the conclusion of a business plan should also include

Business Plan Conclusion: Summary & Recap

You’ve written your business plan, but now you want to wrap it up to make a lasting impact on your reader. In this article, we will define the conclusion to a business plan as well as provide some tips to help you attract and seal the deal with potential investors and lenders.  

What is a Business Plan Conclusion?

This business plan conclusion is a concise summary and recap of all of the components of a business plan , but especially the executive summary. It summarizes your business plan in 2-3 paragraphs, with an emphasis on the most important points.  

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Is the Business Conclusion Necessary?

It’s good practice for business plans, but not always necessary to be successful in obtaining funding.

If you have a stellar executive summary, it may be unnecessary.

If the business conclusion is written well enough, it can serve as an executive summary of sorts – a short recap that provides more detail than the business plan as a whole, but only includes the most important points. It could also serve as an executive summary that is more concise than an actual executive summary.  

How To Write a Conclusion for Your Business Plan

The conclusion of your business plan is the last thing people read before deciding to invest in you and your business, so it needs to make a lasting impression.  

Determine Location

Depending on your intended audience, there are two common places for the conclusion. If your plan is meant for internal purposes, you may have the conclusion at the end of the entire document. However, if you are seeking funds from investors, you want to place the conclusion at the end of the Executive Summary, increasing the chances that it is actually read.

Review & Concisely Recap 

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Startups might include the following information:.

• Funding requirements
• Service or benefit to the investor
• Target market and audience
• How products or services solve the target market’s problem
• Marketing strategy
• Competitive advantage
• Management team experience
• Financial projections
• Launch plan

Established businesses might include information in their conclusions such as:

• Mission statement
• Company’s history
• Products and/or services
• Historical growth data
• Financial summary
• Company’s goals

Summarize the 3-5 points in a couple of paragraphs. You don’t need to summarize everything that happened in your business plan, just the most important points of the business plan.

Support Your Claims with Stats and/or Visuals

Establish a Call-To-Action (CTA)

Proofread & Spell-Check

The conclusion needs to give your readers a sense of closure by wrapping up all loose ends while making your last pitch effort to obtain the money your business may need.

Business Plan Conclusion Example

Use this conclusion example to help you with how to end a business plan, but keep in mind to make it relevant to your target audience, industry, and funding requirements:

Expanding into the Seattle metro area will allow Skyridge to provide its cutting-edge technology to more people who need it. Purchasing the fabrication plant in Seattle allows us to produce all of our products in-house and in one location, delivering them promptly and efficiently to the northwestern region.

We have the power to change the way people use technology, and we want [Investor’s Name] to be a part of it. By investing in Skyridge’s growth, [Investor’s Name] will benefit in the following ways:

• Inclusion with a startup that has seen XXX% growth over the past X years and our company’s management team with XX years of experience in the technology industry
• Contribution to Seattle’s economic growth and its citizens’ access to technology that enhances their lives
• Participation in company planning meetings and receive an XX% share in all profits earned

We can add to the number of lives Skyridge’s technologies impact, generate more job opportunities in the region, and alter the technology sector if we work together. If you agree with our vision for a better future for everyone, join us.

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Related Articles To Help You Write a Business Plan

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

Other Helpful Business Plan Articles & Templates

Writing an Effective Business Plan Conclusion: Tips & Examples

Do you need help concluding the business plan that you have worked so hard to create? A well-crafted business plan conclusion is essential for setting the tone for the entire document, and summarizing the key points that justify why the business will be successful. In this article, we will explore how to write an effective business plan conclusion that will ensure that your plan is read and taken seriously.

How to End a Business Plan?

The conclusion of your business plan should briefly summarize the main points of your argument. It should state why you believe your business will succeed and explain how you intend to achieve your goals. A business plan conclusion should cover the opportunity, highlight the strengths of your plan, summarize your vision, and remind the reader why your business is in a unique position to succeed.

A template example of a solid business plan conclusion follows:

• Opportunity: Explain the opportunity that your business is capitalizing on and why it is attractive.
• Key Strengths: Highlight the key strengths of your plan, such as your competitive advantage and any unique selling points.
• Vision: Summarize your vision for the business and its future.
• Unique Position: Remind the reader why your business is in a unique position to succeed.

It is important to keep your business plan conclusion succinct and to the point. It should be no longer than a few paragraphs, and should be a clear and concise summary of the entire document.

At Atlantabusinesses.com, we understand how important it is to have a clear and effective business plan conclusion. We are experts in the field of business brokering, and we can help you through the entire process of buying or selling a business. Visit our website for more information, and for answers to all your questions about selling a business and about business brokers.

What is the final stage of the business plan?

Conclude your business plan with a presentation for obtaining funding, and provide any relevant data, graphs, and charts to back it up. Make it explicit how much money you are asking for from investors—whether it is equity, a collaboration, or a loan.

What is the appropriate way to conclude a business plan letter?

What should be included in the concluding section of a business plan.

It should also include a description of the problems you are trying to solve, a review of your marketing strategy, and an assessment of the financials. The best way to write an executive summary is to write it after you have a thorough understanding of your entire plan and can succinctly summarize it. The executive summary should include your company’s mission statement, a description of the products and services you offer or plan to offer, an overview of the problems you are aiming to solve, an assessment of your marketing strategy and an overview of the financials.

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How to Write a Business Plan Conclusion?

Business Plan Template

• Vinay Kevadia
• June 20, 2024

Completed writing your business plan?

Let’s wrap it up with a conclusion that ends your business plan on an exciting and positive note. Not to forget—a conclusion that convinces the readers about your business’s potential to succeed.

In this blog post, you will learn exactly how to write a conclusion of a business plan and get an example to guide you.

Let’s get started.

What is a business plan conclusion?

A business plan conclusion is the final section concluding very concisely the points discussed in your business plan.

It reinforces the business’s strengths and feasibility and reassures the readers of potential business success. It clarifies the reader’s benefit of associating with your business and convinces them of a profitable investment opportunity.

A conclusion is about 3-4 paragraphs long and is designed to drive action and leave a lasting impression on reader’s minds.

Business plan conclusion vs. executive summary

Many people confuse a conclusion and an executive summary to be the same. However, they are not. Let’s see how.

• An executive summary is a broad overview of your entire business plan. The conclusion, on the other hand, is a concise summary reinforcing the key takeaways of your plan.
• While an executive summary introduces the readers to your business idea, a conclusion convinces them to take the desired action.
• An executive summary is a preview of what the plan will be about. The conclusion, on the contrary, is a review of what the plan has discussed.
• An executive summary is concise. However, conclusions are more concise covering only the aspects that can drive decisions and actions.

Clear enough, right? Let’s move ahead.

Why is a business plan conclusion important?

Although a conclusion is not mandatory, it is an important aspect of a business plan. It communicates your passion and commitment to a business idea and convinces the readers of your ability to succeed.

A conclusion synthesizes the key insights of your business plan focusing on aspects such as market analysis , business strategy, competitive advantage, and milestones. It reinforces your plan’s vision and establishes your strategic position amongst readers.

A well-crafted conclusion will drive desired actions from the readers. It can seal the deal and fulfill your objective of writing a business plan.

How to write a conclusion for your business plan?

From what information to include to where to place the conclusion—this section will guide you to write an impactful conclusion for your business plan.

1. Choose the right placement

There are two places for you to place your conclusion. It can either be after your executive summary or at the end of the document.

The location changes depending on who you plan to present your business plan with.

If you prepare a business plan for investors , placing your conclusion after the executive summary will increase the likelihood of it getting read.

However, the conclusion should be placed at the end for business plans that are prepared for internal use and business partners. Conclusion in this case reviews and emphasizes the company’s strengths.

2. Place the right information

The information in your conclusion changes depending on your audience and the intent of the business plan.

For instance, if you’re a new business trying to secure funds, your conclusion can synthesize the key details about the following:

• Funding demands
• Benefit to the investors
• Target market and target customers
• Solution for the problem
• Marketing strategy
• Team members and their expertise
• Financial projections
• Competitive advantage
• Launch plan

However, if you’re a small business trying to grow or use this plan for internal use, consider covering key insights from the following aspects:

• Mission statement
• History and the milestones
• Data supporting growth
• Industry trends
• Financial summary
• Long-term goals and objectives

These are the details you can cover while writing your conclusion. However, including every bit of these in your conclusion is unnecessary.

Think from your reader’s perspective. Determine the information that would excite them about your business and form your conclusion accordingly.

3. Include stats and visuals

Now that you’ve decided on the placement and information to be included in your conclusion, it’s time to make your conclusion zesty.

How? Get the facts and stats that would support the claims you make in your conclusion.

For instance, if you’re promising growth, show market research that supports your claim. Again, if you’re promising a certain return on investment, include the statistics that can make investors believe you.

Sway away from vague statements and assumptions. And, if you feel that the statistic would be best absorbed through visual charts or graphics, don’t be afraid to add one.

4. Add a CTA

If you want the readers to take action, guide them. Add a crisp clear call to action(CTA) and explain how the readers would benefit from taking that action.

For instance, 

• Join us as a silent partner by investing in Beanco.
• Invest $2 M and secure a 20% stake in equity.
• Support our growth by sharing references.

Don’t beat around the bush. If you are making a funding request, be unapologetic. And even if not, your CTA should suggest how a reader can support your growth.

5. Review and proofread

Once your conclusion is ready, re-read and proofread it for any grammatical or spelling errors. Fix the flow and remove fluff to make your conclusion crisp and persuasive.

Get your friends and business partners to read the conclusion and check if the message you are trying to send is crisp and clear. If not, make the necessary adjustments.

Business plan conclusion example

Use this business plan conclusion as a reference and tailor yours keeping in mind the needs, objectives, and audience for your business plan.

Launching EcoRide Electric Scooters will revolutionize urban transportation by providing an eco-friendly, efficient, and affordable solution for city commuters. Our innovative design and advanced technology will set us apart in the rapidly growing market for sustainable transport options.

We are poised to make a significant impact on urban mobility, and we want [Investor’s Name] to be a foundational part of our journey. By investing in EcoRide Electric Scooters, [Investor’s Name] will benefit in the following ways:

• Joining a groundbreaking startup with a vision to reduce urban pollution and traffic congestion, led by a passionate team with over 20 years of combined experience in the automotive and tech industries.
• Supporting the development and deployment of cutting-edge electric scooters, contributing to a cleaner, greener urban environment.
• Gaining equity in a high-potential startup with a scalable business model and the potential for significant returns as we expand to new markets.

