Net-zero Banking Alliance (NZBA) who develop the guidelines and to whom they apply.

We closely monitor all aspects of ESG and sustainable finance regulatory developments so please get in touch with the Hogan Lovells contacts listed in this article if you would like to discuss any of the topics above or your wider ESG requirements. 

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WEATHER ALERT

A river flood warning in effect for Brantley County

Closed bridges highlight years of neglect, backlog of repairs awaiting funding.

David A. Lieb, Michael Casey, Jeff Mcmurray And Christopher Keller

Associated Press

Copyright 2024 The Associated Press. All rights reserved.

The Fishing Wars Memorial Bridge, which has been closed indefinitely since October 2023 after the Federal Highway Administration raised safety concerns, is shown Tuesday, March 26, 2024, in Tacoma, Wash. Nearby business owners say they have noticed a decrease in customers as traffic has slowed on their street due to the closure. (AP Photo/Lindsey Wasson)

After a yearlong closure, a bridge over the Puyallup River reopened in 2019 with a sturdy new span and a brand new name. It even won a national award.

But today, the Fishing Wars Memorial Bridge is closed again after federal officials raised concerns about a vintage section of the nearly century-old bridge that carried about 15,000 vehicles a day. It has no timetable to reopen because the city of Tacoma, Washington, first must raise millions of dollars to clean and inspect it.

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“It’s frustrating — and hard to comprehend how we got here,” said Ed Wallace, whose Harley-Davidson motorcycle store has lost customers since the nearby bridge was shuttered.

Bridges fulfill a vital function that often goes overlooked until lives are lost or disrupted by a closure or collapse, like that of the Francis Scott Key Bridge in Baltimore early Tuesday. That bridge crumpled when struck by a cargo ship , not because of poor maintenance. But thousands of others stand in worse shape.

About 42,400 U.S. bridges are in poor condition, yet they carry about 167 million vehicles each day, according to the federal government. Four-fifths of them have problems with the legs holding them up or the arms supporting their load. And more than 15,800 of those bridges also were in poor shape a decade ago, according to an Associated Press analysis.

One of those persistently poor bridges — carrying about 96,000 westbound vehicles daily on Interstate 195 over the Seekonk River in Rhode Island — was suddenly shut to traffic late last year, resulting in long delays as drivers diverted to new routes. In March, the governor announced that the bridge must be demolished and replaced. That could cost up to $300 million and take at least two years to complete.

These closures illustrate a nationwide issue.

“We have not maintained our infrastructure at the rate that we should for many, many years, and now we’re trying to play catch-up,” said Marsia Geldert-Murphey, president of the American Society of Civil Engineers.

When an old bridge gets closed because of safety concerns, it disrupts daily commutes, business supply chains and emergency response times by police, firefighters and medical personnel. Yet many bridges still await replacement or repairs because the costs can reach millions or even billions of dollars.

A FUNDING INFUSION

A massive infrastructure law signed by President Joe Biden in 2021 directed $40 billion to bridges over five years — the largest dedicated bridge investment since construction of the interstate highway system, which began nearly 70 years ago.

Transportation Secretary Pete Buttigieg said that law already is funding over 7,800 bridge projects. One of the most notable is a $3.6 billion project in Cincinnati to build a long-awaited new bridge carrying traffic on Interstates 71 and 75 over the Ohio River at the Kentucky border.

But funding from the infrastructure law will make only a dent in an estimated $319 billion of needed bridge repairs nationwide, according to the American Road & Transportation Builders Association.

“The bottom line is that America’s bridges need a lot of work,” Buttigieg told the AP after visiting the closed Rhode Island bridge. He added: “The sooner we can address those significant bridges, the less likely they will be abruptly taken out of service, or worse, experience the risk of a collapse.”

Inspectors rate bridges using a 0-9 scale, with 7 or above considered "good." A “poor” rating reflects a 4 or below. A mid-range rating is considered “fair.” The nation’s poor bridges are on average 70 years old.

Even before the federal funding infusion, the number of bridges in poor condition declined 22% over the past decade as structures were repaired, replaced or permanently closed, according to the AP's analysis. But in recent years, more bridges also slipped from good to fair condition.

