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What is strategic planning? 5 steps and processes
A strategic plan helps you define and share the direction your company will take in the next three to five years. It includes your company’s vision and mission statements, goals, and the actions you’ll take to achieve those goals. In this article we describe how a strategic plan compares to other project and business tools, plus four steps to create a successful strategic plan for your company.
Strategic planning is when business leaders map out their vision for the organization’s growth and how they’re going to get there. Strategic plans inform your organization’s decisions, growth, and goals. So if you work for a small company or startup, you could likely benefit from creating a strategic plan. When you have a clear sense of where your organization is going, you’re able to ensure your teams are working on projects that make the most impact.
The strategic planning process doesn’t just help you identify where you need to go—during the process, you’ll also create a document you can share with employees and stakeholders so they stay informed. In this article, we’ll walk you through how to get started developing a strategic plan.
What is a strategic plan?
A strategic plan is a tool to define your organization’s goals and what actions you will take to achieve them. Typically, a strategic plan will include your company’s vision and mission statements, your long-term goals (as well as short-term, yearly objectives), and an action plan of the steps you’re going to take to move in the right direction.
Your strategic plan document should include:
Your company’s mission statement
Your company’s goals
A plan of action to achieve those goals
Your approach to achieving your goals
The tactics you’ll use to meet your goals
An effective strategic plan can give your organization clarity and focus. This level of clarity isn’t always a given—according to our research, only 16% of knowledge workers say their company is effective at setting and communicating company goals. By investing time into strategy formulation, you can build out a three- to five-year vision for the future of your company. This strategy will then inform your yearly and quarterly company goals.
Do I need a strategic plan?
A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics. Here’s how a strategic plan compares to other project management and business tools.
Strategic plan vs. business plan
A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.
You should create a business plan when you’re:
Just starting your business
Significantly restructuring your business
If your business is already established, consider creating a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.
Key takeaway: A business plan works for new businesses or large organizational overhauls. Strategic plans are better for established businesses.
Strategic plan vs. mission and vision statements
Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.
As a result, you should already have your mission and vision statements drafted before you create a strategic plan. Ideally, this is something you created during the business planning phase or shortly after your company started. If you don’t have a mission or vision statement, take some time to create those now. A mission statement states your company’s purpose and it addresses what problem your organization is trying to solve. A vision statement states, in very broad strokes, how you’re going to get there.
A mission statement summarizes your company’s purpose
A vision statement broadly explains how you’ll reach your company’s purpose
A strategic plan should include your mission and vision statements, but it should also be more specific than that. Your mission and vision statements could, theoretically, remain the same throughout your company’s entire lifespan. A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction.
For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:
Mission statement: “To ensure the safety of the world’s animals.”
Vision statement: “To create pet safety and tracking products that are effortless to use.”
Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners.
Key takeaway: A strategic plan draws inspiration from your mission and vision statements.
Strategic plan vs. company objectives
Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time.
Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.
Key takeaway: Company objectives are broad, evergreen goals, while a strategic plan is a specific plan of action.
Strategic plan vs. business case
A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business.
You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.
Key takeaway: A business case tackles one initiative or investment, while a strategic plan maps out years of overall growth for your company.
Strategic plan vs. project plan
A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan.
A project plan has seven parts:
Stakeholders and roles
Scope and budget
Milestones and deliverables
Timeline and schedule
Key takeaway: You may build project plans to map out parts of your strategic plan.
When should I create a strategic plan?
You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed. That being said, if your organization moves quickly, consider creating one every two to three years instead. Small businesses may need to create strategic plans more often, as their needs change.
Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets.
What are the 5 steps in strategic planning?
The strategic planning process should be run by a small team of key stakeholders who will be in charge of building your strategic plan.
Your group of strategic planners, sometimes called the management committee, should be a small team of five to 10 key stakeholders and decision-makers for the company. They won’t be the only people involved—but they will be the people driving the work.
Once you’ve established your management committee, you can get to work on the strategic planning process.
Step 1: Determine where you are
Before you can get started with strategy development and define where you’re going, you first need to define where you are. To do this, your management committee should collect a variety of information from additional stakeholders—like employees and customers. In particular, plan to gather:
Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future
Customer insights to understand what your customers want from your company—like product improvements or additional services
Employee feedback that needs to be addressed—whether in the product, business practices, or company culture
A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process).
To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:
What does your organization currently do well?
What separates you from your competitors?
What are your most valuable internal resources?
What tangible assets do you have?
What is your biggest strength?
What does your organization do poorly?
What do you currently lack (whether that’s a product, resource, or process)?
What do your competitors do better than you?
What, if any, limitations are holding your organization back?
What processes or products need improvement?
What opportunities does your organization have?
How can you leverage your unique company strengths?
Are there any trends that you can take advantage of?
How can you capitalize on marketing or press opportunities?
Is there an emerging need for your product or service?
What emerging competitors should you keep an eye on?
Are there any weaknesses that expose your organization to risk?
Have you or could you experience negative press that could reduce market share?
Is there a chance of changing customer attitudes towards your company?
Step 2: Identify your goals and objectives
This is where the magic happens. To develop your strategy, take into account your current position, which is where you are now. Then, draw inspiration from your original business documents—these are your final destination.
To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” This can help you figure out exactly which path you need to take.
During this phase of the planning process, take inspiration from important company documents to ensure your strategic plan is moving your company in the right direction like:
Your mission statement, to understand how you can continue moving towards your organization’s core purpose
Your vision statement, to clarify how your strategic plan fits into your long-term vision
Your company values, to guide you towards what matters most towards your company
Your competitive advantages, to understand what unique benefit you offer to the market
Your long-term goals, to track where you want to be in five or 10 years
Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in
Step 3: Develop your plan
Now that you understand where you are and where you want to go, it’s time to put pen to paper. Your plan will take your position and strategy into account to define your organization-wide plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your strategic plan should be created as the quarters and years go on.
As you build your strategic plan, you should define:
Your company priorities for the next three to five years, based on your SWOT analysis and strategy.
Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals .
Related key results and KPIs for that first year. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable.
Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.
A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.
Step 4: Execute your plan
After all that buildup, it’s time to put your plan into action. New strategy execution involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success.
Map your processes with key performance indicators, which will gauge the success of your plan. KPIs will establish which parts of your plan you want achieved in what time frame.
A few tips to make sure your plan will be executed without a hitch:
Align tasks with job descriptions to make sure people are equipped to get their jobs done
Communicate clearly to your entire organization throughout the implementation process
Fully commit to your plan
Step 5: Revise and restructure as needed
At this point, you should have created and implemented your new strategic framework. The final step of the planning process is to monitor and manage your plan.
Share your strategic plan —this isn’t a document to hide away. Make sure your team (especially senior leadership) has access to it so they can understand how their work contributes to company priorities and your overall strategic plan. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management tool .
Update your plan regularly (quarterly and annually). Make sure you’re using your strategic plan to inform your shorter-term goals. Your strategic plan also isn’t set in stone. You’ll likely need to update the plan if your company decides to change directions or make new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan to ensure you’re building your organization in the best direction possible for the next few years.
Keep in mind that your plan won’t last forever—even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.
The benefits of strategic planning
Strategic planning can help with goal-setting by allowing you to explain how your company will move towards your mission and vision statements in the next three to five years. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).
When you create and share a clear strategic plan with your team, you can:
Align everyone around a shared purpose
Proactively set objectives to help you get where you want to go
Define long-term goals, and then set shorter-term goals to support them
Assess your current situation and any opportunities—or threats
Help your business be more durable because you’re thinking long-term
Increase motivation and engagement
Sticking to the strategic plan
To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done.
With clear priorities, team members can focus on the initiatives that are making the biggest impact for the company—and they’ll likely be more engaged while doing so.
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How To Write A Business Plan (2023 Guide)
Updated: Aug 20, 2022, 2:21am
Table of Contents
Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.
Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.
Drafting the Summary
An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.
Ask for Help
When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.
After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business.
The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.
Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.
Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.
Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.
Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.
The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.
If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.
This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.
You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.
Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.
Business Operations Costs
Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.
Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.
Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.
Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.
How do I write a simple business plan?
When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.
What are some common mistakes in a business plan?
The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.
What basic items should be included in a business plan?
When writing out a business plan, you want to make sure that you cover everything related to your concept for the business, an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.
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Julia is a writer in New York and started covering tech and business during the pandemic. She also covers books and the publishing industry.
Kelly is an SMB Editor specializing in starting and marketing new ventures. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Additionally, she manages a column at Inc. Magazine.
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Think it Through: The First 3 Steps to Business Planning
The following is adapted from “ Think it Thru: Business Planning,” available at select bookstores and on Amazon. The book has a corresponding Learning Management System (LMS) with additional tools and resources. “Think it Thru” proceeds go toward funding assistance for small businesses.
The first step to becoming an entrepreneur is realizing how much you do not know. The second step is realizing how much you need to know.
Planning is a vital step in the journey to creating a new business venture. You think through the pros and cons. You consider the enormity of the effort. You think about your resources, such as time, money and expertise.
You ask yourself:
“Do I have the time to dedicate to starting a new business? Do I have the financial wherewithal to fund the enterprise? Do I have the expertise or skills to support this initiative?”
These are all good questions to pose before taking on a new business venture.
With any startup, questions are best answered through the more formal process of business planning. This effort forces you to focus on finding answers in a constructive manner. It makes you face your fears, think through your dreams, and ponder the what-if scenarios.
A business plan can seem like a daunting task that can easily be overwhelming. The goal is to break it down into small, easy to consume steps that you can then walk through.
Related: How to Write a Business Plan: Tips from the Experts
Let us roll up our sleeves and discuss the elements of building a business plan:
The crucial steps to business planning
- Create a vision for your business
- Research the industry
- Identify your customer
- Build a market analysis
- Specify the products and services
- Produce a marketing plan
- Generate an operational plan
- Structure the management and organizational teams
- Formulate the startup expenses and capitalization
- Establish a financial plan
- Reflect on all the exercises to craft an executive summary
Here, we’ll break down the first three steps even further:
Creating a vision is an exciting part of the business planning process. Dream big, because you can always scale back. The fundamentals of a vision include mapping out the details of the services, products and environment you plan to offer your customers.
You need to ask yourself what your goals are. Are you starting the business to make money, to achieve a dream, or to offer a product or service not readily available today? Are you fulfilling a personal goal of achievement and self-satisfaction?
Often, you will find that your vision is a mixture of many of these goals.
All businesses belong to a specific industry. Industries evolve over time and have trends that should be explored. It is important to describe your industry, the history, important influences, and current trends that are shaping the industry.
The purpose of this exercise is to gather a general description and basic information that allows us to better understand the industry we are entering.
It’s time to identify your customer more in depth. This customer represents your target market. Having clarity about who your target market is will allow you to properly create and execute targeted marketing efforts.
You should clearly identify the following customer traits:
- Demographics: Age, social status, gender, education
- Lifestyle : Activities, interests, values, needs, opinions
- Location : Proximity and environment (city, suburbs, or country)
- Demand: What is their pain point or what need are you trying to fill?
Describe your customer in detail, not just generalizations.
Ask yourself, who is your target customer? What kind of person are they? It is also very helpful to describe the type of customer you do not want. Try to describe these customers and put yourself in their shoes. Explore their demands and desires that your company can fulfill.
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Business planning is a journey that requires you take several steps in order to get to your destination, and these crucial steps makes sure you follow these phases in a logical sequence on your journey to business ownership.
“ Think it Thru: Business Planning” is available now and can be purchased via StartupNation.com.
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A Strategic Plan for Business Implementation: 3 Steps to Getting Business Growth Done
Let me ask you a question:
What’s the ONE thing your business needs to take the next BIG step in its growth?
Is it more ideas? More knowledge? More information?
You need to have a good system in place to make sure your ideas are being prioritized intelligently and implemented efficiently.
If you’re like most marketers, entrepreneurs, and business owners I know, you already have a whole pile of notes, ideas, and to-do lists still waiting to be implemented.
If anything, you might have TOO MANY ideas. Too many projects.
And the problem is that you need to get better at implementing those projects. Actually getting them DONE.
Am I right?
If your to-do list has 50 growth strategies on it, you certainly don’t need any more growth strategies. No, what you need instead is a method to…
- Decide which project to tackle first, and…
- Actually DO IT in an effective and efficient way
And that’s what this post is all about.
The framework you’re about to learn is the exact same process we use internally at DigitalMarketer to implement our business growth strategies.
It came out of the frustrations we had in our own recent growth…
As a company, DigitalMarketer went from being a small team of two to three people to being a team of over 50 people in a relatively short time.
But here’s the crazy part…
Even though our team ballooned in size by 25x, we didn’t actually get that much more work done!
See, you can’t just throw more money and people at a problem like this and hope that will fix the issue. Because it won’t.
Instead, you need to have a good system in place to make sure your ideas are being prioritized intelligently and implemented efficiently.
So, without further ado, here are the three steps to doing just that—a business growth plan for avoiding “shiny object syndrome” and actually implement a growth plan in your business …
Business Growth Plan Step 1: Align Your Team to a Single Goal
The first step is to align your team to a single goal and AVOID multiple simultaneous projects.
Instead of trying to achieve many different things at once, it’s much better to focus on one goal at a time. And don’t move on to the next goal until you’ve achieved the first one.