Together, we can transform urban transportation, reduce carbon footprints, and create a sustainable future for city dwellers. If you share our vision for a cleaner, more efficient urban commute, partner with us.

Let’s conclude your business plan

Now that you have understood the process and referred to an example, let’s conclude your business plan.

Identify the information you must highlight, encapsulate it into a powerful conclusion, and pair it with an even more powerful CTA.

However, remember that the conclusion just seals the deal. It’s the business plan that will hook your readers till the end. With Upmetrics’s AI business plan generator , you can create truly engaging business plans in just about 10 minutes.

So, improvise your business plan, sum it up with a convincing conclusion, and send over your business plan to your potential investors to secure funding.

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Frequently Asked Questions

How long should a business plan conclusion be.

A conclusion of your business plan can be anywhere between 2-3 paragraphs long. In this ideal length, you must outline the key takeaways of your plan, clarify the next step to the readers, and explain to them the benefit of supporting your business.

What is the most important part of a business plan conclusion?

A CTA is the most important part of the conclusion, especially if you are trying to raise funds. However, if you are writing a plan for internal purposes, focus more on synthesizing the key essentials of a plan.

Can I include new information in the conclusion?

A conclusion does not introduce any new information. It simply reinforces the business’s position and convinces the readers to take the desired action for one last time. For instance, offer funding for your business.

Is it necessary to include a call to action in the conclusion?

It is very important to add a crisp clear CTA while concluding your plan. You can’t expect the readers to invest in your business or help you grow if you don’t clarify the steps to take action.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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Crafting a Winning Business Plan Conclusion Example

When developing a comprehensive business plan, every section plays a pivotal role in conveying your business’s vision and strategy. However, the conclusion is particularly impactful, serving as the final opportunity to leave a lasting impression on readers. This critical segment wraps up your plan, reinforcing the key concepts you’ve presented throughout the document. Moreover, an effective conclusion not only summarizes essential points but also inspires action, encouraging potential investors or partners to engage with your business further. With an impressive business plan conclusion example, you can effectively summarize your objectives and motivate stakeholders to join your journey.

Your conclusion should reflect the essence of your business while making a strong case for its potential. It is the element of your plan that can convert interest into actionable steps, whether that means securing funding, forming strategic partnerships, or generating enthusiasm among your team. In this article, we will explore the importance of a strong conclusion, the elements necessary to make it impactful, and provide you with effective examples that can guide you in writing your own. Understanding how to craft this segment can significantly improve your overall business plan, making it more compelling and persuasive. Let’s delve into how to create a conclusion that resonates with your audience.

Effective Business Plan Conclusion Examples to Inspire Your Own

Creating a solid business plan is crucial for anyone looking to start or grow a business. The conclusion often gets overlooked but is essential in tying together your business plan. An effective conclusion not only reiterates your key points but also provides inspiration and a call to action for your readers. Here’s how to craft an impactful business plan conclusion.

The Importance of a Strong

A well-crafted conclusion gives your audience a lasting impression. It summarizes your entire plan, ensuring no key points get lost in details. Furthermore, it can guide potential investors and partners in understanding the direction of your business. Here are some critical elements to include:

• Recap Key Highlights: Remind readers of your unique selling propositions and financial projections.
• State Your Vision: Share where you see your business headed, emphasizing growth and sustainability.
• Call to Action: Encourage readers to take the next step, whether that’s investing, partnering, or simply reaching out for more information.

Examples of Effective Business Plan Conclusions

Let’s look at some practical examples to see how you can articulate your own conclusion effectively.

Example 1: The Visionary Approach

“In summary, [Your Business Name] aims to revolutionize the way consumers engage with fitness. Our innovative platform connects users to personalized training programs powered by top-tier fitness experts. As we move forward, our goal is to achieve a 200% growth in our user base within the next two years. We invite you to join us on this exciting journey and be a part of transforming the fitness industry.”

Example 2: The Financial Focus

“To conclude, our projections indicate that [Your Business Name] will not only break even within the first year but will also generate a profit margin of 30% by the end of year three. With your support, we can fast-track our growth and dominate the market. Let’s work together to make this vision a reality.”

Example 3: The Community-Oriented Approach

“As we have outlined, [Your Business Name] is committed to building a community-centered business model that values customer feedback and innovation. By promoting sustainability and ethical practices, we will establish a brand that resonates with our consumers. We encourage you to come aboard and help fuel this meaningful change.”

Crafting Your Own Business Plan

When writing your conclusion, keep in mind the reader’s perspective. Here are some techniques you can use:

• Keep It Concise: Avoid unnecessary jargon. Provide a straightforward summary that is easy to understand.
• Show Enthusiasm: Use positive language that reflects your passion for your business. This feeling can be contagious.
• Be Clear: Ensure your call to action is specific. Mention how you would like the reader to respond or engage with you.

Final Thoughts

An effective conclusion should inspire potential investors and partners to act. Utilize these examples to guide your writing, ensuring that your business plan radiates clarity and confidence. Remember, the final impression can often matter more than the details. Engage your readers and inspire them to see the potential in your business.

By incorporating these strategies, you will create a powerful conclusion that not only summarizes your business plan but also enhances its overall impact. Your conclusion should leave readers excited about the future of your business and eager to be a part of it.

Use these examples as a template or inspiration while crafting your own business plan conclusion. Keep your core message clear, passionate, and inviting. This approach will help you connect with your audience on a deeper level while encouraging them to take the necessary steps to take action.

Key Components of a Strong Business Plan

A strong business plan is crucial for anyone looking to start or expand their business. It serves as a roadmap, guiding you through the various steps of your business journey. It also helps attract investors and secure financing by showcasing your vision and the viability of your business. To create an effective business plan, there are several key components you should include.

Executive Summary

The executive summary is the first part of your business plan, although it is often written last. It provides a brief overview of your entire plan. This section should highlight your business idea, the mission statement, your target market, and the key financial information. Keep it concise to grab the reader’s attention while providing essential details on your business goals.

Business Description

In the business description section, elaborate on what your business does and what products or services you offer. Include information about the industry landscape, your business structure (e.g., LLC, corporation), and your unique selling proposition. This section lets potential investors understand the purpose and scope of your business.

Market Analysis

Your market analysis provides insight into your target market and the competitive landscape. This section should include:

• Industry Overview: Analyze the current state of your industry, including trends and growth potential.
• Target Market: Describe your ideal customers, their demographics, and behaviors.
• Competitive Analysis: Identify your main competitors, their strengths and weaknesses, and your competitive advantage.

Organization and Management

In this section, outline your business’s organizational structure and management team. Include bios of key team members, their roles, and their relevant experience. This information helps establish credibility and demonstrates that you have a capable team to execute your business plan.

Products or Services

Detail what products or services you plan to offer. This section should cover:

• Description: Describe each product or service along with its features and benefits.
• Pricing Strategy: Explain your pricing structure and how it compares to your competitors.
• Product Lifecycle: Discuss the expected lifespan of your products and any plans for updates or new offerings.

Marketing and Sales Strategy

Outlining your marketing and sales strategy is crucial. This section should cover how you plan to attract and retain customers. Consider including elements such as:

• Promotion: Discuss your advertising, branding, and public relations strategies.
• Distribution Channels: Explain where and how customers will buy your products or services.
• Sales Strategy: Outline your sales process and any sales objectives you aim to achieve.

Funding Requirements

If you are seeking financing , be clear about your funding requirements. Specify how much money you need, how you plan to use it, and potential funding sources. Investors want to know how their money will help grow your business and generate returns.

Financial Projections

Financial projections are essential to demonstrate your business’s profitability. Include forecasts for:

• Income Statement: Project your revenue, expenses, and profits for the next three to five years.
• Cash Flow Statement: Layout your projected cash inflows and outflows.
• Balance Sheet: Provide an estimate of your business assets, liabilities, and equity at specific periods.

The appendix contains any additional information or documents that support your business plan. This might include resumes of team members, legal agreements, product images, and other supporting documents. While it is not mandatory to have an appendix, including pertinent documents can enhance your plan’s credibility.

Creating a strong business plan requires careful thought and attention to detail. Each component plays a vital role in presenting your business idea in the best light possible. By including all these sections, you will provide potential investors with a comprehensive view of your business strategy, helping you achieve your goals.

Common Mistakes in Business Plan Conclusions

When creating a business plan, it’s crucial to focus on every section, particularly the conclusion. Many entrepreneurs overlook this final part, thinking it doesn’t hold much weight. However, the conclusion can be the difference between securing investment and losing potential supporters. Here are common mistakes to watch out for when crafting the conclusion of your business plan.

Neglecting to Summarize Key Points

One significant error is failing to summarize the essential aspects of the business plan. The conclusion should revisit the main goals, strategies, and financial projections. It effectively reinforces your ideas and reminds the reader why your business concept is compelling.

Consider including a brief recap of:

• Your business objectives
• The target market you aim to reach
• Your unique selling proposition (USP)
• The projected revenue and growth

Being Too Vague

Another mistake is being too vague in the conclusion. Statements like “We plan to be successful” do not offer concrete information. Utilize your conclusion to present clear, definitive plans and goals that substantiate your vision. Remember, investors want to know precisely how you plan to achieve success.

Ignoring the Importance of a Call to Action

A compelling conclusion ends with a call to action. Many entrepreneurs forget to invite their readers, especially potential investors, to take the next step. Whether it’s scheduling a meeting or providing contact information for further discussions, clearly guiding the reader on how to engage with you can enhance the effectiveness of the conclusion. Consider phrases like:

• “We invite you to discuss this exciting opportunity further.”
• “Reach out to us if you’re interested in learning more.”
• “Let’s connect and explore this venture together.”

While Blending Emotions with Facts

While appealing to emotions is important, the conclusion should primarily focus on facts and figures. Relying too heavily on emotional language can lead to skepticism from potential investors. It’s essential to strike a balance between passion for your business and the provision of quantitative data that supports your claims. Show enthusiasm, but also ensure your business plan holds up under scrutiny.

Failure to Highlight Unique Advantages

Another common pitfall is neglecting to reiterate your unique advantages. Investors need to understand what makes your business special. Use this final opportunity to reinforce how your offering stands out in the market and why consumers will choose you over competitors. Clearly articulate your differentiators, such as innovative technology, superior customer service, or exceptional quality.

Overlooking Future Potential

Many forget to illustrate the long-term potential of the business. Just demonstrating current market position isn’t enough. Discuss how the business can grow and evolve. Mention upcoming trends, potential scaling opportunities, or new product launches that could expand your market reach. By painting a picture of future success, you create an enticing proposition for stakeholders.