COLLAPSING BRIDGES

Though potholes on bridges can jar cars, many of the most concerning problems are below the surface. Chipping concrete and rusting steel can weaken the piers and beams that keep a bridge upright. When the condition of substructures or superstructures deteriorates too much, a bridge typically is closed out of public safety concerns.

Though rare, bad bridges can eventually collapse.

Design flaws contributed to the evening rush hour collapse of an Interstate 35 bridge over the Mississippi River in Minneapolis in 2007. The collapse killed 13 people and injured 145 others. It also was costly financially. A state analysis estimated Minnesota’s economy lost $60 million in 2007-2008 due to increased travel time and operating costs for commuters and businesses.

In January 2022, a bridge carrying a bus and several cars collapsed over Fern Hollow Creek in Pittsburgh, causing injuries but no deaths. Federal investigators determined the steel legs had corroded to the point of having visible holes, yet inspectors failed to calculate the severity of the problem and the city failed to follow repeated recommendations.

“This bridge didn’t collapse just by an act of God. It collapsed because of a lack of maintenance and repair,” National Transportation Safety Board member Michael Graham said.

FINANCIAL CHALLENGES

Iowa has the most poor bridges, followed by Pennsylvania, Illinois and Missouri. The twin Burlington Street bridges in Iowa City, Iowa, exemplify the financial challenges facing old bridges. The state owns the southbound span carrying vehicles over the Iowa River while the city owns the northbound span of what's also known as state Highway 1.

The city’s part, constructed in 1915, was rated in poor condition in the 2023 and 2013 National Bridge Inventory. Inspection reports show numerous cracks and structural deficiencies in the concrete bridge. The state’s side, built in 1968, is in much better condition.

Although the federal infrastructure law provided a grant to analyze the bridges, the split ownership has made it difficult to fund the more than $30 million estimated cost of a replacement.

“It’s not something we can just fund in a year and say: ‘Here we go, let’s do it quick,’” said city engineer Jason Havel. “It takes years of planning, years of working through dedicated funding.”

ECONOMIC EFFECTS

In Rhode Island, problems had been mounting for the I-195 Washington Bridge connecting Providence to East Providence. It closed after an engineer in December noticed the failure of multiple steel tie rods in concrete beams at two piers. A subsequent examination found widespread structural problems.

Joseph McHugh, an engineer with 40 years of experience in bridge and road construction, reviewed a draft engineering report compiled after the bridge's closure along with inspection reports from July 2022 and July 2023.

“This failure didn’t occur overnight,” McHugh told the AP. “To me, it should have been caught by an inspection, not by a contractor or whomever was looking at what was going on.”

The U.S. Department of Justice is investigating allegations that false payment claims for the bridge's construction, inspection or repair were submitted to the federal government.

Marco Pacheco, who owns a liquor store along a main road in a Portuguese neighborhood of East Providence, said he believes “mismanagement,” “negligence” and “incompetence” caused the closure. His business revenue is down 20% since the bridge closed. But he's even more concerned about the long-term consequences.

“That traffic doesn’t instantly come back. Folks have reshaped their patterns, their thought processes and so on,” Pacheco said.

Business owners in Washington share similar concerns about the indefinite closure of the Fishing Wars Memorial Bridge, in an industrial area near the Port of Tacoma. Several years ago, the city spent $42 million to replace a span leading up to the river. But the bridge was abruptly closed again last October after the Federal Highway Administration raised concerns that debris had prevented the inspection of potentially corroded steel connection points.

To clean and inspect the bridge, the city first must encapsulate it to protect debris from falling into the river. But the city lacks the more than $6 million needed for the project. It also has no means of paying for a potential $280 million replacement.

A nearby Interstate 5 bridge provides a good alternative but that means many motorists zoom right past an exit ramp without thinking about the Harley-Davidson store or other nearby businesses. At least one shop already has closed.

Wallace, the Harley-Davidson store owner, wishes the city could re-open the bridge, at least temporarily.

“Is there a peril that exists?” Wallace asks rhetorically. "Yeah, absolutely, a very serious one for me as a business owner.”

Associated Press data reporter Kavish Harjai contributed. Harjai is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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