Goals should be sequential, never simultaneous.
Sequential goals ensure maximum efficiency because they allow you to put 100% of your focus on that one thing.
Simultaneous goals, on the other hand, are a recipe for chaos and inefficiency. And the more projects you have going at once, the less efficient you will be. Guaranteed.
This applies to your entire team, whether you’re a team of one or part of a much larger department.
One of the big mistakes that many companies make is giving a different goal or project to every employee.
For example: Bob’s project might be trying to grow the email list, while Lois is charged with increasing conversions, and Steve is in charge of trying to cut down on customer refunds.
The problem with a situation like this is that there are dependencies between these projects, and those dependencies can cause a lot of in-fighting between employees.
As a result, nobody is able to do a really great job of achieving their goal and you end up with another quarter of mediocre improvements and stagnant growth across the board.
But what if you could get your whole team—Bob, Lois, and Steve—all focused on the same goal at the same time? This way, there wouldn’t be any competing agendas. Chances are they would do a much better job than any one person could do on their own.
So, why don’t more companies work this way? The answer might surprise you.
The Secret Danger of Good Ideas
For many companies, the thing that’s stopping them from adopting a more efficient, sequential goal structure is too many good ideas.
It might sound strange, but it’s true…
Good ideas have killed far more companies than bad ideas.
It’s rare for a bad idea to bring down a company. Instead, failure is more often caused by trying to implement too many good ideas at once .
This makes sense if you think about it: we’re on the lookout for bad ideas. Anytime we try something that doesn’t work, what do we do? We stop doing it. We pivot. We try something else.
Bad ideas are usually caught and thrown out pretty quickly.
But good ideas?
Good ideas are dangerous.
Anytime we try a tactic that works well…
Anytime we come up with a new campaign that makes a lot of sense…
Anytime we see a competitor doing something that would work for us…
Anytime we come up with a marketing idea that “could be a game-changer”…
We pursue those good ideas.
Eventually, we start chasing too many things—and before you know it we’re knee-deep in “shiny object syndrome.”
This puts you in a tricky situation. Because you don’t want to ignore all those good ideas. But at the same time, you can’t afford to pursue them all at the same time.
So, what should you do?
How to Organize & Prioritize Your Good Ideas
I recommend using this four-step grid to help organize and prioritize your good ideas.
So first, draw out a grid like this on a whiteboard somewhere your whole team can see it:
Each column represents one of the four primary “Growth Levers.” These are the four ways you can grow a company . And the 4 Growth Levers are:
- Acquisition: Getting new leads
- Activation: Converting your existing leads into customers
- Monetization: Increasing the average order value of your existing customers
- Retention: Reducing refunds and churn rate
Then you’ll want to take each good idea and put it into the column where it fits best, like so:
Writing down all your ideas in a central location like this does two important things.
First, it organizes your ideas in a way that makes sense from a growth perspective AND makes it easy to focus and prioritize each idea. This will become crucial in just a moment.
Second, it gets those ideas out of your head and down on paper.
Many of us are walking around with too many ideas floating around in our heads. And trying to keep track of those ideas leads to cognitive overload.
Mentally, it feels like you have too many browser tabs open on your internet browser.
But when you write down your ideas, it’s like closing one of those tabs. It frees up some mental space because you know you don’t have to keep track of that idea in your head any longer.
Choose One Column to Focus On
OK, you now have your ideas all written down and organized according to the 4 Growth Levers.
The next thing you need to do is to choose a column to focus on for a period of time.
Because here’s the thing:
Impact doesn’t happen when you improve ten different parts of your business by 1% each. It happens when you make a giant improvement in ONE area.
So, for example, let’s say that for the next 12 weeks you decide to focus on Acquisition.
For now, you can ignore all your ideas that fall under Activation, Monetization, and Retention, and focus 100% on your Acquisition ideas:
The next thing you need to do is to prioritize those Activation ideas. And to do this, I highly recommend using the ICE Framework. ICE stands for…
So, what you want to do is this: for each idea, measure the Impact, Confidence, and Ease of each idea on a scale from 1-10.
- Impact : How big of an impact will this idea have on your business? A 1 means that this idea will have a minimal impact, while a 10 means that this idea is a real “needle-mover” with the potential to dramatically grow your business.
- Confidence : How confident can you be that this idea will work? If you’ve tried it before and it worked well, this might be a 9 or 10. If it’s a gamble, it might be a 1 or 2.
- Ease : How easy or difficult would it be to implement this idea? The easier the implementation, the higher the score.
You should make this a discussion with your whole team. Give everyone a vote and average the results for each idea.
Here’s an example of how we scored a few different ideas here at DigitalMarketer using the ICE Framework. The ideas were “testing new homepage opt-in copy” and “launching a podcast.”
Test New Homepage Opt-In Copy
We knew that our homepage was a significant source of opt-ins. So, we knew that if we could move the needle and increase that conversion rate, it would have a high impact on our lead flow. (Impact of 10.)
At the same time, we had never tested the copy that was on the homepage. So, we were reasonably confident that we could beat that copy that was currently there. (Confidence of 9.)
Finally, because this involved changing just a few lines of text, it was super quick & easy to implement. (Ease of 10.)
ICE score: 10 + 10 + 9 = 29 / 3 = 9.7
As the ICE score suggests, this idea was really a no-brainer for us. As a result, it shot up to #1 on our list of priorities.
And we would go on to update the homepage to…
Launch a Podcast
We knew that if we could launch a podcast and have it do really well, that could be a huge needle-mover for our business. It could help grow our brand and generate awareness by reaching a massive number of people who listen to podcasts. (Impact of 10.)
However, we had never launched a podcast before—so we had no experience in that arena. As a result, we were not highly confident that we would be able to produce a great podcast right out of the gate. (Confidence of 2.)
And because we had never done a podcast before, implementing this was not going to be easy. It was going to involve lots of research, investing in new equipment, setting up a studio, and lots of other setup. Definitely not an easy process. (Ease of 1.)
ICE score: 10 + 2 + 1 = 13 / 3 = 4.3
This was a classic “moonshot” idea for us. Pulling it off would be tough, but the potential payoff was huge.
Keep in mind that just because it had a low ICE score, that doesn’t mean we didn’t do it. It just meant that we didn’t do it first . Instead, it got pushed down on the priority list of Acquisition ideas.
As you may know, we DID end up launching a podcast—and the Perpetual Traffic Podcast was a smash-hit beyond anything we expected. It turned out to be well worth the risk.
( RELATED: How to Launch a Podcast, Drive it to the Top of the Charts, AND Keep it There in Just 4 Steps )
The great thing about the ICE Framework is that it makes the process of project selection really transparent to the whole team, and nobody ever feels like their ideas are being ignored or disregarded.
Every idea gets scored by the team according to the ICE Framework, and everyone on the team gets a say in which projects get tackled first.
Business Growth Plan Step 2: Work in Focused Sprints (Not Exhausting Marathons)
People, teams, and companies perform best with short bursts of intense work followed by a rest.
We are NOT designed for long marathons.
(It’s interesting to note that according to legend, the first Greek runner who ever ran a marathon ended up falling down dead at the end of it.)
We tend to work much better when we can go all-out for a couple hours, then rest and recharge our batteries so that we’re fresh when we go at it again.
I’m not saying that you shouldn’t work hard, and I’m not saying that you shouldn’t work hard for long periods of time.
What I’m saying is that your work should follow a cycle that allows you to put forth 100% effort and then recover from that effort so you can do it again.
Work really hard, rest.
…you get it. 🙂
Fortunately, this sprint-based style of project implementation works perfectly with sequential goals because it allows you to pursue one single goal for that short period of hard work …
Then you take a break before pursuing the next goal.
And when you add all those sprints together, you get what we call a “season.”
Business Growth Plan Step 3: Work in 12-Week “Seasons”
We experience life in seasons. We’re never in one consistent mode all the time.
This applies to many different timeframes. Obviously, it applies to the seasons of a year, as the weather changes from cold, snowy winter to hot, thriving summer and back again.
But it also applies on the level of a week, where we have five days of focused work followed by two days of rest and recovery.
Similarly, each day can be thought of as having its own “seasons” too; often the morning involves some ramp-up time, after which we increase to our most productive period in the late morning. From there it’s common to have a lull in the afternoon, after which we ramp up again to finish our work in time to head home at night.
So, that’s why I think it makes sense to approach growth projects using that same idea of seasons.
And when it comes to putting growth projects into action, these are the five “seasons” of implementation:
- Learn : This is where you learn the principles that will help guide the implementation of your upcoming project. This isn’t “just in case” learning, where you’re researching something you might, maybe implement someday. It’s “just in time” learning where you’re figuring out how to implement one big idea that you’re about to work on NOW.
- Implement : This is where the rubber meets the road. Stop attending webinars, watching videos, and reading blog posts. Now’s your chance to take ACTION. Whatever your project is, this is the time to put in the legwork to get it done.
- Celebrate : Once you’ve finished implementing your project, take a moment to sit back and celebrate all your hard work! I don’t recommend celebrating your results at this point—because after all, not every project is going to be a win. Instead, simply celebrate the fact that you got something done. That you learned something. That you took meaningful action to grow your business.
- Optimize : Often we will implement something, but that implementation will be shaky at best. We’ll build a bridge, but it will be a rickety bridge with lots of holes and problems. That’s why we need to take time to optimize—to improve what we’ve implemented, to fix the bugs, to iron out the kinks. This is an important step because it helps us to get the best results from whatever it is we just implemented and make sure we’re putting forth a polished and professional effort.
- Rest/Repeat : Now that your project has been implemented and optimized, I recommend you take a little time off to rest before going at it again. This is important to recharge your batteries so that when the next season starts, you’re ready to give it all you’ve got and really kick butt on your next project.
Here at DigitalMarketer, we follow this season in 12-week cycles. We find that 12-week cycles work really well for a couple reasons.
For one thing, 12 weeks is long enough to allow you to really dig in and implement some significant solutions.
Secondly, 12 weeks gives you four quarters each year. This lines up perfectly with the 4 Growth Levers, which means you can focus on each Growth Lever once a year.
Our 12-week season looks like this:
We take just one week to learn, followed by four weeks of implementation. After that we give ourselves a week to celebrate, then we spend the next four weeks optimizing our work. Finally, we take a short two-week break before starting all over again.
3 Business Growth Mindsets
Now that we’ve covered the three steps of implementing a growth project, I want to briefly hit on three critical mindsets to getting growth done.
Business Growth Mindset #1: Patiently Impatient Thinking
“Patiently impatient thinking” means that you work with a sense of urgency…
Really push yourself to get your work done as quickly and efficiently as possible…
…while also understanding that results always lag behind your efforts.
A good analogy here is to think of this in terms of exercise.
You need a sense of urgency while putting in the work while being patient for the results.
If you want to lose weight and get in shape, how would you achieve that goal?
For one thing, you would probably start working out, right?
And if you wanted to get in really great shape, you would work out intensely. With a sense of urgency.
But at the same time, you have to recognize the fact that you can’t transform your body overnight.
It takes time for the results to come.
And the same thing is true of growth strategies. You need a sense of urgency while putting in the work…
…while being patient for the results—knowing that they will take some time, but they will come eventually.
Business Growth Mindset #2: High-Impact Thinking
The second important growth mindset is to foster high-impact thinking.
And to illustrate what I mean by that, I want to warp back to high school physics class for a minute. Let’s talk about Newton’s Second Law of Motion, which states:
Force = Mass x Acceleration
What this equation basically says is that to generate a lot of force you either need a lot of mass…or a lot of acceleration.
Growth ideas are the same way.
An idea with high mass and low acceleration might be like a steamroller. A steamroller doesn’t move very fast…but it’s so big and massive that once it reaches its target, it generates a massive amount of force.
For us, launching the Perpetual Traffic Podcast was a steamroller idea. It took a lot of work to get it moving, but once it launched it made a big impact on our business.
An idea with low mass and high acceleration might be more like a bullet. Bullets aren’t very heavy. They weigh just a couple ounces. But they’re shot with so much velocity that they are able to generate a massive amount of force.
The great thing about bullets is that you can implement lots of quick and easy ideas in a short amount of time. You can fire them off one after another.
In the 12-week implementation season, we spend the Learn and Implement phases focusing on steamroller strategies that will really move the needle.
Then during the Optimization phase, we focus on lots of bullets that we can implement to improve that steamroller idea as quickly as we can.
Business Growth Mindset #3: Leadership Thinking
I hear from a lot of business owners who claim to be the “visionary” for their company. They think their job is to come up with ideas, and that it’s the rest of their team’s job to implement them.
Leaders don’t merely plan…leaders lead. They DO! Because good leaders understand that…
“A good plan violently executed now is better than a perfect plan executed next week.”—U.S. General George S. Patton
You don’t need a perfect plan. You need a good plan that gets DONE. And as a leader, it’s your job to make sure that happens.
Here at DigitalMarketer, our leaders do the most work. They lead by example.
Don’t be one of those leaders who sits in your ivory tower and just dictates orders down the mountain. Instead, roll your sleeves up and get your hands dirty doing the work yourself.
That’s why this growth implementation plan is so important.
And that’s how you lead a company.
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How to Write a Business Plan, Step by Step
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .
1. Write an executive summary
2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. add additional information to an appendix, business plan tips and resources.
A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.
on ZenBusiness' website
Here’s a step-by-step guide to writing your business plan.
» Need help writing? Learn about the best business plan software .
This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.
Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.
» MORE: How to write an executive summary in 6 steps
Next up is your company description, which should contain information like:
Your business’s registered name.
Address of your business location .
Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.
Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.
Lastly, it should cover the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.
» MORE: How to write a company overview for a business plan
The third part of a business plan is an objective statement. This section spells out exactly what you’d like to accomplish, both in the near term and over the long term.
If you’re looking for a business loan or outside investment, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.
For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and how much you think sales will increase over the next three years as a result.
In this section, go into detail about the products or services you offer or plan to offer.
You should include the following:
An explanation of how your product or service works.
The pricing model for your product or service.
The typical customers you serve.
Your supply chain and order fulfillment strategy.
Your sales strategy.
Your distribution strategy.
You can also discuss current or pending trademarks and patents associated with your product or service.
Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.
Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.
» MORE: R e a d our complete guide to small business marketing
If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.
You may also include metrics such as:
Net profit margin: the percentage of revenue you keep as net income.
Current ratio: the measurement of your liquidity and ability to repay debts.
Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.
This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.
» NerdWallet’s picks for setting up your business finances:
The best business checking accounts .
The best business credit cards .
The best accounting software .
This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.
Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.
List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
Here are some tips to help your business plan stand out:
Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.
Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.
Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. You can search for a mentor or find a local SCORE chapter for more guidance.
The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.
What is a business plan?
- Types of business plans
- How to write
- Business planning tips
- Industry business plans
How to write a business plan
How to Write a Business Plan
Noah Parsons | Apr 27, 2023
Writing a business plan doesn’t have to be complicated. The more you know about what goes into your plan, the easier it will be to write.
In this step-by-step guide, you’ll learn how to put together a strong, detailed business plan. One that will impress bankers and potential investors, while helping you start, run, and grow a successful business.
Step-by-step guide for writing a business plan
Follow these simple steps and download one of our free business plan templates to make writing your business plan quick and easy.
Start with a one-page plan
Outline all of your important business details with a brief and focused document that’s incredibly easy to update and expand. You may even find that it’s all you need to run your business.
Write an executive summary
Create a brief and convincing introduction to your business. This is the first, and possibly only, thing investors, employees and anyone else will read. It’s second on this list, but the last thing you should write.
Describe your products and services
This is where you describe what you are selling and how it solves a problem for your target market. Any other information, like initial traction or patents, should further demonstrate how your product/service stands out.
Document your market analysis
When writing a business plan you’ll need to spend some time collecting information about your customers. The tricky part is taking all of that data and turning it into an informative description of your target market.
Show that you know the competition
Everyone has competition and you should show that you understand who they are and how you compare as part of your business plan.
Outline your marketing and sales plan
Describe how you plan to reach and sell to your potential customers, what your sales strategy will be, and what marketing activities you will use to make your business successful.
Provide an overview of your operations
It’s important to address the specific day-to-day operations and setup for your business. This includes your location, distribution efforts, partnerships, and anything else that keeps you running.
Track milestones and metrics
While not required to complete your business plan it can be incredibly useful to map out key business milestones and the metrics you’ll be tracking along the way.
Describe your company and team
Explore the human element of your business by creating a company description that includes an overview of your history, management team, potential hires, and legal structure.
Make a financial plan and starting forecasts
Creating a financial forecast and budget prepares you with the necessary financial statements and forecasts to set goals and pursue business loans and investments.
Add supporting information to an appendix
A place for additional data, charts, or other information that supports or just doesn’t fit into specific sections of your plan.
Business plan templates and tools
Kickstart your plan writing by downloading one of our free business plan templates.
Traditional business plan template
Download a free SBA-approved business plan template built for small businesses and startups.
One-page plan template
Download a free one-page plan template to write a useful business plan in as little as 30 minutes.
Sample business plan library
Explore over 500 free real-world business plan examples from a wide variety of industries to inspire and guide your own plan.
Explore Sample Business Plans
Write your plan faster with LivePlan
Try the business planning and growth tool trusted by over 1 million business owners.
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How to write a business plan FAQ
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What Are the Three Steps to Strategic Planning?
A strategic plan is essentially two items paired together, the overarching vision for your organization AND how to get there. If you imagine a car setting out on a road trip across the country, the strategy is the destination, and the plan is the locations/stops along the way that are required to get there. The strategy is aligned with your vision and where you and your community want to be. Both strategy and planning are useful pieces to understand, but to be successful with one component, you need the other. A great strategic plan perfectly aligns the two in order to direct an organization’s future. Strategic plans align the future of organizations for the next three to five (or more) years. This blog takes a look at the core steps that we follow to craft strategic plans for our clients. Let’s take a look.
Every plan that NMBL produces, begins with thorough research. A proper strategic plan is tailored to fit an organization in every aspect. Tailoring a plan cannot be achieved without understanding it from top to bottom, internally and externally, and from every other possible perspective. That is why our research is always hands-on and focused on those who will know the most about the organization: the community. We utilize a thorough interview phase where we talk to all stakeholders in the organization, including employees, board members, external community members, community leaders, donors, members, and more as needed.
During this interview phase, we are working on connecting with the leadership, donors, contributors, and the community to hear everything about the organization. The objective of talking to as many stakeholders as possible is to hear what the community thinks of the organization. This allows us to gauge their strengths and the opportunities they could act upon. Our goal is to hear from as many people as possible in order to get a full picture of the organization and the educational role they hold. We often utilize an online survey to create a sort of digital town hall meeting where we can reach a broad audience and hear diverse perspectives. It allows us to gather as much information as possible from the community but in such a way that is convenient for the people taking this survey.
In addition to interviews, we always examine the technical aspects of an organization in order to compare the organization as it is in respect to the perspectives shared in interviews. This typically involves reviewing budgets, organization charts, applicable reports, industry data, and anything else organizations can share.
Once we have attained a significant amount of data and information, we undertake an analysis phase where we complete a PESTLE analysis . We utilize the PESTLE analysis to do a full review of the environment of our client’s industry, taking a look at the trends and common practices within the industry under each of the PESTLE categories (Political, Economic, Social, Technological, Legal and Environmental). Explaning this process thoroughly requires its own discussion and so we encourage you to check out our blog breaking down What is a PESTLE Analysis . If you know a little about strategic planning, you might be asking why we don’t use a SWOT analysis. We shy away from this style of analysis because it fails to give our clients a truly complete picture of their strategic position. You can learn more about the SWOT analysis and its alternatives in our blog on Four Alternatives to a SWOT Analysis .
Finally, we view all of this information through the lens of the organization’s vision. The vision is a sort of benchmark in the process as we focus our planning efforts on vision-based strategic planning in order to produce a more pragmatic and holistic plan.
With the analysis stage complete (and it is a work-intensive process), we then move to the actual planning process as we begin to develop the plan for an organization. This is the stage where we take what we found in the research phase and establish the strategic position of the organization while keeping its vision in mind. We must take the diverse perspectives from interviews, the PESTLE analysis outcomes, and blend these with the vision of the organization to determine what concrete steps the organization can take in the next three to five years to move toward its vision. This may require some high-level adjustments to the mission statement or key stakeholder objectives. Additionally, this is where we consider the unique needs of every client in order to craft a plan that targets their community’s key needs.
For example, while developing a strategic plan for America’s Black Holocaust Museum NMBL had to build the unique needs of the organization into the plan. The museum had been closed for many years, but one expectation of the planning process was to reopen as soon as possible. Additionally, there was a strong feeling that the museum could become a centerpiece of the neighborhood. Not every organization presents the same unique needs, vision, or history and that is why NMBL ensures that every organization gets a unique development stage where we build a plan on the foundation laid by thorough research.
3. Final Plans
Once we reach the final plans stage of the strategic planning process, we have a document in hand that lays out the objectives, strategies, and needs of the organization. This is the stage where we continue to work with the organization to ensure that the plan in hand tackles the rights issues in the best way for that organization. Once a final evaluation is complete with the organization, we will finalize the plan, including suggestions or cementing finer details where needed, before crafting what is the final plan for the organization.
While we work to keep the planning process to an efficient but thorough three-step plan, we must note two follow-up steps. Although not part of the core planning process, operationalizing as well as tracking and adjustment are crucial actions for putting the final touches on an excellent plan. Below we take a look at what these steps involve.
All too often, plans are made but then go on the shelf to collect dust. Not here. At NMBL, a core tenet of our planning process is to ensure functionality. We achieve that through building in operationalization into our work. This begins in the planning process by ensuring that the details of the plan are tailored to the client and based upon in-depth research and analysis. A massive challenge that faces many organizations is the fact that their plan is cookie cutter and not the right fit for them. With a quality plan in place, NMBL then resolves to help clients apply their plan through every level of their organization so that it can truly be a strategic guide to their activities. The operationalizing stage is where the action happens for the client. NMBL is often hands-on in this phase, bringing in our other services to help organizations through change management , fundraising , grand opening logistics, staffing , board education , interim executive work , and more. The key to a successful operationalization phase is knowing when to ask for help. By nailing the operationalization phase, your organization will reap the full benefits of the strategic plan for the long term, so it is not the time to shy away from the right help. Learn more about effective operationalizing in our blog on Operationalizing a Nonprofit Strategic Plan .
Tracking and Adjustments
A plan is an important first step, but an organization will not reach its full potential unless it has metrics with which to judge itself and remain on track. Performance measurements and consistent review of the applicability of strategies as well as new internal or external developments are critical to keeping a plan on track. Plans must have some flexibility because, as anyone who has lived through 2020-2021 can attest, even the best plan will still not expect everything (a pandemic for example). Therefore, it is crucial to set a plan for when to evaluate the utility of the strategic plan and where it needs to be adjusted to match the realities of the industry, community, or changes within the organization. Learn more about tracking in our blog on What is the Purpose of Performance Measures for a Strategic Plan?
There is always more to learn about in the strategic planning process so we encourage you to check out more features in our strategic planning series!
Environmental Analysis (PESTLE)
Now, more than ever, a proper strategic plan is incredibly important. The world has changed considerably in the last year and so did many organizations. Nobody was planning on a pandemic. Everyone was reacting, but with a strategic plan, your organization can enjoy the benefit of a proactive future. As the world is slowly coming out of the pandemic and looks toward a new normal, organizations feel like they are having somewhat of a new start. Many businesses shifted their products, services, and delivery of both. Nonprofits fundraised digitally and donors changed their behaviors. This new normal provides many organizations with the desire to reset their sense of direction. With the new landscape comes changes to previous strategic plans. Metrics of success, competition, consumers, staff, and societal shifts (economic/political/social) are just a few things that have changed. It is essential to get off the back foot and enjoy the strategic benefits of a planned future. A strategic plan provides that guidance and the insights needed to correct organizational deficiencies.
Interested in aligning your future? We want to help prepare your organization to meet its strategic goals. Download our free strategic plan prep kit here and click the button below to connect with us for a strategic plan consultation.
About NMBL Strategies
NMBL Strategies seeks to empower small businesses, nonprofits and public-private enterprises through trusted consulting partnerships. Our consultants have real world experience and significant tenure within their fields and are able to deliver the best and most strategic return on investment. We strive to grow our business with the same dedication and decisiveness we offer to our broad range of clients.
NMBL Strategies is a strategic, decisive partner trusted to deliver the best ROI when needed most.
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How to write a business plan in seven simple steps
When written effectively, a business plan can help raise capital, inform decisions, and draw new talent.
Companies of all sizes have one thing in common: They all began as small businesses. Starting small is the corner for those just getting off the ground. Learn about how to make that first hire, deal with all things administrative, and set yourself up for success.
Writing a business plan is often the first step in transforming your business from an idea into something tangible . As you write, your thoughts begin to solidify into strategy, and a path forward starts to emerge. But a business plan is not only the realm of startups; established companies can also benefit from revisiting and rewriting theirs. In any case, the formal documentation can provide the clarity needed to motivate staff , woo investors, or inform future decisions.
No matter your industry or the size of your team, the task of writing a business plan—a document filled with so much detail and documentation—can feel daunting. Don’t let that stop you, however; there are easy steps to getting started.
What is a business plan and why does it matter?
A business plan is a formal document outlining the goals, direction, finances, team, and future planning of your business. It can be geared toward investors, in a bid to raise capital, or used as an internal document to align teams and provide direction. It typically includes extensive market research, competitor analysis, financial documentation, and an overview of your business and marketing strategy. When written effectively, a business plan can help prescribe action and keep business owners on track to meeting business goals.
Who needs a business plan?
A business plan can be particularly helpful during a company’s initial growth and serve as a guiding force amid the uncertainty, distractions, and at-times rapid developments involved in starting a business . For enterprise companies, a business plan should be a living, breathing document that guides decision-making and facilitates intentional growth.
“You should have a game plan for every major commitment you’ll have, from early-stage founder agreements to onboarding legal professionals,” says Colin Keogh, CEO of the Rapid Foundation—a company that brings technology and training to communities in need—and a WeWork Labs mentor in the UK . “You can’t go out on funding rounds or take part in accelerators without any planning.”
How to make a business plan and seven components every plan needs
While there is no set format for writing a business plan, there are several elements that are typically included. Here’s what’s important to consider when writing your business plan.