Keep in mind these mistakes as you finalize your business plan’s conclusion. A well-structured and thoughtful conclusion can leave a lasting impression. Avoid vague statements, focus on facts over emotions, and ensure you clearly outline your unique advantages and future potential. A well-crafted conclusion not only summarizes your business plan but also serves as a powerful tool to engage and convince your audience.

Ultimately, the conclusion of your business plan has the potential to seal the deal. Revisit each aspect with care, ensuring you communicate your vision with clarity and conviction. A strong conclusion can make investors feel confident about joining you on your entrepreneurial journey.

How to Summarize Your Business Goals Creatively

Setting and summarizing business goals effectively can determine the success of your enterprise. It’s crucial to do this in a way that not only communicates your objectives but also inspires your team and stakeholders. Here are some creative methods to summarize your business goals that can engage and motivate others.

Visual Storytelling

Using visual elements can help in summarizing complex business goals. You can create infographics that portray your goals visually. This method allows you to convey information quickly and in an engaging manner. Consider using:

• Charts to represent growth targets.
• Icons to symbolize key objectives.
• Color codes to differentiate between various types of goals—short-term versus long-term.

Visual storytelling makes the goals memorable. Your team is more likely to remember a vivid infographic than a plain text document. When presenting to stakeholders, a well-designed visual can significantly enhance understanding and retention.

Catchy Taglines and Slogans

Creating a catchy tagline or slogan for each goal can transform the way you communicate your objectives. A memorable phrase can encapsulate the core idea of a goal, making it easy for everyone to recall. For example:

• If your goal is to improve customer satisfaction, a tagline like “Delighting Customers, Every Time!” sets a clear expectation.
• A slogan such as “Innovate to Elevate!” can succinctly express your goal of product development.

When your team feels connected to these phrases, it fosters a sense of ownership and pride. Slogans can be shared in meetings, emails, or even on social media to maintain focus.

Goal Mapping

Turning your goals into a mind map can help everyone visualize the paths toward achieving them. These maps showcase relationships between goals, enabling your team to understand the bigger picture. In your mind map, you can:

• Place your primary objective at the center.
• Branch out to show key performance indicators (KPIs).
• Present action items linked to each goal for clarity.

This method not only inspires creativity but also encourages collaboration, as team members can contribute their ideas on how to achieve specific targets.

Storytelling Techniques

Everyone loves a good story. Weave your business goals into a narrative format that highlights their significance. By framing your goals like a story, you can engage your audience emotionally. For instance, share a client success story to illustrate your goal of expanding your market reach. Include:

• The challenge faced by the client.
• The innovative solution your business provided.
• The remarkable results achieved.

This storytelling technique helps your audience see the potential impact of achieving these goals, thereby creating a sense of urgency and importance.

Interactive Workshops

Organize interactive workshops where team members can collaborate in brainstorming sessions. Encourage them to share their interpretations of the business goals. You can use tools like:

• Whiteboards for jotting down ideas.
• Post-it notes for goal prioritization.
• Digital brainstorming apps for remote teams.

These workshops can generate creative solutions while allowing everyone to play a part in the summarization process. It helps foster a stronger team bond and a shared commitment to achieving the goals.

Regular Check-Ins

Summarizing your business goals isn’t a one-time activity. Schedule regular check-ins to review progress and reframe objectives as needed. Use these sessions to:

• Celebrate accomplishments and milestones.
• Identify hurdles and brainstorm solutions.
• Reiterate and refresh goal summaries.

Continuous communication keeps everyone aligned and motivated. It creates a culture of accountability and progress tracking.

Utilizing these creative methods can invigorate the process of summarizing your business goals. You not only clarify intentions but also maintain motivation among your team. Remember, the more engaging and relatable your goals are, the better the chances of achieving them!

The Importance of a Compelling Conclusion in Business Plans

When crafting a business plan, every section holds its own weight. Yet, the conclusion is unique; it’s the final push, the moment of clarification. A compelling conclusion in a business plan isn’t just an ending—it’s a strategic advantage. It summarizes your vision and solidifies the reader’s trust in your business idea. Here’s why a strong conclusion is vital and how to make it effective.

Firstly, the conclusion encapsulates the entire plan. After presenting a multitude of data, strategies, and ideas, the conclusion allows you to tie all these threads together. It provides a final perspective on how your business will succeed. In doing so, it reinforces key points and makes your overall argument more persuasive.

This section serves as a call to action. You aim to inspire your readers—potential investors, partners, or stakeholders—to take the next steps with you. A compelling conclusion should ignite enthusiasm. Use clear and impactful language to demonstrate your passion and commitment to the business venture. When readers can feel your genuine excitement, they are more likely to engage with your proposal.

To craft an impactful conclusion, consider the following elements:

• Recap Key Elements: Highlight the most crucial points from your business plan. This creates a quick mental refresher for readers and ensures they remember your strengths.
• Vision and Goals: Reiterate your long-term vision and goals. Be specific about where you see your business in the coming years and how you plan to get there.
• Value Proposition: Clearly restate the unique value your business offers. Make it clear why your venture stands out from the competition.
• Actionable Next Steps: Whether it’s a request for funding or a meeting to discuss specifics, clearly outline what you want from your readers. Provide direction for how to proceed.

While writing the conclusion, ensure it remains concise yet comprehensive. Avoid unnecessary jargon that could confuse your audience. Remember, simplicity enhances clarity. Use straightforward language and articulate your ideas in a way that resonates with your readers.

Additionally, a strong conclusion helps to build credibility. It gives an opportunity to convey your knowledge and expertise in the field. By confidently presenting your arguments, you invite readers to share in your vision while establishing trust. This trust is essential when pursuing financial support or partnerships.

In the realm of business plans, a persuasive conclusion can also set the tone for subsequent discussions. If the outcome you’re after is funding, investors often look for reassurance that their money is going to a solid concept. Highlighting your market research and potential ROI can make your pitch more enticing. Tailor your conclusion to reflect what specific stakeholders are looking for, making their interests a priority.

Moreover, leveraging emotional appeals in your conclusion can enhance its effectiveness. People often connect with stories. A brief anecdote about a challenge you faced or a success can humanize your business plan and make it more relatable. Remember to keep the emotion professional, aligning it with your business goals.

Practice makes perfect. Revise your conclusion multiple times. Make sure each word earns its place and that it flows smoothly. Seek feedback from mentors or colleagues who can offer constructive criticism. Their insights can help refine your final submission and make it stronger.

The conclusion is not merely a summary; it’s the heart of your business plan. It’s where passion meets strategy, and it can significantly influence your audience’s perception. Crafting a compelling conclusion may seem daunting, but with focus and clarity, it can become your secret weapon in persuading your audience. Embrace the power of persuasive writing, and let your conclusion shine as a reflection of your ambition and drive.

Strategies for Writing a Persuasive Business Plan Conclusion

When crafting a business plan, the conclusion isn’t just the last word; it’s a vital component that can seal the deal for investors, partners, or stakeholders. A compelling conclusion pulls together the key points while leaving the reader with a strong impression. Here are some effective strategies for writing a persuasive business plan conclusion.

Reinforce Your Vision

Your conclusion should clearly express the big picture of your business. Remind the reader of your company’s purpose and how it stands out in the market. Highlight your vision and mission statement, emphasizing their significance. For example:

• Vision Statement: “Our vision is to revolutionize the way people approach sustainable living.”
• Mission Statement: “Our mission is to provide eco-friendly products that promote a greener lifestyle.”

By reaffirming these statements, you solidify the foundation upon which your business stands.

Summarize Key Points

While brevity is crucial, it’s equally important to remind your audience of your plan’s key highlights. Summarize essential elements like:

• Market Analysis: A brief overview of opportunities identified in the market.
• Target Audience: Key demographics and their needs.
• Unique Selling Proposition (USP): What sets your business apart from competitors.
• Financial Projections: Key financial metrics, such as expected revenue growth or profit margins.

Keep these summaries concise but insightful. This helps the reader recall the core arguments presented throughout the document.

Highlight Benefits

Shift the focus to the benefits that the reader can expect from supporting your business. Outline what investors will gain—whether through profit margins, market share growth, or long-term stability. Make it personal. Use “you” language to engage directly with your audience, like:

• “By investing in our company, you’ll play a key role in supporting sustainable communities.”
• “Your partnership will not only yield substantial returns but also contribute to a brighter future.”

When readers see the potential personal or financial gain, their interest peaks.

Incorporate a Call-to-Action

A persuasive business plan conclusion should contain a powerful call-to-action (CTA). This encourages your audience to take the next step, whether that’s scheduling a follow-up meeting, making an investment, or simply expressing interest. Some examples of CTAs might include:

• “Contact us today to explore how you can be part of this exciting journey.”
• “Join us in making a difference in the community; let’s discuss how we can work together.”

Strong CTAs compel readers to act rather than just ponder your proposal.

Conclude with Confidence

End your conclusion confidently. Use assertive language that communicates your belief in your business plan’s success. Phrases such as “We are confident that our innovative approach will capture the market” or “We are poised to lead the industry in innovation and customer satisfaction” express that you truly believe in your project. Such confidence can be contagious; it can encourage investors to feel the same way.

Polish Your Tone

While crafting your conclusion, maintain a professional yet approachable tone. Avoid jargon and complicated terms that might alienate your audience. Simple, clear language resonates better and facilitates understanding. For instance, instead of saying, “Our proprietary technology augments operational efficiencies,” say, “Our technology makes it easier for businesses to operate smoothly.”

Remember that the final words of your business plan are impactful. They can inspire action, commitment, and investment. By reinforcing your vision, summarizing key points, highlighting benefits, incorporating a call-to-action, and concluding with confidence, you’ll create a strong business plan conclusion that resonates with your readers.

As you draft your conclusion, also consider reviewing similar successful plans for inspiration. Learning from others solidifies your understanding and enhances your writing style. Taking the time to perfect this section of your business plan can be the difference between securing funding or leaving potential support on the table.

Real-Life Business Plan Conclusion Success Stories

Crafting a business plan is a crucial step in building a successful venture. However, the culmination of that plan—the conclusion—can often be overlooked. A solid conclusion not only wraps up the document but also emphasizes key points that can motivate investors and stakeholders to take action. Here, we explore real-life examples of business plans with effective conclusions that led to success.

One remarkable case is Airbnb . When the founders, Brian Chesky and Joe Gebbia, crafted their initial business plan, their conclusion struck a chord with potential investors. They highlighted the potential of creating a global community of travelers and hosts, emphasizing the mission to democratize travel. This personal touch in their conclusion resonated, paving the way for Airbnb to disrupt the hospitality industry and achieve a multibillion-dollar valuation.