1. Executive summary
No longer than half a page, the executive summary should briefly introduce your business and describe the purpose of the business plan. Are you writing the plan to attract capital? If so, specify how much money you hope to raise, and how you’re going to repay the loan. If you’re writing the plan to align your team and provide direction, explain at a high level what you hope to achieve with this alignment, as well as the size and state of your existing team.
The executive summary should explain what your business does, and provide an introductory overview of your financial health and major achievements to date.
2. Company description
To properly introduce your company, it’s important to also describe the wider industry. What is the financial worth of your market? Are there market trends that will affect the success of your company? What is the state of the industry and its future potential? Use data to support your claims and be sure to include the full gamut of information—both positive and negative—to provide investors and your employees a complete and accurate portrayal of your company’s milieu.
Go on to describe your company and what it provides your customers. Are you a sole proprietor , LLC, partnership, or corporation? Are you an established company or a budding startup? What does your leadership team look like and how many employees do you have? This section should provide both historical and future context around your business, including its founding story, mission statement , and vision for the future.
It’s essential to showcase your point of difference in your company description, as well as any advantages you may have in terms of expert talent or leading technology. This is typically one of the first pieces of the plan to be written.
3. Market analysis and opportunity
Research is key in completing a business plan and, ideally, more time should be spent on research and analysis than writing the plan itself. Understanding the size, growth, history, future potential, and current risks inherent to the wider market is essential for the success of your business, and these considerations should be described here.
In addition to this, it’s important to include research into the target demographic of your product or service. This might be in the form of fictional customer personas, or a broader overview of the income, location, age, gender, and buying habits of your existing and potential customers.
Though the research should be objective, the analysis in this section is a good place to reiterate your point of difference and the ways you plan to capture the market and surpass your competition.
4. Competitive analysis
Beyond explaining the elements that differentiate you from your competition, it’s important to provide an in-depth analysis of your competitors themselves.
This research should delve into the operations, financials, history, leadership, and distribution channels of your direct and indirect competitors. It should explore the value propositions of these competitors, and explain the ways you can compete with, or exploit, their strengths and weaknesses.
5. Execution plan: operations, development, management
This segment provides details around how you’re going to do the work necessary to fulfill this plan. It should include information about your organizational structure and the everyday operations of your team, contractors, and physical and digital assets.
Consider including your company’s organizational chart, as well as more in-depth information on the leadership team: Who are they? What are their backgrounds? What do they bring to the table? Potentially include the résumés of key people on your team.
For startups, your execution plan should include how long it will take to begin operations, and then how much longer to reach profitability. For established companies, it’s a good idea to outline how long it will take to execute your plan, and the ways in which you will change existing operations.
If applicable, it’s also beneficial to include your strategy for hiring new team members and scaling into different markets.
6. Marketing plan
It’s essential to have a comprehensive marketing plan in place as you scale operations or kick off a new strategy—and this should be shared with your stakeholders and employees. This segment of your business plan should show how you’re going to promote your business, attract customers, and retain existing clients.
Include brand messaging, marketing assets, and the timeline and budget for engaging consumers across different channels. Potentially include a marketing SWOT analysis into your strengths, weaknesses, opportunities, and threats. Evaluate the way your competitors market themselves, and how your target audience responds—or doesn’t respond—to these messages.
7. Financial history and projections
It’s essential to disclose all finances involved in running your company within your business plan. This is so your shareholders properly understand how you’re projected to perform going forward, and the progress you’ve made so far.
You should include your income statement, which outlines annual net profits or losses; a cash flow statement, which shows how much money you need to launch or scale operations; and a balance sheet that shows financial liabilities and assets.
“An income statement is the measure of your financial results for a certain period and the most accurate report of business activities during that time, [whereas a balance sheet] presents your assets, liabilities, and equity,” Amit Perry, a corporate finance expert, explained at a WeWork Labs educational session in Israel.
It’s crucial to understand the terms correctly so you know how to present your finances when you’re speaking to investors. Amit Perry, CEO and founder of Perryllion Ltd.
In addition, if you’re asking for funding, you will need to outline exactly how much money you need as well as where this money will go and how you plan to pay it back.
12 quick tips for writing a business plan
Now that you know what components are traditionally included in a business plan, it’s time to consider how you’ll actually construct the document.
Here are 12 key factors to keep in mind when writing a business plan. These overarching principles will help you write a business plan that serves its purpose (whatever that may be) and becomes an easy reference in the years ahead.
1. Don’t be long-winded
Use clear, concise language and avoid jargon. When business plans are too long-winded, they’re less likely to be used as intended and more likely to be forgotten or glazed over by stakeholders.
2. Show why you care
Let your passion for your business shine through; show employees and investors why you care (and why they should too).
3. Provide supporting documents
Don’t be afraid to have an extensive list of appendices, including the CVs of team members, built-out customer personas, product demonstrations, and examples of internal or external messaging.
4. Reference data
All information regarding the market, your competitors, and your customers should reference authoritative and relevant data points.
5. Research, research, research
The research that goes into your business plan should take you longer than the writing itself. Consider tracking your research as supporting documentation.
6. Clearly demonstrate your points of difference
At every opportunity, it’s important to drive home the way your product or service differentiates you from your competition and helps solve a problem for your target audience. Don’t shy away from reiterating these differentiating factors throughout the plan.
7. Be objective in your research
As important as it is to showcase your company and the benefits you provide your customers, it’s also important to be objective in the data and research you reference. Showcase the good and the bad when it comes to market research and your financials; you want your shareholders to know you’ve thought through every possible contingency.
8. Know the purpose of your plan
It’s important you understand the purpose of your plan before you begin researching and writing. Be clear about whether you’re writing this plan to attract investment, align teams, or provide direction.
9. Identify your audience
The same way your business plan must have a clearly defined purpose, you must have a clearly defined audience. To whom are you writing? New investors? Current employees? Potential collaborators? Existing shareholders?
10. Avoid jargon
Avoid using industry-specific jargon, unless completely unavoidable, and try making your business plan as easy to understand as possible—for all potential stakeholders.
11. Don’t be afraid to change it
Your business plan should evolve with your company’s growth, which means your business plan document should evolve as well. Revisit and rework your business plan as needed, and remember the most important factor: having a plan in place, even if it changes.
A business plan shouldn’t just be a line on your to-do list; it should be referenced and used as intended going forward. Keep your business plan close, and use it to inform decisions and guide your team in the years ahead.
Creating a business plan is an important step in growing your company
Whether you’re just starting out or running an existing operation, writing an effective business plan can be a key predictor of future success. It can be a foundational document from which you grow and thrive . It can serve as a constant reminder to employees and clients about what you stand for, and the direction in which you’re moving. Or, it can prove to investors that your business, team, and vision are worth their investment.
No matter the size or stage of your business, WeWork can help you fulfill the objectives outlined in your business plan—and WeWork’s coworking spaces can be a hotbed for finding talent and investors, too. The benefits of coworking spaces include intentionally designed lounges, conference rooms, and private offices that foster connection and bolster creativity, while a global network of professionals allows you to expand your reach and meet new collaborators.
Using these steps to write a business plan will put you in good stead to not only create a document that fulfills a purpose but one that also helps to more clearly understand your market, competition, point of difference, and plan for the future.
For more tips on growing teams and building a business, check out all our articles on Ideas by WeWork.
Caitlin Bishop is a writer for WeWork’s Ideas by WeWork , based in New York City. Previously, she was a journalist and editor at Mamamia in Sydney, Australia, and a contributing reporter at Gotham Gazette .
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Business Planning Process: Create a Business Plan That Works
- Written by Radhika Agarwal
If you are planning to start or grow your business , you might have heard about the importance of the business planning process countless times. And yes, it is necessary to have a plan. After all, it’ll be your roadmap to success.
But how would you go about it? Where will you start? And most importantly is there a tried and tested process that can make your job easier? What if we told you there is such a process?
And through this article, we’ll walk you through everything from what is business planning to the steps of the business planning process .
What is Business Planning?
Business planning is the process of giving structure to your business idea. It acts as a roadmap to your business journey, helps you get through obstacles, and maximizes opportunities.
It also helps you set realistic goals and pursue the same with a structured action plan.
Moreover, through a business plan, you can analyze your company’s strengths and weaknesses, and understand how that would impact your company while dealing with market competition and how your strengths would help you achieve your goal.
Above all, doing business with a well-written business plan increases your chances of success.
Steps of the Business Planning Process
Although there’s no sole right way to go about the process of planning your business, here’s a compilation of steps that’ll make your planning process faster and easier.
1. Carry out your research
The first step to creating a business plan is to do thorough research about the business and industry you are trying to get into. Tap into all the information you can get about your target audience, potential customer base, competitors, market and industry trends , cost of business, etc.
You can give a form to your research by asking yourself the following questions:
- What are your goals?
- Where does your business stand currently?
- What are the prevailing market trends?
- What strategies is your competitor following?
You can find your answers by conducting market surveys , talking to customers and industry experts, designing good questionnaires, reading articles, blogs, and news updates about your industry and related ones, and so on.
Also, it is a good practice to conduct a SWOT analysis for your company to understand how your company’s strengths and weaknesses would help you stand apart from your competitors based on the current market statistics.
2. Make a Framework
Once you’re done with your research the next step is to make a framework or a set of strategies for your business based on your research and business goals. You can either design strategies from scratch or reframe previously tried and tested successful strategies to fit your business goals.
But remember that you’ll have to tweak strategies to fit your unique competitive advantages and goals. Hence, strategies that are already being used can act as a good foundation, but it is essential to remember that you’ll have to expand upon them or improvise them for your business.
This step can be completed by taking a deep dive into your customer’s buying motivations and challenges that your product can help solve. Based on that, make a marketing plan , operations plan , and cost structure for your business at least for the first few years of your business.
3. Formulate your Financial Forecasts
No matter how tedious finances might seem, they are an integral part of any business. When you map out your finances it is essential to note down all the costs you’ll incur as you grow and run your business for the next five years and what would be your potential revenue , and if or not it would leave room for profit.
You can get your financial forecast by adding your financial assumptions to a financial system which will give you your cash flow statements and give you an idea of what amount of funds you’ll need to start and run your business for the first year.
This step is especially helpful if you want to acquire funding for your business. Nonetheless, it helps you prepare to deal with the financial aspects of your business.
A financial statement essentially provides details of a company’s expenses and profits. It also provides an overview of the company’s current financial stance, including its assets and liabilities .
Through this section try to write down and explain how you plan to use your investments and how would the same give a return.
4. Draft a Plan
As you’re done with creating business strategies and planning your finances, it is time to draft your business plan and compile everything into a single document. As you are done with all the technical aspects, this step should feel relatively easy.
But if you need help drafting a business plan and making it look presentable, you can subscribe to business plan software that comes with predesigned templates and tools to make your work easier .
5. Recheck and Improvise
Now as you’re done with writing your plan, it is a good idea to give it enough time to edit it. Check for any unclear sentences, irrelevant phrases, or confusing terms.
Take suggestions from your team members who are familiar with the functioning of your business. Finally, proofread for any grammar or punctuation errors. One of the most popular and useful pieces of editing advice is to put your work aside for a while and then look at it with fresh eyes to edit it better.
6. Create an Impressive Business Plan Presentation
Now, as you’re done with writing your business plan it is time to create a presentation that leaves an excellent impression on your audience. Highlight all the important and relevant points.
Also, add references for your investors like your financial reports, resumes of your key team members, snippets of your marketing plan, and past sales reports to have a well-rounded presentation.
It is true that starting a business is intimidating. It includes a bunch of emotions, chaotic ideas, and a will to take risks. ( Risks are a part and parcel of starting a business, no matter how much you plan, but yes planning helps you prepare for it.) But in the end, all of us know that all of it is worth it if you have a profitable business in the end.
And business planning is something that takes you one step closer to your idea of success. Moreover, a plan keeps you going in the face of challenges and adversities, and helps you push yourself a little harder to achieve your dreams when things get tougher.
Above all, a business plan helps you take action and turn ideas into a real and functioning business. So, what are you waiting for? Go ahead and start planning !
And while you’re at it do check out Upmetrics’s business planning software to make business planning easier and faster.
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The Strategic Planning Process in Three Basic Steps
Here are the three basic steps to get Strategic Planning started:
- Step one. Assess where you are now. What is your identity as expressed through your firm’s mission, vision, and values?
Define Your Organizational Profile
- What are your specialties and services offered?
- What is your organizational culture?
- Do you have unique/special skills?
- Are the ages of your key staff members balanced?
- Is a second tier for succession in place?
- Is your firm’s infrastructure, including systems, facilities, and technology, up to date?
- Step two. Assess where you would like to go. What is your direction , taking into consideration your competitive position, your long-term objectives, and your strategies, tactics, and action plans to get there?
- Step three. Assess your progress. What is your framework for accountability within your firm to ensure your strategic plan gets tracked, evaluated, and revised based on changing goals and market conditions?
A strategic plan can be effective whether it is three pages or three hundred pages, so long as it fits the culture and constraints of your firm. The critical element is to have something in writing as a basis for reflection and revision(s) in the future.
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What is product lifecycle management (PLM)?