Another notable example is Dropbox . In its early stages, Dropbox’s co-founder Drew Houston provided an engaging conclusion that focused on the growing need for cloud storage solutions. He tied in real-life uses of the product that showcased its potential. By illustrating how Dropbox could save time and reduce complexity, Houston made a compelling case for investment. This clear vision and a focused conclusion helped Dropbox secure the funding it needed to innovate and expand.

Then there’s Warby Parker . Known for their affordable eyewear, Warby Parker’s business plan included a conclusion that outlined their commitment to social responsibility. They integrated the “Buy a Pair, Give a Pair” model, which appealed to consumers’ desire to make a positive impact. This conclusion did more than summarize the plan; it conveyed a deep connection to their audience, which significantly contributed to their rapid growth.

Effective conclusions not only summarize the business plan but also project enthusiasm and vision. Here are key elements that make a conclusion impactful:

• Highlight of Mission and Vision: Clearly state your mission and the vision for the future. This should align with the company goals and paint a vivid picture of success.
• Call to Action: Encourage investors or stakeholders to take specific actions. This might be to invest, to join your mission, or to try your product.
• Summary of Key Points: Briefly recap the most important aspects of your plan, reinforcing why it’s worth the investment.
• Market Potential: Provide data or projections that reflect the industry potential. Show why this is the right time to invest in your company.

In the fast-paced tech world, companies like Squarespace have also used their business plan conclusions to emphasize innovation. Their conclusion cohesively linked the evolution of web design to a need for simplicity and elegance. By painting a clear connection between their services and the user needs, Squarespace was able to attract significant investments and market traction.

Another inspiring example comes from Peloton . Their business plan conclusion touched upon the growing trend of home fitness and how Peloton provides not just a product, but a community. They showcased testimonials from users who found motivation and connections through their platform. This emotional narrative drew in investors who believed in the brand’s potential to grow exponentially.

Successful business plans often reflect a deep understanding of the market, and their conclusions can resonate on a personal level with potential backers. One proven strategy is to include customer stories or experiences that illustrate product effectiveness. This storytelling approach creates an emotional connection, making it easier for investors to envision the company’s future.

A well-crafted business plan conclusion is not just the final word; it’s an opportunity to make a memorable impact. Businesses like Airbnb, Dropbox, Warby Parker, Squarespace, and Peloton show how powerful a strategic conclusion can be. Through clarity, vision, and relatability, these companies successfully captured the attention of investors and achieved remarkable growth. Whether you’re drafting your first business plan or refining an existing one, ensure your conclusion leaves a lasting impression. This critical element may very well determine the trajectory of your business journey.

Crafting a successful business plan conclusion is more than just summarizing your key points; it’s your opportunity to make a lasting impression on readers. A well-written conclusion encapsulates the essence of your business strategy, reinforcing the vision and direction you’ve laid out. By including effective business plan conclusion examples, you can see firsthand how impactful your final remarks can be. They serve as a catalyst for interest and action, motivating investors or partners to engage with your venture.

When constructing your business plan conclusion, be sure to highlight the key components you’ve discussed throughout the document. This means revisiting your business goals and objectives and aligning them with the points made in the body of your plan. Common mistakes in business plan conclusions often stem from failing to connect these dots, leaving readers unclear about your overall vision. Instead of creating a generic closing statement, infuse creativity into your summary. Use storytelling techniques to make your goals relatable and memorable, helping your audience envision the future you are striving to create.

The importance of a compelling conclusion cannot be overstated. It is this final section that can spark excitement or investment. A persuasive conclusion leaves a lingering impact, encouraging readers to see the value in your business. Utilize strategies like calling to action, emphasizing the market opportunity, or sharing real-life success stories. These elements can help illustrate how your business can achieve its goals and resonate with the audience.

As you craft your business plan conclusion, remember that clarity and brevity are key. Let your passion shine through, and ensure that every word adds value to your overall message. By combining inspiration with a clear vision, you empower your business plan to stand out. A strong conclusion not only solidifies your ideas but also breeds confidence among your audience, positioning your business for successful engagement and future growth.

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Closing Statement Example for Business Plan: Tips & Guide

Table of Contents

Your business plan’s closing statement is the last thing an investor will read, so it must be compelling enough to encourage them to invest. The final paragraph of your business plan should do two things. It should summarize the entire document and give the reader a better grasp of your company’s USPs (unique selling propositions). By using persuasive writing techniques and language, you can ensure your ending is as impactful and memorable as possible. To help get you started, this blog post will provide tips and an example of a successful closing statement for a business plan.

What Is a Business Plan?

A business plan is a comprehensive document that outlines a business’s strategy and operating procedures . It’s typically used to attract investors, secure funding, and provide direction for the business in the future. Typical components of a business plan include 

• An executive summary
• Market analysis overview
• Financial projections
• Details on how the company plans to achieve its stated objectives.

Tips on Writing a Conclusion for Your Business Plan

Your company’s closing statement in a business plan can inspire investors or motivate employees. It should offer a view into the future by stating your goals for the company’s growth and development.  Consider the following suggestions for concluding your business plan .

Proper Amount of Information

The final section of your business plan should include a concise summary of your essential ideas. Explain why your company will succeed and how you intend to get there. This business plan section is your last attempt to convince potential backers to put money into your venture. The final section of a company plan written for internal use can be more optimistic. You could mention your future goals for growth or expansion in this situation. This will help the audience understand the direction you envision the company heading. To win over investors, you might include the following in your final paragraph:

• The state of your company’s finances as of right now
• Money to help your business expand and thrive
• Customers and clients who fit your target demographic
• Demand from Consumers
• Particulars that set you apart from the competition
• Your strategy to boost revenue.
• Include the following in your conclusion to provide management with some insight into the future of the company:
• Details about your company’s past and its offerings
• Intentions for the long-term
• Future growth or expansion plans

These aren’t the only points that should be mentioned in a conclusion, but they’re among the most crucial.

Incorporate Data and Statistics

To make your case more convincing, you should use evidence like figures and facts. Doing so will strengthen your argument and leave the reader with a favorable impression of your company. Your company’s financial history and growth projections may help convince investors to invest in your company. Market share and customer happiness statistics can help reassure upper management that their company is on the right track.

Keep a Good Attitude

Avoid sounding pessimistic as you wrap things up. Avoid statements like “Despite our difficulties, I am certain that our business will be successful.” Don’t dwell on past failures, but rather on your company’s successes and future prospects.  Using phrases like “I am positive about the future of our company” will leave the reader with a favorable impression of your firm.

End With a CTA

The business plan’s final section should end with a call to action. In this section, you might argue why the reader should join your cause or invest in your business. Your stand must be a concise and direct call to action. Readers need to know exactly what you want them to do, and you need to convince them to do it.

Conclude and Reflect

After you’ve finished writing your conclusion, it’s essential to go back and read it over. Ensure that your point is made without ambiguity and that all relevant details are included. Ensure the tone is upbeat and cheerful, and check for spelling and grammatical problems. To attract investors, it’s essential to have a second pair of eyes look over the final draft of the business plan. Obtaining as much input as possible will help you ensure your argument is well-articulated and persuasive. After you’ve come to a satisfying conclusion, it’s time to move on to the next phase of your business plan.

Location: End of Document or Executive Summary?

Determine whether you want your business plan’s conclusion to appear at the end of the document or the executive summary. If you’re writing a business plan to attract investors or obtain funding, consider adding the conclusion to the executive summary.  Investors will likely skim the rest of your report before getting to your executive summary. Including it there is crucial to ensure they get your main points. Doing so will give your audience a clearer picture of where you are going with your argument.

Closing Statement Example for Business Plan

We are certain that ABC Corporation will become a key player in the XYZ industry due to our extensive market research and analysis. Our unique combination of innovative products and services, competitive pricing, and dedicated customer service makes us the go-to provider for ABC customers.  The funds we secure from this investment round will help us develop and improve our products and services. It will also finance our expansion into new markets.  With your support, we can make ABC Company the industry leader in XYZ. Thank you for considering our business plan and taking the time to learn more about our company. We look forward to working with you and exploring the potential of this partnership.  Thank you for your time.  Sincerely,  XYZ Team 

The closing statement example for business plan above is an excellent example of how a business model should end. It emphasizes the objective, progress, and, most significantly, the business owner’s commitment to its mission . In summary, the conclusion should restate your company’s value proposition and create a lasting impression on the reader.

Abir Ghenaiet

Abir is a data analyst and researcher. Among her interests are artificial intelligence, machine learning, and natural language processing. As a humanitarian and educator, she actively supports women in tech and promotes diversity.

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Business plan conclusion: Summing It Up: Writing an Effective Business Plan Conclusion

1. why a business plan conclusion matters, 2. restate your main goals and objectives, 3. highlight your achievements and challenges, 4. provide actionable steps for improvement, 5. share your vision and expectations, 6. invite your readers to take the next step, 7. showcase your success stories and customer feedback, 8. link to relevant tools and guides, 9. thank your readers and sign off.

Many people tend to overlook the importance of a business plan conclusion, thinking that it is just a summary of what they have already written. However, this is a mistake that can cost you the opportunity to impress your potential investors, partners, or customers. A business plan conclusion is not just a recap of your main points, but a powerful tool to persuade your audience that your business idea is worth pursuing and supporting. In this section, we will discuss why a business plan conclusion matters, and how to write an effective one that showcases your strengths and addresses your challenges. We will also provide some examples of good and bad business plan conclusions, and some tips to avoid common pitfalls.

A business plan conclusion matters for several reasons:

1. It is your last chance to convince your audience that your business idea is viable , profitable, and sustainable. You want to leave a lasting impression on them, and make them feel confident about your ability to execute your plan and achieve your goals . You also want to show them that you have done your homework, and that you have considered all the possible risks and opportunities that your business may face.

2. It is an opportunity to highlight your unique value proposition , and what sets you apart from your competitors. You want to emphasize how your business solves a problem, fills a gap, or creates a benefit for your target market. You also want to demonstrate how your business model , strategy, and operations are aligned with your vision and mission, and how they create a competitive advantage for your business .

3. It is a way to express your passion, enthusiasm, and commitment for your business idea. You want to show your audience that you are not just a dreamer, but a doer, and that you are ready to take action and make your business a reality. You also want to show them that you are flexible, adaptable, and open to feedback, and that you are willing to learn from your mistakes and improve your business along the way.