Product lifecycle management (pml) deals with every stage across a product’s lifetime. from the creative thinking of the product designer, to the valuable data being sent and received by your iot network, and finally, to the frank and timely feedback you get from your customers – every piece of information across a product’s lifecycle is part of a bigger story..
And with today’s circular economies and more transparent supply chains , that story extends back to the raw materials used in production, and forward to the end-of-life stages of that product such as recycling and repurposing. The trick to a good PLM strategy is to listen to all those stories — and be able to act on them. This means integrating and analyzing them so that you can make meaningful improvements and innovations, quickly.
What is PLM software?
As a technology, PLM software helps organizations to develop new products and bring them to market in far more efficient, collaborative, and sustainable ways. It integrates processes for each stage of a product's lifecycle across globalized supply chains, making it easier to track and share data along the product value chain – from initial design and engineering through manufacturing , and supply chain management. PLM solutions can help teams collaborate and work together, no matter where they are, using a common record of enterprise product data, such as parts and material requirements, engineering changes, workflows, and regulations. And when smart technologies like AI and the IoT come into the mix, modern PLM solutions can provide real-time insights into product performance, customer feedback, and market trends.
PLM meaning in business
In an age where innovation is key to business survival and success, PLM plays a critical role in helping manufacturers develop the next generation of products, at a lower cost, and with a faster time to market. While PLM can also be interpreted as a business strategy, three fundamentals impact the way teams work and the ability for organizations to grow and thrive:
- Universal, secure, managed access and use of product definition information
- Maintenance of the integrity of that product definition and related information throughout the life of the product
- Management and maintenance of the business processes used to create, manage, disseminate, share, and use the information
The five phases of product development
- Concept and design: The ideation phase, where a product’s requirements are defined based on factors including competitor analysis, gaps in the market, or customer needs.
- Develop: The detailed design of the product will be created, along with any necessary tool designs. This phase includes validation and analysis of the planned product, as well as prototype development and piloting in the field. This generates vital feedback on how the product is used and what further refinements are needed.
- Production and launch: Feedback from the pilot is used to adjust the design and other components to produce a market-ready version. The production of the new product is scaled – followed by launch and distribution to the market.
- Service and support: Following the launch of the new product, the period of time when service and support is offered.
- Retirement: At the end of the product’s lifecycle, its withdrawal from the market must be managed – along with any retrials or absorption into new concept ideas.
How does a PLM system work?
A PLM system gives designers and engineers access to the critical data they need in real time. The system streamlines project management by linking CAD (computer-aided design) data with a bill of materials and other enterprise data sources, such as integration with an ERP system, and manages this product data through all stages of the product development lifecycle.
PLM also prevents designers and engineers from operating in a disconnected vacuum, giving them insight into external sources of information like customer and analyst feedback on current products, performance data on products in the field, and visibility into the limitations of downstream processes like manufacturing.
A PLM system also benefits teams beyond design and engineering. It can provide ‘single source of truth’ visibility to business stakeholders and/or suppliers for easy delivery of feedback early in the product development process.
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Evolution of product lifecycle management
In the 1980s, American Motors Corporation (AMC) was a small player in the automotive industry. The company lacked the big budgets of larger players in the market, which hampered its ability to compete effectively. AMC leadership had the idea of tracking products from inception to end-of-life in order to improve processes and compete more efficiently – the first iteration of product lifecycle management.
The data gathered was used to inform better decisions from ideation through to procurement and the production process. AMC grew its market share and the company was later bought by Chrysler and became the auto industry’s lowest-cost producer by the mid-1990s .
Today, PLM has been adopted across manufacturing to foster collaboration, boost innovation, and efficiently support growth through designing to customer demand and product individualization.
And in a time of digital transformation and accelerated change – Forbes predicts that due to COVID-19, manufacturing will experience five years of innovation in the next 18 months – PLM plays a critical role in helping companies get products to market faster.
of customers expect more customized or personalized products than they received three years ago
of customers expect the same quality products and services as they received three years ago, but more quickly
Five benefits of PLM
The following are five key reasons why companies choose to invest in PLM solutions.
- Improvements to development, engineering efficiency, and effectiveness: Results from the Industry Week survey found that silos are the biggest challenge to engineering team performance. PLM enables the bi-directional flow of real-time data to support better knowledge-sharing and collaboration.
- Elimination of errors during the engineering release process: It’s far simpler – and cheaper – to rectify product issues that are identified earlier on. PLM helps to reduce cost and offers the additional environmental benefit of reducing manufacturing waste .
- Reduced time to market: Offering a single source of truth with up-to-date information at every phase of the product lifecycle, PLM empowers project managers to control overlapping timelines and get products to market faster.
- Improved project delivery: A cross-enterprise, digital PLM solution supports advanced workflow management. In this use case, PLM allows a team to precisely calculate product costs and more effectively manage the handover to manufacturing new designs.
- Higher quality designs: PLM offers designers and engineers a deeper level of insight into product requirements. Ingesting data from many different internal and external sources, a PLM system with integrated machine learning can turn performance data and customer feedback into new feature suggestions.
Examples of product lifecycle management
PLM systems are widely used across manufacturing. Key industries include aerospace, automotive, and defense. These companies are using PLM in innovative ways:
- Endress+Hauser is a leader in products and services for industrial process measurement and automation. Thanks to a PLM solution they reduced manufacturing and assembly costs, through improved transparency across the product development process, to improve their competitive advantage.
- VACUUBRAND , an industrial vacuum equipment supplier, shortened product development times, and improved product and data quality using an integrated PLM solution in place of disparate legacy systems.
Overcoming PLM challenges
Currently, fewer than half of R&D executives say they have visibility into the end-to-end, design-to-delivery process. This highlights that, for many organizations, PLM has not yet reached its potential as a single source of product truth.
In addition, the growing adoption of Industry 4.0 practices within manufacturing has led to an exponential increase in the amount of product and customer data available, providing greater visibility across product lifecycles. Data sharing among PLM entities could streamline product lifecycle management, but only if the data is correctly captured, analyzed, and disseminated safely – bringing into focus the need for integrated AI, machine learning, and data encryption.
Finally, many PLM advocates struggle to communicate the relevance of the software beyond engineering. In all of the above cases, investing in a solution that integrates with existing enterprise systems – and offers built-in artificial intelligence – will increase the use and value that the wider organization can gain.
Future of PLM technology
The demands of beating competitors to market, attracting top talent, and producing the highest quality product possible using sustainable practices will only continue to increase over time. PLM can help to meet these demands with shorter, more conscientious design and product engineering cycles, but only if organizations invest in the technology required to get there.
- More objects are coming online with the Internet of Things (IoT) and designers and engineers stand to gain far greater visibility into products in the field, as well as the ability to update products that are already in the hands of consumers. As McKinsey highlights , this enables manufacturers to continue creating new customer value throughout the product lifecycle.
- As sustainability continues to emerge as a topic of importance, businesses will look to modernize their product development processes through green product design, manufacturing, and logistics with the goal of achieving full supply chain sustainability .
- As with other types of enterprise software, PLM systems are increasingly being offered in the cloud as software as a service (SaaS) . This will make PLM more accessible to smaller companies and will continue to drive the collaboration that effective product development teams need while workforces become more distributed .
- Digital twins are virtual models of a product that are connected to their physical ‘twin’ via IoT and are managed within PLM systems. The concept is still new, but digital twins are predicted to drive significant cost savings for manufacturers in the years ahead. IDC states that , “By 2023, 65% of global manufacturers will have realized savings of 10% in operational expenses through process digital twins driven by IoT and machine learning.”
Why choose SAP PLM software?
SAP PLM software is designed to help organization streamline the product management lifecycle by providing full visibility across the extended enterprise. It guides the development of innovative products based on AI-driven features and design suggestions taken from customer feedback, market data, and performance insights. It supports responsible and compliant product design with access to global regulations and monitoring of EPR commitments. And it can help companies deliver smart, recurring revenue products through IoT data combined with engineering models. SAP PLM software supports everything from project management to multi-channel configure, price, and quote (CPQ) functionality, to aftermarket revenues. The future is coming fast so now is the time to make sure your manufacturing operations are ready.
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Product lifecycle refers to each stage a product goes through from initial concept to retirement. This includes ideation, design, prototyping, manufacturing, service, and end-of-life management.
A PLM software system is used in manufacturing to manage a product and its associated data through all stages of the product lifecycle. While primarily used by design and engineering teams working with CAD data, a PLM system can provide visibility into the product design process for all business stakeholders.
PDM only focuses on capturing and maintaining information on products through their development and useful life, whereas PLM can manage every aspect of the product through its lifecycle.
Product development software refers to solutions that help with the development of new products. Features might include product road maps, data analysis, a communication tool, task assignment, and bug tracking.
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Module 3: Planning and Mission
The planning cycle, learning outcomes.
- Explain the stages of the planning cycle.
- Explain why the planning cycle is an essential part of running a business.
Organizations have goals they want to achieve, so they must consider the best way of reaching their goals and must decide the specific steps to be taken. However, this is not a linear, step-by-step process. It is an iterative process with each step reconsidered as more information is gathered. As organizations go through the planning, they may realize that a different approach is better and go back to start again.
Remember that planning is only one of the management functions and that the functions themselves are part of a cycle. Planning, and in fact all of the management functions, is a cycle within a cycle. For most organizations, new goals are continually being made or existing goals get changed, so planning never ends. It is a continuing, iterative process.
In the following discussion, we will look at the steps in the planning cycle as a linear process. But keep in mind that at any point in the process, the planner may go back to an earlier step and start again.
Stages in the Planning Cycle
The stages in the planning cycle
The first, and most crucial, step in the planning process is to determine what is to be accomplished during the planning period. The vision and mission statements provide long-term, broad guidance on where the organization is going and how it will get there. The planning process should define specific goals and show how the goals support the vision and mission. Goals should be stated in measurable terms where possible. For example, a goal should be “to increase sales by 15 percent in the next quarter” not “increase sales as much as possible.”
Planning requires making some assumptions about the future. We know that conditions will change as plans are implemented and managers need to make forecasts about what the changes will be. These include changes in external conditions (laws and regulations, competitors’ actions, new technology being available) and internal conditions (what the budget will be, the outcome of employee training, a new building being completed). These assumptions are called the plan premises. It is important that these premises be clearly stated at the start of the planning process. Managers need to monitor conditions as the plan is implemented. If the premises are not proven accurate, the plan will likely have to be changed.
There may be more than one way to achieve a goal. For example, to increase sales by 12 percent, a company could hire more salespeople, lower prices, create a new marketing plan, expand into a new area, or take over a competitor. Managers need to identify possible alternatives and evaluate how difficult it would be to implement each one and how likely each one would lead to success. It is valuable for managers to seek input from different sources when identifying alternatives. Different perspectives can provide different solutions.
Next, managers must determine the resources needed to implement the plan. They must examine the resources the organization currently has, what new resources will be needed, when the resources will be needed, and where they will come from. The resources could include people with particular skills and experience, equipment and machinery, technology, or money. This step needs to be done in conjunction with the previous one, because each alternative requires different resources. Part of the evaluation process is determining the cost and availability of resources.
Plan and implement tasks
Management will next create a road map that takes the organization from where it is to its goal. It will define tasks at different levels in the organizations, the sequence for completing the tasks, and the interdependence of the tasks identified. Techniques such as Gantt charts and critical path planning are often used to help establish and track schedules and priorities.
Determine tracking and evaluation methods
It is very important that managers can track the progress of the plan. The plan should determine which tasks are most critical, which tasks are most likely to encounter problems, and which could cause bottlenecks that could delay the overall plan. Managers can then determine performance and schedule milestones to track progress. Regular monitoring and adjustment as the plan is implemented should be built into the process to assure things stay on track.
The planning cycle: essential part of running a business.
Following the planning cycle process assures the essential aspects of running a business are completed. In addition, the planning process itself can have benefits for the organization. The essential activities include the following:
- Maintaining organizational focus: Defining specific goals requires managers to consider the vision, mission, and values of the organization and how these will be operationalized. The methods and selected goals can demonstrate that the vision, mission, and values statements are working documents that are not just for show but prescribe activities.
- Encouraging diverse participation: Planning activities provide an opportunity for input from different functions, departments, and people. Some organizations establish planning committees that intentionally include people from diverse backgrounds to bring new perspectives into the planning process.
- Empowering and motivating employees: When people are involved in developing plans they will be more committed to the plans. Allowing diverse input into the planning cycle empowers people to contribute and motivates them to support the outcomes.
There are several stages, or steps, in the planning process. It is not unusual to have to repeat steps as conditions change. This process is essential to a business to maintain focus, gather diverse opinions, and empower and motivate employees.
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- The Planning Cycle. Authored by : John/Lynn Bruton and Lumen Learning. License : CC BY: Attribution
- Image: Stages in the Planning Cycle. Authored by : Lumen Learning. License : CC BY: Attribution
How To Start a Cleaning Business: 7 Easy Steps
There are many reasons why people decide to take on a side hustle or even go into business for themselves. Some want to escape the 9-to-5 office culture . Others want to be their own boss and make their own rules. A cleaning company can be a fulfilling and profitable business for the right individual. Keep reading to find out how to start a cleaning business.