To write an effective business plan conclusion, you should follow these steps:

- Start with a strong opening sentence that summarizes your main message and captures your audience's attention. You can use a question, a quote, a statistic, or a bold statement to hook your audience and make them curious about what you have to say.

- Provide a brief overview of your business idea , your target market, your competitive analysis , your financial projections, and your funding needs. You don't need to repeat everything you have written in your previous sections, but you should highlight the key points that support your main message and show your value proposition.

- explain why your business idea is worth pursuing and supporting, and what benefits it will bring to your audience, your customers, and your industry. You can use facts, figures, testimonials, or case studies to back up your claims and show your credibility and potential.

- address any potential challenges , risks, or limitations that your business may face, and how you plan to overcome them. You don't need to dwell on the negative aspects, but you should acknowledge them and show your preparedness and resilience. You can also mention any opportunities, trends, or innovations that your business can leverage or explore to grow and succeed.

- End with a clear and compelling call to action that tells your audience what you want them to do next. You can ask them to invest in your business, partner with you, join your team, or contact you for more information. You should also provide your contact details and thank them for their time and attention.

Here are some examples of good and bad business plan conclusions, and some tips to avoid common pitfalls:

- Good example: "As you can see, our business idea of creating a mobile app that connects travelers with local guides is not only innovative and exciting, but also profitable and scalable. We have identified a large and growing market of travelers who are looking for authentic and personalized experiences, and we have developed a unique value proposition that differentiates us from our competitors . We have also conducted a thorough competitive analysis, and we have a clear strategy and plan to launch and grow our business . We have projected a positive cash flow and a high return on investment for our investors, and we have secured some initial funding and partnerships. However, we still need $500,000 to complete our app development, marketing, and operations, and we are looking for investors who share our vision and passion for travel and culture. If you are interested in joining us on this exciting journey, please contact us at [email protected], or visit our website at www.localguide.com. Thank you for your time and consideration, and we hope to hear from you soon."

- Bad example: "In conclusion, we have a great business idea that will make a lot of money. We have done some research and we know what we are doing. We need some money to start our business , so please give us some. You won't regret it. Thanks for listening. Bye."

- Tips to avoid common pitfalls:

* Don't be too vague, general, or repetitive. Be specific, concise, and focused on your main message and value proposition.

* Don't be too modest, humble, or apologetic. Be confident, assertive, and persuasive. Show your audience why they should care and why they should trust you.

* Don't be too arrogant, unrealistic, or overconfident. Be realistic, honest, and humble. Show your audience that you have done your homework, and that you have considered all the possible scenarios and outcomes.

* Don't be too boring, dry, or technical. Be engaging, lively, and emotional. Show your audience that you are passionate, enthusiastic, and committed to your business idea.

After presenting your business idea , market analysis, marketing strategy, financial plan, and operational plan, you have reached the final stage of your business plan: the conclusion. This is where you summarize the main points of your plan and remind your readers of your goals and objectives. The conclusion should not be a mere restatement of what you have already written, but rather a synthesis of the key insights and implications of your plan. Here are some tips on how to write an effective conclusion for your business plan :

- Reinforce your value proposition. What is the unique benefit or solution that your business offers to your target market? How does your business stand out from the competition? Why should your potential investors or customers choose you over others? These are the questions that you should answer in your conclusion, highlighting the most compelling aspects of your value proposition.

- Emphasize your competitive advantage. How do you plan to sustain and grow your business in the long term ? What are the strategies or tactics that you will use to achieve your goals and objectives? How will you measure your progress and performance? These are the questions that you should answer in your conclusion, demonstrating your competitive advantage and your ability to execute your plan.

- address the risks and challenges . What are the potential pitfalls or obstacles that your business might face? How will you mitigate or overcome them? What are the assumptions or uncertainties that underlie your plan? How will you test or validate them? These are the questions that you should answer in your conclusion, acknowledging the risks and challenges and showing your preparedness and contingency plans.

- Call for action. What are the next steps that you want your readers to take after reading your plan? Do you want them to invest in your business, partner with you, buy your product or service, or contact you for more information? These are the questions that you should answer in your conclusion, providing a clear and compelling call for action and indicating your contact details.

By following these tips, you can write a conclusion that summarizes your business plan and persuades your readers to support your business idea . Remember to keep your conclusion concise, focused, and confident, and to avoid introducing new information or repeating what you have already said. A well-written conclusion can make a lasting impression on your readers and help you achieve your business goals and objectives .

Growing your startup can be a big challenge

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One of the most important parts of your business plan conclusion is the evaluation of your achievements and challenges. This is where you showcase how well you have executed your business strategy, met your objectives, and overcome your difficulties. It is also where you identify the areas where you need improvement , the lessons you have learned, and the opportunities you have for future growth. To write an effective evaluation, you should consider the following points:

- compare your actual performance with your projected performance. Use relevant metrics and indicators to measure your progress and results. For example, you can compare your revenue, profit, market share, customer satisfaction, and social impact with your initial forecasts and targets. Highlight the areas where you have exceeded your expectations, and explain the factors that contributed to your success. Similarly, acknowledge the areas where you have fallen short, and analyze the reasons for your underperformance.

- Discuss the challenges you have faced and how you have overcome them. Every business faces some difficulties and risks along the way. You should be honest and transparent about the challenges you have encountered, such as market changes, competitive pressures, operational issues, or financial constraints. Explain how you have dealt with these challenges, and what strategies you have implemented to mitigate or resolve them. For example, you can mention how you have adapted your product or service, diversified your revenue streams , optimized your processes, or secured additional funding.

- Identify the opportunities you have for future growth and improvement. Based on your evaluation, you should also outline the potential areas where you can expand or enhance your business. These could be new markets, customers, products, services, partnerships, or innovations that you can pursue or develop. You should also mention the goals you have set for yourself, and the action plans you have devised to achieve them. For example, you can state how you plan to increase your market penetration, customer retention, product quality, service efficiency, or social impact.

By following these points, you can write a comprehensive and convincing evaluation that demonstrates your achievements and challenges. This will help you to impress your readers, whether they are investors, lenders, partners, customers, or employees. It will also help you to reflect on your own performance, and to plan for your future success .

After summarizing the main points of your business plan , you should provide some actionable steps for improvement that can help you achieve your goals and overcome your challenges . These steps should be specific, measurable, achievable, relevant, and time-bound (SMART). They should also be aligned with your mission, vision, and values. Here are some examples of actionable steps for improvement for different aspects of your business plan :

- Market analysis : You can improve your market analysis by conducting regular surveys, interviews, and focus groups with your target customers, competitors, and industry experts. You can also use online tools and databases to access reliable and up-to-date market data and trends. By doing so, you can gain a deeper understanding of your market size, segments, needs, preferences, and opportunities.

- Marketing strategy : You can improve your marketing strategy by testing and optimizing your marketing channels , campaigns, and messages. You can use analytics tools and metrics to measure the effectiveness and return on investment (ROI) of your marketing efforts. You can also seek feedback and reviews from your customers and partners to improve your brand awareness , reputation, and loyalty.

- Financial plan : You can improve your financial plan by reviewing and updating your financial projections , assumptions, and scenarios regularly. You can also use accounting software and tools to track and manage your cash flow, income, expenses, and profitability. You can also seek professional advice and guidance from financial experts, advisors, and investors to improve your financial performance and sustainability.

As you conclude your business plan, it is important to look ahead and envision how your business will grow and evolve in the future. You should share your vision and expectations with your potential investors, partners, and customers, and demonstrate how you plan to achieve them. Here are some aspects that you can include in your future outlook:

- Your goals and objectives : What are the specific, measurable, achievable, relevant, and time-bound (SMART) goals that you have set for your business? How do they align with your mission and vision statements ? For example, you may have a goal to increase your market share by 10% in the next year, or to launch a new product line in the next quarter.

- Your strategies and action plans : How will you accomplish your goals and objectives? What are the strategies and action plans that you have devised to execute them? For example, you may have a strategy to expand your distribution channels, or to invest in research and development.

- Your opportunities and challenges : What are the opportunities and challenges that you foresee in the future? How will you capitalize on the opportunities and overcome the challenges? For example, you may have an opportunity to enter a new market, or a challenge to deal with regulatory changes.

- Your competitive advantage and differentiation : What makes your business unique and superior to your competitors? How will you maintain and enhance your competitive advantage and differentiation in the future? For example, you may have a competitive advantage in quality , innovation, or customer service.

- Your financial projections and assumptions : What are the financial projections and assumptions that you have made for your business? How will you measure and evaluate your financial performance and progress? For example, you may have projected your revenue, expenses, cash flow, and profitability for the next three to five years, and assumed a certain growth rate, inflation rate, and interest rate.

By sharing your future outlook, you can show your readers that you have a clear and realistic vision of where you want to take your business, and how you plan to get there. You can also inspire confidence and trust in your business, and persuade them to support your venture. Remember to be optimistic, but also realistic and honest, and to back up your claims with evidence and data. Your future outlook should be the final and lasting impression that you leave with your readers, so make it compelling and memorable.

You have reached the end of your business plan, but this is not the end of your journey. In fact, it is only the beginning of a new and exciting phase for your business idea. You have done the hard work of researching, analyzing, and presenting your vision, goals, and strategies. Now, it is time to put them into action and make your dream a reality .

But you don't have to do it alone. There are many resources and opportunities available to help you along the way. Here are some of the steps you can take to move forward with your business plan:

1. Seek feedback . Before you launch your business, it is a good idea to get some feedback from your potential customers, partners, investors, mentors, or advisors. They can offer you valuable insights, suggestions, or criticisms that can help you improve your plan and avoid common pitfalls. You can use various methods to collect feedback, such as surveys, interviews, focus groups, or online platforms. Be open-minded and receptive to the feedback you receive, and use it to refine your plan and your product or service.

2. Secure funding . Depending on the nature and scale of your business, you may need some external funding to start or grow your venture . There are many sources of funding you can explore, such as bank loans, grants, crowdfunding, angel investors, venture capitalists, or bootstrapping. Each source has its own advantages and disadvantages, and you should carefully weigh them against your needs and goals. You should also prepare a convincing pitch that showcases your business plan , your value proposition, your market potential, and your competitive edge.

3. Build your team . No matter how brilliant your idea is, you cannot execute it alone. You need a team of talented and motivated people who share your vision and passion. Your team can include your co-founders, employees, contractors, suppliers, distributors, or collaborators. You should look for people who have the skills, experience, and personality that complement yours and your business. You should also establish clear roles , responsibilities, and expectations for each team member, and foster a culture of trust , communication, and collaboration.