Read: How to Build A Financial Plan From Zero
How To Start a Cleaning Business in 7 Steps
Starting a cleaning business entails planning, some financial decisions and completing legal steps. This guide will walk you through all the steps necessary to start a cleaning business in 2023. Here are seven steps you can take to start a residential cleaning business or commercial cleaning business today:
- Shop your business structure around
- Create your business plan
- Conduct market research
- Estimate your earning potential
- Set your prices
- Register your business
- Build your customer base
1. Shop Your Business Structure Around
When you are thinking about how to start a cleaning business, the first step should be a bit of self-reflection. Starting and operating a business can be hard work, and it requires patience and perseverance. You might have to work long hours, including nights and weekends, to get your business off the ground.
If you think you are ready but are still a bit overwhelmed, shop the idea around to friends, family and people you already know in the industry. It can really help you figure out how to move forward. You can even reach out to someone that runs a cleaning company to interview them over lunch. You can ask them for advice on how to start a cleaning business and what tips they have. Better yet, try to work part-time for a few shifts so you can get a better idea of the details.
2. Create Your Business Plan
Choosing a business that is right for you and following up with careful planning is essential to success. There are many factors to consider before applying for a business license. Consider what kind of cleaning jobs you’ll take on, what cleaning equipment you’ll need and what your business plan might look like.
Plan Your Business Out in Writing
If you’re thinking about getting outside investment for your company, a business plan is essential. This plan is a written document that describes in detail how your business will operate. Consider including the following in your business plan:
- Business activities
- The products and services you offer
- Marketing strategy
- Your financial plan
Even if you’re self-funding or bootstrapping it, it will be beneficial to spend time thinking through each section and writing it down. You’ll be able to hit the ground running with a roadmap for success.
3. Conduct Market Research
Identifying the right target market is an essential part of any business plan. In this step, you should determine what the current demand is for home cleaning and what potential customers are your demographic. You can conduct internet searches or talk to people you know who work in the industry. Below are some questions you should answer for your new business.
Questions To Ask For Your Marketing Plan Do you want to do residential cleaning? Commercial? Both? What are the demographics of your desired location? How much disposable income do they have? What competitors are already operating in your preferred area? What services are they offering? How much are they charging? What’s the total reachable market size? What percentage do you think you can capture? How easy will it be to acquire new customers? What areas or services will you offer? Is the area easy to get around? What cleaning products and equipment will you need to buy?
4. Estimate Your Earning Potential
Of course, making money is the ultimate goal of any business. But how much can you earn with a cleaning business?
If you’re thinking of a standard residential cleaning company, there are several factors to consider. The mean annual income for a house cleaner in 2023 is $29,580. That’s about $14.22 an hour, working 40 hours a week. Additionally, your clients may tip you, but that’ll depend on your work and how much they’re willing to give.
But you don’t just want to be a house cleaner. You want to be the business owner, although you might have to do a lot of the cleaning work until you’re ready or able to hire cleaners.
5. Set Your Prices
Cleaning companies charge anywhere from $25 to $90 per hour, depending on the home’s location, service and condition. If you’re in an upscale area providing a luxurious cleaning service, you might be able to charge more than standard house cleaning in a lower-income neighborhood.
If you charge $50 an hour for your service, that means you can make $400 to $500 per day per cleaner on your staff. This will, of course, depend on the type of cleaning and how many hours per day they work. So one cleaner could bring in over $100,000 per year if you can keep them busy.
If you had a team of three to five cleaners, you’re talking about annual revenues of $300,000 to $500,000 or more. When setting your prices also make sure to factor in costs of cleaning supplies, equipment, labor and overhead.
6. Register Your Business
Before you engage in any business activity, order business cards or even secure a business loan, you’ll want to make sure you complete all the necessary legal steps. This includes:
- Registering your business with your state
- Applying for relevant federal and state tax identification numbers
- Getting any local licenses
- Checking local ordinances
- Opening a business bank account to make and receive payments
You will likely need an Employer Identification Number, or EIN, from the IRS so you can file the relevant tax forms for your company.
7. Build Your Customer Base
After you’ve written your plan and registered your cleaning business, you’re ready to get to work. The next step is finding clients. Friends and family are great places to start.
You can also advertise your cleaning services on social media. You might create a blog or newsletter to discuss your benefits and promote your company. Once you’ve gotten your first few customers, you may also ask them for referrals.
Final Take To GO
There are many reasons why you might want to consider starting a cleaning business. For example, it’s one with low overhead, little to no operating costs and reliable demand. With low up-front costs compared to other businesses, it’s easy to start a cleaning business if you know where to begin.
- Starting a cleaning company can be a lucrative business if you want independence and sole proprietorship. Owning and operating a business isn't for everyone, so be sure that you're able and willing to tackle the challenges that await you. If you're successful, you'll have a profitable and rewarding business that also makes a difference in your customers' lives.
- -Decide if being a cleaning company business owner is right for you.
- -Conduct market research to determine who you'll serve, what cleaning products and services you'll offer and how much you'll charge.
- -Document your findings in a business plan that will act as a roadmap for your business.
- -Register your cleaning company and acquire all necessary tax IDs and local licenses.
- -Open a business banking account so that you can accept payments.
- -Find clients through word of mouth, digital marketing and referrals.
- -Do a great job so you keep long-term customers.
- You can start building a client base for your cleaning company by first reaching out to your local friends and family. By asking them to spread the word, you might get quite a few new clients. Other ways to get cleaning clients would be by marketing online and leaving your business cards at community centers, like libraries.
- -Residential cleaning
- -Commercial cleaning
- -Window cleaning
- -Pressure washing
- -Carpet cleaning
Scott Jeffries contributed to the reporting for this article.
Information is accurate as of April 24, 2023.
This article originally appeared on GOBankingRates.com : How To Start a Cleaning Business: 7 Easy Steps
- Publisher's Muse
The 3-Step Business Plan
- April 16, 2021
Act I: Decide
The hardest part, to decide.
To make the decision to actually start your journey. Sadly, it’s at the very beginning where most people and businesses fail.
They hesitate, research more, second guess, seek approval, look for permission, procrastinate, and then repeat the cycle.
Let me be clear – you already have everything you need to decide, but you need to do that first.
You don’t need approval or permission – just do it.
Embrace the market feedback, good, bad, and ugly, and don’t worry about failing, (the sooner the better) as it allows you to learn and refine along the way.
Remember, there are no magic success formulas, despite the buzzed-up tactic- pedaling, headline pusher-like biz gurus who scream into their digital megaphones with proclamations like the one at the top of this little ditty.
And don’t get addicted to an endless loop of advice-seeking – because marketing buzzards love to give advice.
And too many of them are salivating like a hungry dog to provide “professional” recommendations before understanding what problems you’re trying to solve in the world.
Can you imagine if your physician did that?
I’ll give you some sage-less advice that won’t cost you a penny but maybe be worth more than an ounce of gold…
…before you seek advice, invest that time into yourself…
…educate yourself, gain knowledge, understand the subject matter…
…thirst for knowledge about the audience, you seek to serve…
…what are their problems, fears, constraints, obstacles, limitations, hopes and desires?
But don’t get lost in the spin cycle so you never make a decision.
The ability to be decisive is a super-power that most people fail to understand.
It’s easier to hide behind the crowd and stay unnoticed than to stand out and say, “hello world, I’m here.”
The simple act of deciding will empower your spirit to move forward.
Just do it.
Act II: Act
Now that the hardest part is behind you, it’s time to act.
The Webster’s Dictionary defines an act as …
…the doing of a thing…
…the process of doing something.
Ah, that feels good right? And so simple.
Progress is at hand – you are now acting on your decision!
Best of all, you don’t need to pretend to be the smartest person in the room, (the market will do that for you.)
The market will tell you what’s working and what’s not – keep your eyes and ears open and soak it all in.
When some of your actions are received favorably by the market then that is your clue to double down. When they are not working, it’s time to adjust, refine and try again.
It’s in the acting where you’ll gain all the knowledge and experience, you’ll need.
Acting is how you liberate and free yourself from the confinement of standing still, waiting, and being stuck in indecision.
Ultimately, acting is how you earn autonomy …
…the self-directing freedom and independence…
…the ability to gain control of your future, your dreams, your desires…
…the power of forward progression.
Act III: Keep Going
I could have used a fancier word for step number three, but plain ‘ole English will work just fine here.
Be forewarned – this part isn’t easy.
In fact, it’s the part where most people and businesses fail.
They give up.
Or worse, they stopped doing what had worked in the past – perhaps falling prey to “shiny new object” syndrome.
The “keep going” part will test your resolve, your will, and your very soul.
But it is also where the “success” part lives – or “dies.”
You get to decide.
Here, it’s all about the “3 P’s.”
Persistence, perseverance, and patience.
When you “keep going” you get better at what you do!
It’s a built-in continuous improvement mechanism that by default creates a virtuous circle…
…a chain of events in which one desirable occurrence leads to another which further promotes the first occurrence and so on resulting in a continuous process of improvement, (thanks for the clarity Merriam-Webster.)
So, there you have it.
A (insert the verbose, bombastic, gibberish headline here) 3-Step business plan to get you in gear and moving forward.
After all, the very definition of progress is “a forward or onward movement (as to an objective or to a goal,) – a gradual betterment.”
A gradual betterment…
…who can argue with that?
To your greatness ~
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How to Prepare and Write the Perfect Business Plan for Your Company
Here's how to write a business plan that will formalize your company's goals and optimize your organization.
By Matthew McCreary • May 5, 2021
Are you preparing to start your own business but uncertain about how to get started? A business plan ought to be one of the first steps in your entrepreneurial journey because it will organize the ideas that have been spinning around in your brain and prepare you to seek funding, partners and more.
What is a business plan?
A business plan is a detailed document that outlines a company's goals and how the business, well, plans to achieve those goals over the next three or more years. It helps define expected profits and challenges, providing a road map that will help you avoid bumps in the road.
Stever Robbins writes in an Entrepreneur article titled, "Why You Must Have a Business Plan," that a business plan "is a tool for understanding how your business is put together…. Writing out your business plan forces you to review everything at once: your value proposition, marketing assumptions, operations plan, financial plan and staffing plan." But, a business plan is about more than just reviewing the past state of your business or even what your business looks like today.
Robbins writes that a well-written business plan will help you drive the future by "laying out targets in all major areas: sales, expense items, hiring positions and financing goals. Once laid out, the targets become performance goals."
The business plan can help your company attract talent and funding, because when prospects ask about your business, you already have an articulated overview to offer them. How they react can allow you to quickly understand how others see your business and pivot if necessary.
What should you do before you write your business plan?
It might sound redundant, but you actually need to plan your business plan. Business plans can be complicated, and you'll be held accountable for the goals you set. For example, if you plan to open five locations of your business within the first two years, your investors might get angry if you only manage to open two.
That's why it's essential that, before writing your business plan, you spend some time determining exactly which objectives are essential to your business. If you're struggling to come up with a list of goals on your own, Entrepreneur article "Plan Your Business Plan" offers some questions you can ask yourself to spark some inspiration.
How determined am I to see this venture succeed?
Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?
What's going to happen to me if this venture doesn't work out?
If it does succeed, how many employees will this company eventually have?
What will be the business's annual revenue in a year? What about in five years?
What will be the company's market share in that amount of time?
Will the business have a niche market, or will it sell a broad spectrum of goods and services?
What are my plans for geographic expansion? Should it be local or national? Can it be global?
Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?
If I delegate, what sorts of tasks will I share? Will it be sales, technical work or something else?
How comfortable am I taking direction from others? Can I work with partners or investors who demand input into the company's management?
Is the business going to remain independent and privately owned, or will it eventually be acquired or go public?
It's also essential to consider your financial goals. Your business might not require a massive financial commitment upfront, but it probably will if you're envisioning rapid growth. Unless you're making your product or service from scratch, you'll have to pay your suppliers before your customers can pay you, and as "Plan Your Business Plan" points out, "this cash flow conundrum is the reason so many fast-growing companies have to seek bank financing or equity sales to finance their growth. They are literally growing faster than they can afford."
How much financing will you need to start your business? What will you be willing to accept? If you're desperate for that first influx of cash, you might be tempted to accept any offer, but doing so might force you to either surrender too much control or ask investors for a number that's not quite right for either side.
These eight questions can help you determine a few financial aspects of your planning stages:
What initial investment will the business require?
How much control of the business are you willing to relinquish to investors?
When will the business turn a profit?
When can investors, including you, expect a return on investment?
What are the business's projected profits over time?
Will you be able to devote yourself full-time to the business?
What kind of salary or profit distribution can you expect to take home?
What are the chances the business will fail, and what will happen if it does?
You should also consider who, primarily, is going to be reading your business plan, and how you plan to use it. Is it a means of raising money or attracting employees? Will suppliers see it?
Lastly, you need to assess the likelihood of whether you actually have the time and resources to see your plan through. It might hurt to realize the assumptions you've made so far don't actually make a successful business, but it's best to know early on, before you make further commitments.
Related: Need a Business Plan Template? Here Is Apple's 1981 Plan for the Mac.
How to Write a Business Plan
Once you've worked out all the questions above and you know exactly what goals you have for your business plan, the next step is to actually write the darn thing. A typical business plan runs 15 to 20 pages but can be longer or shorter, depending on the complexity of the business and the needs of your venture. Regardless of whether you intend to use the business plan for self-evaluation or to seek a seven-figure investment, it should include nine key components, many of which are outlined in Entrepreneur 's introduction to business plans:
1. Title page and contents
Presentation is important, and a business plan should be presented in a binder with a cover that lists the business's name, the principals' names and other relevant information like a working address, phone number, email and web address and date. Write the information in a font that's easy to read and include it on the title page inside, too. Add in the company logo and a table of contents that follows the executive summary.
2. Executive summary
Think of the executive summary as the SparkNotes version of your business plan . It should tell the reader in as few words as possible what your business wants and why. The executive summary should address these nine things:
The business idea and why it is necessary. (What problem does it solve?)
How much will it cost, and how much financing are you seeking?
What will the return be to the investor? Over what length of time?
What is the perceived risk level?
Where does your idea fit into the marketplace?
What is the management team?
What are the product and competitive strategies?
What is your marketing plan?
What is your exit strategy?
When writing the executive summary, remember that it should be somewhere between one-half page to a full page. Anything longer, and you risk losing your reader's attention before they can dig into your business plan. Try to answer each of the questions above in two or three sentences, and you'll wind up with an executive summary that's about the right length.
Related: First Steps: Writing the Executive Summary of Your Business Plan
3. Business description
You can fill anywhere from a few paragraphs to a few pages when writing your business description, but try again to keep it short, with the understanding that more sections will follow. The business description typically starts with a short explanation of your chosen industry, including its present outlook and future possibilities. Use data and sources (with proper footnotes) to explain the markets the industry offers, along with the developments that will affect your business. That way, everyone who reads the business description, particularly investors, will see that they can trust the various information contained within your business plan.
When you pivot to speaking of your business, start with its structure. How does your business work? Is it retail, service-oriented or wholesale? Is the business new or established? Is the company a sole proprietorship, partnership or corporation? Who are the principals and who are your customers? What do the distribution channels look like, and how can you support sales?
Next, break down your business's offerings. Are you selling a physical product, SaaS or a service? Explain it in a way that a reader knows what you're planning to sell and how it differentiates itself from the competition (investors call this a Unique Selling Proposition, or USP, and it's important that you find yours). Whether it's a trade secret or a patent, you should be specific about your competitive advantage and why your business is going to be profitable. If you plan to use your business plan for fundraising, you can use the business description section to explain why new investments will help make the business even more profitable.
This, like everything else, can be brief, but you can tell the reader about your business's efficiency or workflow. You can write about other key people within the business or cite industry experts' support of your idea, as well as your base of operations and reasons for starting in the first place.
4. Market strategies
Paint a picture about your market by remembering the four Ps: product, price, place and promotion.
Start this section by defining the market's size, structure and sales potential. What are the market's growth prospects? What do the demographics and trends look like right now?
Next, outline the frequency at which your product or service will be purchased by the target market and the potential annual purchase. What market share can you possibly expect to win? Try to be realistic here, and keep in mind that even a number like 25% might be a dominant share.
Next, break down your business's plan for positioning, which relates to the market niche your product or service can fill. Who is your target market, how will you reach them and what are they buying from you? Who are your competitors, and what is your USP?
The positioning statement within your business plan should be short and to the point, but make sure you answer each of those questions before you move on to, perhaps, the most difficult and important aspect of your market strategy: pricing.
In fact, settling on a price for your product or service is one of the most important decisions you have to make in the entire business plan. Pricing will directly determine essential aspects of your business, like profit margin and sales volume. It will influence all sorts of areas, too, from marketing to target consumer.
There are two primary ways to determine your price: The first is to look inward, adding up the costs of offering your product or service, and then adding in a profit margin to find your number. The second is called competitive pricing, and it involves research into how your competitors will either price their products or services now or in the future. The difficult aspect of this second pricing method is that it often sets a ceiling on pricing, which, in turn, could force you to adjust your costs.
Then, pivot the market strategies section toward your distribution process and how it relates to your competitors' channels. How, exactly, are you going to get your offerings from one place to the next? Walk the reader step by step through your process. Do you want to use the same strategy or something else that might give you an advantage?
Last, explain your promotion strategy. How are you going to communicate with your potential customers? This part should talk about not only marketing or advertising, but also packaging, public relations and sales promotions.
Related: Creating a Winning Startup Business Plan
5. Competitive analysis
The next section in your business plan should be the competitive analysis, which helps explain the differences between you and your competitors … and how you can keep it that way. If you can start with an honest evaluation of your competitors' strengths and weaknesses within the marketplace, you can also provide the reader with clear analysis about your advantage and the barriers that either already exist or can be developed to keep your business ahead of the pack. Are there weaknesses within the marketplace, and if so, how can you exploit them?
Remember to consider both your direct competition and your indirect competition, with both a short-term and long-term view.
6. Design and development plan
If you plan to sell a product, it's smart to add a design and development section to your business plan. This part should help your readers understand the background of that product. How have the production, marketing and company developed over time? What is your developmental budget?
For the sake of organization, consider these three aspects of the design and development plan:
Start by establishing your development goals, which should logically follow your evaluation of the market and your competition. Make these goals feasible and quantifiable, and be sure to establish timelines that allow your readers to see your vision. The goals should address both technical and marketing aspects.
Once the reader has a clear idea of your development goals, explain the procedures you'll develop to reach them. How will you allocate your resources, and who is in charge of accomplishing each goal?
The Entrepreneur guide to design and development plans offers this example on the steps of producing a recipe for a premium lager beer:
Determine optimum malting process.
Gauge mashing temperature.
Boil wort and evaluate which hops provide the best flavor.
Determine yeast amounts and fermentation period.
Determine aging period.
Carbonate the beer.
Decide whether or not to pasteurize the beer.
Make sure to also talk about scheduling. What checkpoints will the product need to pass to reach a customer? Establish timeframes for each step of the process. Create a chart with a column for each task, how long that task will take and when the task will start and end.
Next, consider the costs of developing your product, breaking down the costs of these aspects:
General and administrative (G&A) costs
Marketing and sales
Professional services, like lawyers or accountants
The next section should be about the personnel you either have or plan to hire for that development. If you already have the right person in place, this part should be easy. If not, then this part of the business plan can help you create a detailed description of exactly what you need. This process can also help you formalize the hierarchy of your team's positions so that everyone knows their roles and responsibilities.
Finish the development and design section of your business plan by addressing the risks in developing the product and how you're going to address those risks. Could there be technical difficulties? Are you having trouble finding the right person to lead the development? Does your financial situation limit your ability to develop the product? Being honest about your problems and solutions can help answer some of your readers' questions before they ask them.
Related: The Essential Guide to Writing a Business Plan
7. Operations and management plan
Want to learn everything you'll ever need to know about the operations and management section of your business plan, and read a real, actual web article from 1997? Check out our guide titled, "Writing A Business Plan: Operations And Management."
Here, we'll more briefly summarize the two areas that need to be covered within your operations and management plan: the organizational structure is first, and the capital requirement for the operation are second.
The organizational structure detailed within your business plan will establish the basis for your operating expenses, which will provide essential information for the next part of the business plan: your financial statements. Investors will look closely at the financial statements, so it's important to start with a solid foundation and a realistic framework. You can start by dividing your organizational structure into these four sections:
Marketing and sales (including customer relations and service)
Production (including quality assurance)
Research and development
After you've broken down the organization's operations within your business plan, you can look at the expenses, or overhead. Divide them into fixed expenses, which typically remain constant, and variable, which will change according to the volume of business. Here are some of the examples of overhead expenses:
Maintenance and repair
Advertising and promotion
Packaging and shipping
Payroll taxes and benefits
Having difficulty calculating what some of those expenses might be for your business? Try using the simple formulas in "Writing A Business Plan: Operations And Management."
8. Financial factors
The last piece of the business plan that you definitely need to have covers the business's finances. Specifically, three financial statements will form the backbone of your business plan: the income statement, the cash-flow statement and balance sheet . Let's go through them one by one.
The income statement explains how the business can make money in a simple way. It draws on financial models already developed and discussed throughout the business plan (revenue, expenses, capital and cost of goods) and combines those numbers with when sales are made and when expenses are incurred. When the reader finishes going through your income statement, they should understand how much money your company makes or loses by subtracting your costs from your revenue, showing either a loss or a profit. If you like, you or a CPA can add a very short analysis at the end to emphasize some important aspects of the statement.
Second is the cash-flow statement, which explains how much cash your business needs to meet its obligations, as well as when you're going to need it and how you're going to get it. This section shows a profit or loss at the end of each month or year that rolls over to the next time period, which can create a cycle. If your business plan shows that you're consistently operating at a loss that gets bigger as time goes on, this can be a major red flag for both you and potential investors. This part of the business plan should be prepared monthly during your first year in business, quarterly in your second year and annually after that.
Our guide on cash-flow statements includes 17 items you'll need to add to your cash-flow statement.
Cash. Cash on hand in the business.
Cash sales . Income from sales paid for by cash.
Receivables. Income from collecting money owed to the business due to sales.
Other income. The liquidation of assets, interest on extended loans or income from investments are examples.
Total income. The sum of the four items above (total cash, cash sales, receivables, other income).
Material/merchandise . This will depend on the structure of your business. If you're manufacturing, this will include your raw materials. If you're in retail, count your inventory of merchandise. If you offer a service, consider which supplies are necessary.
Direct labor . What sort of labor do you need to make your product or complete your service?
Overhead . This includes both the variable expenses and fixed expenses for business operations.
Marketing/sales . All salaries, commissions and other direct costs associated with the marketing and sales departments.
Research and development . Specifically, the labor expenses required for research and development.
General and administrative expenses. Like the research and development costs, this centers on the labor for G&A functions of the business.
Taxes . This excludes payroll taxes but includes everything else.
Capital. Required capital for necessary equipment.
Loan payments. The total of all payments made to reduce any long-term debts.
Total expenses. The sum of items six through 14 (material/merchandise, direct labor, overhead, marketing/sales, research and development, general and administrative expenses, taxes, capital and loan payments).
Cash flow. Subtract total expenses from total income. This is how much cash will roll over to the next period.
Cumulative cash flow . Subtract the previous period's cash flow from your current cash flow.
Just like with the income statement, it's a good idea to briefly summarize the figures at the end. Again, consulting with a CPA is probably a good idea.
The last financial statement is the balance sheet. A balance sheet is, as our encyclopedia says, "a financial statement that lists the assets, liabilities and equity of a company at a specific point in time and is used to calculate the net worth of a business." If you've already started the business, use the balance sheet from your last reporting period. If the business plan you wrote is for a business you hope to start, do your best to project your assets and liabilities over time. If you want to earn investors, you'll also need to include a personal financial statement. Then, as with the other two sections, add a short analysis that hits the main points.
9. Supporting documents
If you have other documents that your readers need to see, like important contracts, letters of reference, a copy of your lease or legal documents, you should add them in this section.
Related: 7 Steps to a Perfectly Written Business Plan
What do I do with my business plan after I've written it?
The simplest reason to create a business plan is to help people unfamiliar with your business understand it quickly. While the most obvious use for a document like this is for financing purposes, a business plan can also help you attract talented employees — and, if you share the business plan internally, help your existing employees understand their roles.
But it's also important to do for your own edification, too. It's like the old saying goes, "The best way to learn something is to teach it." Writing down your plans, your goals and the state of your finances helps clarify the thoughts in your own mind. From there, you can more easily lead your business because you'll know whether the business is reaching the checkpoints you set out to begin with. You'll be able to foresee difficulties before they pop up and be able to pivot quickly.
That's why you should continue to update your business plan when the conditions change, either within your business (you might be entering a new period or undergoing a change in management) or within your market (like a new competitor popping up). The key is to keep your business plan ready so that you don't have to get it ready when opportunity strikes.
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How to Write a Business Plan
Last Updated: October 30, 2022 References Approved
This article was co-authored by Keila Hill-Trawick, CPA . Keila Hill-Trawick is a Certified Public Accountant (CPA) and owner at Little Fish Accounting, a CPA firm for small businesses in Washington, District of Columbia. With over 15 years of experience in accounting, Keila specializes in advising freelancers, solopreneurs, and small businesses in reaching their financial goals through tax preparation, financial accounting, bookkeeping, small business tax, financial advisory, and personal tax planning services. Keila spent over a decade in the government and private sector before founding Little Fish Accounting. She holds a BS in Accounting from Georgia State University - J. Mack Robinson College of Business and an MBA from Mercer University - Stetson School of Business and Economics. There are 10 references cited in this article, which can be found at the bottom of the page. wikiHow marks an article as reader-approved once it receives enough positive feedback. This article received 83 testimonials and 93% of readers who voted found it helpful, earning it our reader-approved status. This article has been viewed 2,293,688 times.
If you’re interested in starting your own business, by now you probably know that writing a business plan is one of the first steps. But what should a business plan include? How detailed should it be? Do you need to do research first? Don’t worry—below we’ll answer all of your questions and walk you through putting together your first business plan from start to finish!
Doing Your Homework
- Is there a viable market for the product or service you want to sell?
- How old are your potential customers?
- What do they do for a living?
- Is your product or service attractive to a particular ethnic or economic population?
- Will only wealthy people be able to afford it?
- Does your ideal customer live in a certain type of neighborhood or area?