4. Launch your business . This is the moment you have been waiting for: launching your business to the world. You should plan and execute a launch strategy that creates awareness, interest, and excitement for your product or service . You can use various channels and tools to promote your launch, such as social media, email marketing, press releases, blogs, podcasts, webinars, or events. You should also monitor and measure the results of your launch, such as the number of visitors, leads, customers, sales, or revenue. You should celebrate your achievements, but also learn from your challenges and mistakes.

5. Grow your business . Launching your business is not the end of your journey, but the start of a new and exciting phase. You should constantly look for ways to improve your product or service, expand your market, increase your customer base , generate more revenue, and achieve your goals. You should also be flexible and adaptable to the changing needs and preferences of your customers, the trends and opportunities in your industry , and the threats and challenges from your competitors. You should also seek new partnerships, collaborations, or alliances that can help you grow your business and create more value.

Invite Your Readers to Take the Next Step - Business plan conclusion: Summing It Up: Writing an Effective Business Plan Conclusion

One of the most powerful ways to convince potential investors , customers, and partners of your business value is to showcase your success stories and customer feedback. These testimonials demonstrate how your business has solved real problems, delivered tangible results, and satisfied diverse needs. They also provide social proof and credibility for your business idea and vision. In this segment, we will discuss how to effectively present your testimonials and customer feedback in your business plan conclusion.

Some tips for presenting your testimonials and customer feedback are:

- Choose relevant and specific testimonials and feedback. You want to select the ones that highlight your unique value proposition, competitive advantage, and impact. Avoid generic or vague praises that do not convey any meaningful information. For example, instead of using a testimonial like "This is a great product, I love it!", use one like "This product has helped me save 30% on my energy bills and reduce my carbon footprint . It is easy to install and use, and the customer service is excellent ."

- Use a variety of sources and formats. You want to show that your business has a diverse and loyal customer base , and that you have received positive feedback from different channels and platforms. You can use quotes, ratings, reviews, surveys, case studies, videos, or any other format that suits your business. You can also include feedback from different sources, such as your website, social media, email, online forums, or third-party platforms. For example, you can use a quote from a customer who emailed you, a rating from a review site, and a video testimonial from your social media page .

- Organize your testimonials and feedback logically and visually. You want to make sure that your testimonials and feedback are easy to read and understand, and that they support your main points and arguments. You can use headings, subheadings, bullet points, numbers, or any other visual cues to structure your testimonials and feedback. You can also group them by theme, category, benefit, or feature. For example, you can use headings like "How we help our customers save money", "How we help our customers improve their health", and "How we help our customers protect the environment", and then list the testimonials and feedback that correspond to each heading.

- Include the source and date of your testimonials and feedback. You want to show that your testimonials and feedback are authentic, recent, and verifiable. You can include the name, title, company, location, or any other relevant information of the person who gave the testimonial or feedback. You can also include the date or time period when the testimonial or feedback was given. This will help you establish trust and credibility with your audience. For example, you can use a format like "John Smith, CEO of ABC Inc., New York, USA, March 2024" or "Jane Doe, Customer, London, UK, January 2024".

One of the most important aspects of writing an effective business plan conclusion is to provide your readers with useful resources that can help them implement your recommendations, learn more about your industry, or access relevant tools and guides. These resources can be in the form of links, books, articles, podcasts, videos, or any other format that suits your purpose and audience. You should carefully select and organize the resources that you want to share, and explain how they relate to your main points and goals. Here are some tips on how to do that:

- Use a numbered list to present your resources in a clear and structured way. You can group them by category, topic, or priority, depending on your preference and logic. For example, you can have a list of resources for market research , another list for financial planning, and another list for legal advice.

- Provide a brief description for each resource that you include. You should summarize what the resource is about, who it is for, and why it is relevant or helpful for your readers. You should also mention the source, author, or creator of the resource, and provide a link if applicable. For example, you can write something like this:

1. The Lean Startup by Eric Ries. This is a bestselling book that introduces the lean startup methodology , which is a way of creating and managing startups that focuses on customer feedback, experimentation, and iteration. It is a must-read for anyone who wants to start a new venture or innovate an existing one. You can find it on Amazon or your local bookstore.

2. SurveyMonkey . This is an online tool that allows you to create and distribute surveys, collect and analyze data , and generate reports and insights. It is a great way to conduct market research , test your product or service , and get feedback from your customers or potential customers. You can sign up for a free account or choose a paid plan that suits your needs. You can access it at https://www.surveymonkey.com/.

3. SCORE . This is a nonprofit organization that provides free mentoring, workshops, and webinars for small business owners and entrepreneurs . It is supported by the U.S. small Business administration and has a network of over 10,000 volunteers across the country. You can find a local chapter, request a mentor, or browse their online resources at https://www.score.org/.

- Use examples to illustrate how your readers can use or benefit from the resources that you share. You can use hypothetical scenarios, case studies, testimonials, or success stories to show how the resources have helped others or can help your readers achieve their goals. For example, you can write something like this:

- One of the examples of how the lean startup methodology can help you create a successful business is Dropbox, a cloud-based file storage and sharing service. Dropbox started as a simple idea of solving the problem of syncing files across devices. The founder, Drew Houston, used a video to demonstrate his prototype and get feedback from potential customers . He then launched a beta version and invited people to sign up for early access. He also used a referral program to incentivize users to invite their friends and grow his user base . By applying the principles of the lean startup , Dropbox was able to validate its product-market fit , iterate on its features, and scale its growth.

- SurveyMonkey can help you conduct market research in various ways . For example, you can use it to test your value proposition, identify your target market , segment your customers, measure customer satisfaction , and more. You can also use it to get feedback on your business plan , pitch deck, or website. SurveyMonkey has a library of templates and questions that you can use or customize for your specific needs. You can also integrate it with other tools and platforms, such as Mailchimp, Salesforce, or WordPress.

- SCORE can help you with various aspects of starting and running a small business . For example, you can get advice on how to write a business plan , secure funding, manage your finances, market your products or services , and more. You can also learn from the experiences and best practices of other entrepreneurs and business owners who have faced similar challenges and opportunities. SCORE also offers webinars and workshops on topics such as social media marketing , e-commerce, franchising, and more.

By providing your readers with valuable resources, you can enhance your credibility, increase your engagement, and demonstrate your commitment to helping them succeed. You can also establish yourself as an authority and a leader in your field or industry. Remember to update your resources regularly and add new ones as you discover them. This way, you can keep your readers informed and interested in your topic and your business.

Link to Relevant Tools and Guides - Business plan conclusion: Summing It Up: Writing an Effective Business Plan Conclusion

You have reached the end of your business plan, and it is time to wrap it up with a strong conclusion. A good conclusion should not only summarize the main points of your plan, but also persuade your readers that your business idea is worth pursuing. Here are some tips on how to write an effective business plan conclusion:

- Reiterate your value proposition and competitive advantage . Remind your readers what problem your business solves, how it solves it, and why it is better than the alternatives. For example, if you are launching a vegan bakery, you could say: "Our vegan bakery offers delicious and healthy treats that cater to the growing demand for plant-based products. We use organic and locally sourced ingredients , and we have a loyal customer base that loves our unique flavors and recipes."

- Highlight your achievements and milestones. Show your readers that you have done your homework and that you have a realistic and feasible plan to execute your business idea. Mention any relevant data, research, or feedback that supports your claims. For example, you could say: "We have conducted extensive market research and customer surveys , and we have validated our product-market fit . We have also secured a lease for a prime location, obtained the necessary permits and licenses, and hired a talented team of bakers and staff."

- Outline your goals and next steps. Give your readers a clear picture of what you plan to do next and how you will measure your progress and success. Include specific and measurable objectives, timelines, and budgets. For example, you could say: "Our immediate goal is to launch our bakery by the end of the year and generate $100,000 in revenue in the first six months. We will track our performance using key metrics such as sales, customer satisfaction, and retention. Our long-term goal is to expand our product line , open more locations, and franchise our brand."

- Thank your readers and sign off. express your gratitude and appreciation for your readers' time and attention. Invite them to contact you for more information or feedback. Provide your contact details and a call to action. For example, you could say: "Thank you for reading our business plan and considering our proposal. We are confident that our vegan bakery will be a successful and profitable venture, and we hope that you will join us in making it a reality. Please feel free to reach out to us at any time if you have any questions or comments. You can email us at [email protected] or call us at 555-1234. We look forward to hearing from you soon.

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How To Write the Conclusion of a Business Plan

Your business plan’s conclusion should encapsulate your overall justification for why your venture will succeed in order to draw investors or motivate your staff. Additionally, it ought to give a short future outlook outlining your goals for development and growth. The conclusion should also restate your company’s key selling points and leave readers with a favorable impression.

Business Plan Writer Explains How to Write a Business Plan: Part 8 The Conclusion

How to write a business plan conclusion

When writing a business plan’s conclusion, adhere to these guidelines:

1. Decide where you want it to be

Choose whether you want the executive summary or the entire document to contain your business plan’s conclusion. Consider placing the conclusion at the end of the executive summary if you are writing a business plan to attract investors or raise money. The executive summary introduces the key points of the business plan and outlines the company’s funding requirements and conditions. It can be more persuasive to potential investors to place the conclusion at the end of this summary, and it also increases the likelihood that it will be read.

You might select a more conventional location for your conclusion at the end of the document if you are writing a business plan for an established company to track progress or provide information to a third party. In this case, your conclusion should review and highlight the company’s advantages.

2. Include the right information

Depending on whether your business is a startup looking to raise capital or an established organization evaluating goals, the information you include in your business plan conclusion will vary. New companies trying to get funding might include:

Established businesses might include information in their conclusions such as:

Not all conclusions need all these details. The most crucial information for the purpose of your business plan should be included, but the conclusion should be brief. When selecting what to include in your conclusion, keep your audience in mind. Focus on the value your company provides to investors, for instance, and the reasons why this opportunity is special. Focus on company leadership’s experience and ways to lower the lender’s risk when applying for a business loan.

3. Add facts and statistics

Facts, figures, and statistics should be used to support the conclusions in your business plan. Investors want evidence that your business can succeed and that they will see a return on their investment. Include details like your track record of expanding this or other businesses, or the information you used to calculate how much funding you need. This information is more convincing than assumptions or vague statements.

4. Maintain a positive tone

Your business plan’s conclusion should be formal and upbeat in nature. You want to convey your optimism and enthusiasm for the company’s success so that the reader will feel motivated or enthusiastic to support the business. Use language that is assertive and active and conveys your confidence in the business.