- How many car mechanics are in need of soap in any given community?
- How many children in the United States are currently under the age of eight?
- How much soap will they use in a month or a year?
- How many other soap manufacturers already have a share of the market?
- How big are your potential competitors?
- Don't aim for the best of everything at the beginning. You can forgo the expensive trimmings of an office of a more well-established company and stick to the basics at the beginning. Get what is affordable, works and is actually needed and don't buy frills.
- Don't lose heart if you discover some, or even all, of your ideas have been adequately covered by the market. Don't ignore this reality; instead, work with it. Can you still do a better job or provide a better widget than your competitors? In many cases, it's likely that you can provided you know the market well and how to add value in ways your competitors are not doing. In other cases, it may be a case of focusing more narrowly or more broadly than your competitors are doing.
Structuring Your Business
- What will your product or service enable people to do better, more cheaply, more safely, or more efficiently? Will your restaurant make people’s palates delirious with new taste sensations? Will your new mousetrap help people capture mice without feeling sick to their stomachs? Will your new bubblegum scented bubble bath revolutionize the way children agree to take nightly baths?
- Your competitive advantage may include designing special features not found in rival products. It may entail superior service characteristics such as speedier delivery, a lower price, or more attentive sales people––these are never to be sniffed at as possible winning ways, as many companies grow complacent and can be overtaken by giving customers experiences that are better than the average expectations. Even where your product or service is already well established, perhaps you’re establishing an image or brand of exceptional quality or reputation.
- Keep in mind that your initial plans will undoubtedly change as your business grows. You may need to hire more managers to supervise your expanding staff or to set up new departments to meet new customer demands. Projected growth and expansion for your company should be mentioned in your business plan, but it’s not the primary focus. For now, you want to secure help in getting started and convince your funding sources that you will become profitable.
- Investors will want to know if you’re capable of running the business. Do you need to bring in experienced managers right away? Will you keep some of the existing employees or hire all new people? And where do you find these potential employees?
- Funding sources will also want to know if any of your partners expect to work alongside you or if their obligations are only financial. Your plan will need to specify the key management jobs and roles. Positions such as president, vice presidents, chief financial officer, and managers of departments will need to be defined along with stating who reports to whom.
- Consider how will you reach your customers.  X Research source What will you say to persuade and convince customers that your product or service is better value, more timely, more useful, etc. to the consumer than the rival product or service? If it currently has no rival, how will you properly explain the purpose of and the consumer's need for the product?
- What advertising and promotional efforts will you employ? For example, two for the price of one specials or free coupons inside those same kid-oriented cereal boxes? Where can you locate lists of the greatest concentrations of children under the age of eight or whatever group constitutes your market?
- What will your basic sales philosophy be? Building long-term relationships with a few major clients or developing a clientele of many short-term customers?
Writing the Business Plan
- Title Page and Table of Contents
- Executive Summary , in which you summarize your vision for the company
- General Company Description , in which you provide an overview of your company and the service it provides to its market
- Products and Services , in which you describe, in detail, your unique product or service
- Marketing Plan , in which you describe how you'll bring your product to its consumers
- Operational Plan , in which you describe how the business will be operated on a day-to-day basis
- Management and Organization , in which you describe the structure of your organization and the philosophy that governs it
- Financial Plan , in which you illustrate your working model for finances and your need from investors
- Sustainability Plan , in which you consider how your business's operations in the ecological, social, and economic context will create long-term value for society.  X Research source
- At first, do not worry about capitalization, punctuation, and grammar. All you need to worry about is putting your ideas down on paper. Once you have a general form, you can spend time proofreading your plan and correcting mistakes. Have someone else read over it for you and take heed of their comments.
- The accuracy of your financial figures and projections is absolutely critical in convincing investors, loan sources, and partners that your business concept is worthy of support. The data must also be scrupulously honest and extremely clear.
- Since banks and many other funding sources will compare your projections to industry averages in the R.M.A data, in the United States you can use the R.M.A figures to test your projections before the bank does.
Sample Business Plans
- Many sources exist for finding information for your business plan. Your local library and the internet are always helpful sources. If you live near a university, you may be able to schedule an appointment with one of the college's professors. The professor may be able to give helpful insight. ⧼thumbs_response⧽ Helpful 1 Not Helpful 0
- There are a few valuable online archives of business plans that feature companies which have successfully penetrated the market based on a well defined and executed business (and marketing) plan. Take the time to study the market through a successful company's eyes and consider what your company will offer that distinguishes your product or service from the rest. Be certain about what gives your business the competitive edge. ⧼thumbs_response⧽ Helpful 1 Not Helpful 0
- Make sure you cite your information. This way you will have support for any statistics you put into your business plan. ⧼thumbs_response⧽ Helpful 1 Not Helpful 0
- Do not submit your draft business plan to potential investors! However, it is advisable to give the executive summary instead of the whole plan after it is completed. Sometimes, busy investors may not have the time to look at an entire plan, which can sometimes be up to 50 pages. ⧼thumbs_response⧽ Helpful 65 Not Helpful 12
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- ↑ https://extension.psu.edu/developing-a-business-plan
- ↑ https://www.extension.purdue.edu/extmedia/ec/ec-735.pdf
- ↑ https://sbdc.siu.edu/resources/writing-a-business-plan.php
- ↑ https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan
- ↑ Keila Hill-Trawick, CPA. Certified Public Accountant. Expert Interview. 30 July 2020.
- ↑ https://www.rmahq.org/who-we-are/
- ↑ https://www.scu.edu/mobi/business-plans/
- ↑ https://www.ofm.wa.gov/state-human-resources/workforce-data-planning/workforce-planning/introduction-workforce-planning
- ↑ https://www.ictsd.org/how-should-sustainability-be-considered-in-a-business-plan/
- ↑ https://www.investopedia.com/university/business-plan/business-plan7.asp
About This Article
To write a business plan, start with an executive summary that lays out your grand vision for your business. Follow that with a section that describes what products and services your company will offer. Then, write a marketing section where you detail how you're going to inform people about your business. You'll also want to include a section on your business model and how it will operate. Finally, conclude your business plan by letting investors know what you need from them. For help with doing research for your business plan, read the article! Did this summary help you? Yes No
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OpenAI's ChatGPT can write cover letters, pass MBA exams, plan trips, and more — here's how to use it
- ChatGPT has taken the internet by storm since it launched in November.
- The AI-powered chatbot can do everything from pass MBA exams to successfully negotiate a raise .
- If you haven't tried it yet, here's a step-by-step walkthrough of how to access and use ChatGPT.
Go to chat.openai.com in your internet browser. The site will ask you to sign up with a new account or log in if you already have one.
During peak usage times, you may not be able to access ChatGPT but you can try again another time (often later in the day) until you get in. The at-capacity notice always comes with some type of ChatGPT-generated message about the site's status, such as the guided meditation seen here.
You can also enter your email to be notified when the site is back up and running.
Once you can access the site, you can make an account using an email address, or use ChatGPT through your Google or Microsoft account. You'll need to enter your phone number later as well.
Once you're logged in, you'll see a disclaimer warning that since this is a free research preview, ChatGPT "may occasionally generate incorrect or misleading information and produce offensive or biased content" and is "not intended to give advice."
Another disclaimer follows: Since the public's use of ChatGPT is supposed to help improve the chatbot, anything you tell it may be reviewed, so don't share anything sensitive.
Lastly, OpenAI says you can help improve ChatGPT by choosing to thumbs-up or thumbs-down any given response, or by sharing feedback on their Discord server.
After you click through that last pop-up message, you'll see ChatGPT's home page, which lists some of the chatbot's capabilities and limitations, as well as a few examples of what it can do. You can talk with ChatGPT by using the search bar at the bottom of the page.
Once you ask a question there, ChatGPT will start answering in a new chat.
If you want to modify your question, hover over it, and an icon of a pen and paper will appear to the right. Click on it, make your changes to the question, and click "Save & Submit."
As the pop-up mentioned before, you can give feedback on whether a response was helpful or not by clicking the thumbs up or thumbs down option to the right of an answer.
You can also click "Regenerate response" at the bottom of the page to see another answer to the same question.
ChatGPT auto-suggests a name for every chat to store it, so you can come back to it later. You can rename the chat by clicking on the pencil icon, or delete the chat by clicking on the trash can. To continue any chat, just keep typing in the search bar at the bottom of the page. If you want to create a new chat (say, to organize various chats on different topics), click "New Chat" in the top left corner.
If you want to delete multiple chats at once, click "Clear conversations" on the bottom left.
Though ChatGPT is free to use, there's also a paid subscription version, ChatGPT Plus, that you can get if you want to upgrade.
It costs $20 a month and gives you access whenever, even during peak times when free users may get shut out. It also gives you a faster response speed and priority access to newly developed features.
Since the launch of ChatGPT, another AI chatbot has come on the scene, this time on Microsoft's revamped Bing search engine.
If you want to give the new Bing a whirl, you can find instructions on how to access it here .
Typically, a strategic plan will include your company's vision and mission statements, your long-term goals (as well as short-term, yearly objectives), and an action plan of the steps you're going to take to move in the right direction. Your strategic plan document should include: Your company's vision Your company's mission statement
The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may ...
Brainstorm Your Business Goals Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work...
The business plan process includes 6 steps as follows: Do Your Research Strategize Calculate Your Financial Forecast Draft Your Plan Revise & Proofread Nail the Business Plan Presentation We've provided more detail for each of these key steps below. 1. Do Your Research
Strategic planning: Realize your company's potential 2-minute read Share Strategic planning is essential for plotting the future of your business-but the process can sometimes seem lengthy and complicated. This simple infographic clearly sets out the different stages of the strategic planning process, explaining objectives and targets at each step.
The crucial steps to business planning. Create a vision for your business. Research the industry. Identify your customer. Build a market analysis. Specify the products and services. Produce a marketing plan. Generate an operational plan. Structure the management and organizational teams.
Business Growth Plan Step 1: Align Your Team to a Single Goal The first step is to align your team to a single goal and AVOID multiple simultaneous projects. Instead of trying to achieve many different things at once, it's much better to focus on one goal at a time. And don't move on to the next goal until you've achieved the first one.
Outline your marketing and sales plan. 7. Perform a business financial analysis. 8. Make financial projections. 9. Add additional information to an appendix. A business plan is a document that ...
Use an organizational chart to lay out who's in charge of what in your company. Show how each person's unique experience will contribute to the success of your venture. Consider including resumes and CVs of key members of your team. Service or product line Describe what you sell or what service you offer.
Download a free one-page plan template to write a useful business plan in as little as 30 minutes. Explore over 500 free real-world business plan examples from a wide variety of industries to inspire and guide your own plan. Try the business planning and growth tool trusted by over 1 million business owners.
This blog takes a look at the core steps that we follow to craft strategic plans for our clients. Let's take a look. 1. Research Every plan that NMBL produces, begins with thorough research. A proper strategic plan is tailored to fit an organization in every aspect.
This is typically one of the first pieces of the plan to be written. 3. Market analysis and opportunity. Research is key in completing a business plan and, ideally, more time should be spent on research and analysis than writing the plan itself. Understanding the size, growth, history, future potential, and current risks inherent to the wider ...
Based on that, make a marketing plan, operations plan, and cost structure for your business at least for the first few years of your business. This step should help you understand what resources would be used to bring your business plan to life. 3. Formulate your Financial Forecasts
The Strategic Planning Process in Three Basic Steps 5.30.2019 July 28, 2021 Posted by Rick Gould CPA, M.S., J.D. It is impossible to provide an all-encompassing example of how a firm should approach strategic planning .
Concept and design: The ideation phase, where a product's requirements are defined based on factors including competitor analysis, gaps in the market, or customer needs. Develop: The detailed design of the product will be created, along with any necessary tool designs.This phase includes validation and analysis of the planned product, as well as prototype development and piloting in the field.
All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.
Goals should be stated in measurable terms where possible. For example, a goal should be "to increase sales by 15 percent in the next quarter" not "increase sales as much as possible." Develop premises Planning requires making some assumptions about the future.
Starting a cleaning business entails planning, some financial decisions and completing legal steps. This guide will walk you through all the steps necessary to start a cleaning business in 2023.
The 3-Step Business Plan A mega-valuable, dangerously simple, ingenious, user friendly, easy-to-implement, bulletproof breakthrough, 3-step plan that any business can use to kick-start and accelerate their success! By Warren Dow April 16, 2021 Act I: Decide The hardest part, to decide. To make the decision to actually start your journey.
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That said, a typical business plan will include the following benchmarks: Product goals and deadlines for each month. Monthly financials for the first two years. Profit and loss statements for the first three to five years. Balance sheet projections for the first three to five years. Startups, entrepreneurs, and small businesses all create ...
Add in the company logo and a table of contents that follows the executive summary. 2. Executive summary. Think of the executive summary as the SparkNotes version of your business plan. It should ...
Make a chart of the most expensive and least expensive sites by location and square footage. Then estimate how much space you require and how much money you'll need to allow for rent. 6. Determine your start-up cost.  Make a list of all the tangible and intangible resources you need to get your business going.
Create your brand. Start manufacturing. Test your product. Launch your product. Scale up. 1. Decide on your niche. Starting a clothing business is a very personal journey. You're probably a creative person, with something different to offer in a fast-moving industry.
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