5. Include a call to action

At the conclusion of your essay, include a brief call to action that instructs the reader on what to do next. The reader should be motivated to support the business’s objectives in the manner you desire. You might conclude by saying something like, “Invest in the success of Harper Corps by joining us as a minority partner in WinTec Enterprises.” In your call to action, use action words and emphasize how the reader will benefit from taking that action.

6. Review your conclusion

Make sure your business plan’s conclusion is written with proper spelling, grammar, and punctuation by reading it after you’ve finished. You want it to flow naturally and be both concise and clear. Ask a friend or coworker who is not familiar with the objectives of your company to read it as well. Ask them if they have any questions about the book’s conclusion and whether reading it has piqued their interest or excitement. Then make improvements as needed.

What is a business plan conclusion?

The goal of a business plan conclusion is to persuade the reader of the company’s success by summarizing the plan’s advantages. The conclusion should highlight how the organization makes money and why it is a good investment because businesses typically produce business plans in order to obtain funding or investors. Businesses also create business plans to evaluate their performance or set new objectives.

In a business plan, the conclusion can be found at the end of the whole thing or at the end of the executive summary. The executive summary, which appears at the start of the business plan, provides an overview of what the reader can expect to learn and persuades them to continue reading. Some people conflate the executive summary and the conclusion, but there are several significant differences between the two.

Every business, whether new or established, should have a business plan with a succinct and focused conclusion.

Business plan conclusion example

Use this sample business plan conclusion as a model for your own plan’s conclusion, being sure to customize it to your target audience’s needs and requirements:

Expanding Bridgewater & Co. Our already prosperous company will be able to provide cutting-edge health technologies to more people who need them thanks to its expansion into the Denver metropolitan area. Buying this manufacturing facility in Denver gives us the chance to produce all of our goods internally and in a single location and ship them out quickly and effectively to the area. We want Sixty-Seven Investors to be a part of this exciting revolution because we have the unique ability to change lives. Investing in Bridgewater & Co. s expansion benefits Sixty-Seven Investors by:

We can save more lives if we work together, Bridgewater & Co. Products change, add to the community’s employment opportunities, and revolutionize the health technology sector. Invest with us if you share our vision for a more prosperous and healthy future.

How do you conclude a business plan presentation?

Conclusion. The conclusion of a business plan doesn’t necessarily need to be lengthy; in fact, it can be quite succinct. Your conclusion should restate the opportunity, highlight the plan’s key strengths, summarize your vision, and remind the reader of the reasons why your company is in a position to carry out the plan successfully.

What is summary in business plan?

One of the most crucial components of your plan is the executive summary, which is a synopsis of all the important sections of your business plan.

What should be done after finishing the business plan?

• Make sure it connects to your purpose.
• Begin to test and measure.
• Use the 80/20 rule.
• Learn something new (quickly)

What is recommendation in a business plan?

A business recommendation letter, also known as a reference letter, is an endorsement of the products or services that one company has provided to another business or individual.

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How to Write a Business Plan in 9 Steps (+ Template and Examples)

Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.

If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.

Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.

You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.

Let’s get started.

What Do You Need A Business Plan For?

Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.

1. Secure Funds

One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.

For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.

A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.

Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.

2. Monitor Business Growth

A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:

• The business goals
• Methods to achieve the goals
• Time-frame for attaining those goals

A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.

You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.

3. Measure Business Success

A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.

Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.

You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.

4. Document Your Marketing Strategies

You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.

Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.

In your business plan, your marketing strategy must answer the questions:

• How do you want to reach your target audience?
• How do you plan to retain your customers?
• What is/are your pricing plans?
• What is your budget for marketing?

How to Write a Business Plan Step-by-Step

1. create your executive summary.

The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.

Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.

A good executive summary should do the following:

• A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
• Contain your Mission Statement which explains what the main objective or focus of your business is.
• Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
• The Team. Basic information about your company’s leadership team and employees
• Business Concept. A solid description of what your business does.
• Target Market. The customers you plan to sell to.
• Marketing Strategy. Your plans on reaching and selling to your customers
• Current Financial State. Brief information about what revenue your business currently generates.
• Projected Financial State. Brief information about what you foresee your business revenue to be in the future.

The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.

Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.

View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:

• Who is your target audience?
• What sector or industry are you in?
• What are your products and services?
• What is the future of your industry?
• Is your company scaleable?
• Who are the owners and leaders of your company? What are their backgrounds and experience levels?
• What is the motivation for starting your company?
• What are the next steps?

Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.

The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.

If you are writing your business plan for your planning purposes, you do not need to write the executive summary.

2. Add Your Company Overview

The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.

Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.

Your company overview should contain the following:

• What products and services you will provide
• Geographical markets and locations your company have a presence
• What you need to run your business
• Who your target audience or customers are
• Who will service your customers
• Your company’s purpose, mission, and vision
• Information about your company’s founders
• Who the founders are
• Notable achievements of your company so far

When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.

If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.

• Who are you targeting? (The answer is not everyone)
• What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
• How does your product or service overcome that pain point?
• Where is the location of your business?
• What products, equipment, and services do you need to run your business?
• How is your company’s product or service different from your competition in the eyes of your customers?
• How many employees do you need and what skills do you require them to have?

After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.

The company description or overview section contains three elements: mission statement, history, and objectives.

• Mission Statement

The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.

Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”

When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:

• Founding Date
• Major Milestones
• Location(s)
• Flagship Products or Services
• Number of Employees
• Executive Leadership Roles

When you fill in this information, you use it to write one or two paragraphs about your company’s history.

Business Objectives

Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.

3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity

The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.

Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.

This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.

Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?

You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.

Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?

Illustrate the competitive landscape as well. What are your competitors doing well and not so well?

Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.

Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.

Market Analysis

Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.

The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.

A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.

• Market Research

To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.

• Your target market’s needs or pain points
• The existing solutions for their pain points
• Geographic Location
• Demographics

The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.

Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.

You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.

How to Quantify Your Target Market

One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:

• Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
• Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
• Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
• Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.

What Does a Good Market Analysis Entail?

Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.

You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:

• Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
• Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
• Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
• Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
• Market Share Potential: Does your business stand a good chance of taking a good share of the market?
• Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
• Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
• Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.

The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.

Here are some questions you can answer that can help you position your product or service in a positive light to your readers.

• Is your product or service of superior quality?
• What additional features do you offer that your competitors do not offer?
• Are you targeting a ‘new’ market?

Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.

Competitive Analysis

In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.

Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.

Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.

The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.

Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.

When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.

Find answers to the following questions after you have identified who your competitors are.

• What are your successful competitors doing?
• Why is what they are doing working?
• Can your business do it better?
• What are the weaknesses of your successful competitors?
• What are they not doing well?
• Can your business turn its weaknesses into strengths?
• How good is your competitors’ customer service?
• Where do your competitors invest in advertising?
• What sales and pricing strategies are they using?
• What marketing strategies are they using?
• What kind of press coverage do they get?
• What are their customers saying about your competitors (both the positive and negative)?

If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.

If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.

Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.

The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.

Direct vs Indirect Competition

You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.

There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.

If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.

In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.

For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.

There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.

Factors that Differentiate Your Business from the Competition

There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.

1. Cost Leadership

A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.

A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.

2. Product Differentiation

Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.

Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.

3. Market Segmentation

As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.

If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.

4. Define Your Business and Management Structure

The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.

Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.

If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.

Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.

The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.

Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.

Management Team

The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.

Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.

A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.

Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.

Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.

If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.

Key Questions to Answer When Structuring Your Management Team

• Who are the key leaders?
• What experiences, skills, and educational backgrounds do you expect your key leaders to have?
• Do your key leaders have industry experience?
• What positions will they fill and what duties will they perform in those positions?
• What level of authority do the key leaders have and what are their responsibilities?
• What is the salary for the various management positions that will attract the ideal candidates?

Additional Tips for Writing the Management Structure Section

1. Avoid Adding ‘Ghost’ Names to Your Management Team

There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.

Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.

2. Focus on Credentials But Pay Extra Attention to the Roles

Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.

While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.

Organizational Chart

Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.

If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.

An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.

You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.

5. Describe Your Product and Service Offering

In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.

Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.

The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.

If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”

Your product and service section in your business plan should include the following:

• A detailed explanation that clearly shows how your product or service works.
• The pricing model for your product or service.
• Your business’ sales and distribution strategy.
• The ideal customers that want your product or service.
• The benefits of your products and services.
• Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
• Plans for filling the orders you receive
• If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.

What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services

In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.

When describing the benefits of your products or services, here are some key factors to focus on.

• Unique features
• Translating the unique features into benefits
• The emotional, psychological, and practical payoffs to attract customers
• Intellectual property rights or any patents

When describing the product life cycle of your products or services, here are some key factors to focus on.

• Upsells, cross-sells, and down-sells
• Time between purchases
• Plans for research and development.

When describing the production process for your products or services, you need to think about the following:

• The creation of new or existing products and services.
• The sources for the raw materials or components you need for production.
• Assembling the products
• Maintaining quality control
• Supply-chain logistics (receiving the raw materials and delivering the finished products)
• The day-to-day management of the production processes, bookkeeping, and inventory.

Tips for Writing the Products or Services Section of Your Business Plan

1. Avoid Technical Descriptions and Industry Buzzwords

The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.

A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.

2. Describe How Your Products or Services Differ from Your Competitors

When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.

If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.

For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.

3. Long or Short Products or Services Section

Should your products or services section be short? Does the long products or services section attract more investors?

There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.

If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.

Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.

The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.

If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.

A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.

4. Describe Your Relationships with Vendors or Suppliers

Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.

Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.

5. Your Primary Goal Is to Convince Your Readers

The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.

When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.

While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.

Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.

Key Questions to Answer When Writing your Products and Services Section

Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.

• Are your products existing on the market or are they still in the development stage?
• What is your timeline for adding new products and services to the market?
• What are the positives that make your products and services different from your competitors?
• Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
• Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
• How much does it cost to produce your products or services? How much do you plan to sell it for?
• What is the price for your products and services compared to your competitors? Is pricing an issue?
• What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
• What is your plan for acquiring your products? Are you involved in the production of your products or services?
• Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
• Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
• How do you plan to distribute your products or services to the market?

You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.

6. Show and Explain Your Marketing and Sales Plan

Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.

The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.

There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.

In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.

Outline Your Business’ Unique Selling Proposition (USP)

The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).

Target Market and Target Audience

Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.

Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.

Creating a Smart Marketing and Sales Plan

Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.

Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.

Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.

Your Positioning Statement

Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.

Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?

Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market

• What are the unique features or benefits that you offer that your competitors lack?
• What are your customers’ primary needs and wants?
• Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
• How does your company’s solution compare with other solutions in the market?

After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.

All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.

Here is a simple template you can use to develop a positioning statement.

For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].

For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.

“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”

You can edit this positioning statement sample and fill it with your business details.

After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.

Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.

You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.

Basic Rules to Follow When Pricing Your Offering

Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.

• Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
• Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
• Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.

Pricing Strategy

Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.

• Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
• Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
• Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.

After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.

As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.

There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.

Advertising

Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.

Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.

Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.

A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.

Public Relations

A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.

Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.

Content Marketing

Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,

Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.

Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.

If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.

Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.

When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.

• Is your choice of packaging consistent with your positioning strategy?
• What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
• How does your packaging compare to that of your competitors?

Social Media

Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.

You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.

Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.

Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.

You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.

Strategic Alliances

If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.

Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.

The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.

Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.

2. Evaluate Your Competition

One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.

You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.

These questions can help you know your competition.

• What makes your competition successful?
• What are their weaknesses?
• What are customers saying about your competition?

3. Consider Your Brand

Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.

4. Focus on Benefits

The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.

Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.

5. Focus on Differentiation

Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.

Key Questions to Answer When Writing Your Marketing and Sales Plan

• What is your company’s budget for sales and marketing campaigns?
• What key metrics will you use to determine if your marketing plans are successful?
• What are your alternatives if your initial marketing efforts do not succeed?
• Who are the sales representatives you need to promote your products or services?
• What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
• Where will you sell your products?

You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.

The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.

7. Clearly Show Your Funding Request

If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’

A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.

Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.

In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.

Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.

If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.

Funding Request: Debt or Equity?

When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.

Case for Equity

If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.

Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.

Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.

Case for Debt

You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.

When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.

Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.

Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.

You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.

Additional Tips for Writing the Funding Request Section of your Business Plan

The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.

If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.

You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.

If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .

Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.

8. Detail Your Financial Plan, Metrics, and Projections

If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.

The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.

If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.

Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.

If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.

When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.

The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.

Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.

Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.

Use Graphs and Charts

The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.

Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.

Address the Risk Factors and Show Realistic Financial Projections

Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.

You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.

What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan

The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.

A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.

Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.

1. Sales Forecast

Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.

One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.

For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.

Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.

Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.

For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.

2. Personnel Plan

The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.

However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.

The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.

3. Income Statement

The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.

Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.

The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.

• Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
• Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
• Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
• Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
• Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
• Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
• Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
• Net profit shows whether your business has made a profit or taken a loss during a given timeframe.

4. Cash Flow Statement

The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.

5. Balance Sheet

The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.

You can get the net worth of your company by subtracting your company’s liabilities from its assets.

6. Exit Strategy

The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.

You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.

Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.

Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.

Key Questions to Answer with Your Financial Plan, Metrics, and Projection

Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.

You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.

Here are some key questions to answer to help you develop this section.

• What is your sales forecast for the next year?
• When will your company achieve a positive cash flow?
• What are the core expenses you need to operate?
• How much money do you need upfront to operate or grow your company?
• How will you use the loans or investments?

9. Add an Appendix to Your Business Plan

Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.

The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.

When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.

Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.

You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.

If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.

A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.

The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.

People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.

Common Items to Include in the Appendix Section of Your Business Plan

The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:

• Additional data about the process of manufacturing or creation
• Additional description of products or services such as product schematics
• Additional financial documents or projections
• Articles of incorporation and status
• Backup for market research or competitive analysis
• Bank statements
• Business registries
• Client testimonials (if your business is already running)
• Copies of insurances
• Credit histories (personal or/and business)
• Deeds and permits
• Equipment leases
• Examples of marketing and advertising collateral
• Industry associations and memberships
• Images of product
• Intellectual property
• Key customer contracts
• Legal documents and other contracts
• Letters of reference
• Links to references
• Market research data
• Organizational charts
• Photographs of potential facilities
• Professional licenses pertaining to your legal structure or type of business
• Purchase orders
• Resumes of the founder(s) and key managers
• State and federal identification numbers or codes
• Trademarks or patents’ registrations

Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.

Tips and Strategies for Writing a Convincing Business Plan

To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.

1. Know Your Audience

When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.

The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.

Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.

• A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
• A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
• A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.

2. Get Inspiration from People

Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.

To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.

When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.

3. Avoid Being Over Optimistic

Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.

The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.

In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.

The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.

To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.

4. Keep it Simple and Short

When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.

One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.

Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.

You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.

To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.

5. Make an Outline and Follow Through

A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.

For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.

To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.

This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:

• Table of contents
• Introduction
• Product or service description
• Target audience
• Market size
• Competition analysis
• Financial projections

Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.

6. Ask a Professional to Proofread

When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.

You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.

In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.

Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.

Business Plan Examples and Templates That’ll Save You Tons of Time

1. hubspot's one-page business plan.

The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.

Hubspot’s one-page business plan template is divided into nine fields:

• Business opportunity
• Company description
• Industry analysis
• Target market
• Implementation timeline
• Marketing plan
• Financial summary
• Funding required

2. Bplan’s Free Business Plan Template

Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.

The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.

3. HubSpot's Downloadable Business Plan Template

HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.

The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.

There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.

4. Business Plan by My Own Business Institute

My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.

The comprehensive template consists of a whopping 15 sections.

• The Business Profile
• The Vision and the People
• Home-Based Business and Freelance Business Opportunities
• Organization
• Licenses and Permits
• Business Insurance
• Communication Tools
• Acquisitions
• Location and Leasing
• Accounting and Cash Flow
• Opening and Marketing
• Managing Employees
• Expanding and Handling Problems

There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.

5. Score's Business Plan Template for Startups

Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.

The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.

There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.

The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.

6. Minimalist Architecture Business Plan Template by Venngage

The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .

There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.

7. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.

There are five sections in the two SBA’s free business plan templates.

• Executive Summary
• Company Description
• Service Line
• Marketing and Sales

8. The $100 Startup's One-Page Business Plan

The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.

There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.

9. PandaDoc’s Free Business Plan Template

The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.

There are 11 sections in PandaDoc’s free business plan template.

• Executive summary
• Business description
• Products and services
• Operations plan
• Management organization
• Financial plan
• Conclusion / Call to action
• Confidentiality statement

You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)

PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.

10. Invoiceberry Templates for Word, Open Office, Excel, or PPT

InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.

Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.

Alternatives to the Traditional Business Plan

A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.

Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.

Business Model Canvas (BMC)

The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.

The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.

Segments of the Business Model Canvas

The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.

• Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
• Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
• The Product’s Value Propositions: What does your product do? How will it be different from other products?
• Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
• Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
• Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
• Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
• Cost Structure: What is the estimated cost of production? How much will distribution cost?
• Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?

Lean Canvas

The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.

Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:

• Problem: Simple and straightforward number of problems you have identified, ideally three.
• Solution: The solutions to each problem.
• Unfair Advantage: Something you possess that can't be easily bought or replicated.
• Key Metrics: Important numbers that will tell how your business is doing.

Startup Pitch Deck

While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.

Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.

Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.

Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.

Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.

• Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
• Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
• Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
• Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
• Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
• Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
• Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
• Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
• Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
• Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
• Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
• Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.

It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.

Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.

Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan

• Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
• Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
• Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
• Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.

Business Plan FAQ

Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time.  They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.

Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans.  A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.

A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs.  Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.

The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.

A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.

Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.

Exlore Further

• 12 Key Elements of a Business Plan (Top Components Explained)
• 13 Sources of Business Finance For Companies & Sole Traders
• 5 Common Types of Business Structures (+ Pros & Cons)
• How to Buy a Business in 8 Steps (+ Due Diligence Checklist)

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

How to Conclude a Business Plan

by Mariel Loveland

Published on 28 May 2019

It doesn’t matter if you’re launching a brand new business or planning to expand your already successful venture: you will need a business plan. This is a road map that helps you achieve all of your business goals. It basically answers a series of questions about your company ranging from what your product is to who you’re selling it to. This, of course, can be figurative as some businesses provide services, rather than products.

For example, a plumbing company’s product is fixing pipes, not typically the retail sale of the pipes themselves. A medical practice’s product is diagnosing and curing illnesses, not typically the medicine itself (that’s usually left up to the pharmacies).

Partially completed written business plan.

Word processing software.

Inside every business plan is a conclusion – and it varies depending on the industry and the audience. Regardless, this is your final pitch to summarize your entire report. A solid business plan conclusion example is one that highlights strengths and ensures the reader that your business will be a success.

Share the conclusion of your plan with a few people you trust to make sure company outsiders can understand your points.

Explain The “Why” Behind Your Business Plan

In your business plan conclusion pdf (or printed paper if you’re going old school), you need to tell readers why they’re actually reading your business plan in the first place. For example, the conclusion of a business plan for a coffee shop looking for funding might briefly mention that you’re searching for a certain amount of money to remodel your dining space or buy a new espresso machine.

You might also want to use different business plan conclusion examples for different audiences. If you’re looking for $100,000 in funding from investors, disclose financial details in your conclusion. If you’re looking for a new partner or to sell your business, you’ll need to outline this in your conclusion as well. You might actually be looking for investors and partners or looking for investors or a buyer at the same time. Print out business plan conclusion PDFs for each specific instance.

State The Key Milestones

Your business plan probably has stacks of pages with different milestones. When do you expect to turn a profit? How long will it take you to train new staff? In how many months do you expect to break a sales milestone? Even your executive summary, the shorter preface to your plan that explains your key assumptions in everyday speak versus industry jargon, has a few milestones buried deep in its short pages.

State your key milestones in your conclusion, whether you place this in an executive summary or at the end of your report. For example, the conclusion of a business plan for a coffee shop might say that you expect to sell 1,000 lattes by the first month. Write this down along with the percentage of increased revenue you expect month-to-month and the measures you’ll take to get there. Put the milestones in a graph, table or column for easy digestibility.

Create a Call to Action

The best business plans don’t just end with an “okay, now what?” They end with inspiration. To do this, you’ll need to add a call-to-action to your business plan conclusion. The call-to-action can be anything from “invest money today” to “join us as a partner.”

For example, the conclusion of a business plan for a coffee shop might include “try one of our specialty cold brews today.” This is a successful business plan conclusion example because it gives investors the opportunity to try your product to see if they really believe in what you’re offering.

Not all Business Plan Conclusion Examples Are at the End

Before printing out your business plan conclusion PDF, think about where you’re going to actually put your conclusion. This might come at the end of your executive summary, which is at the beginning of your business plan.

You also might wish to write a longer conclusion at the end of your business plan. Either is effective, though the executive summary does come first and is most easily digested. You might have the biggest opportunity to show your business prowess in a place most investors are going to read first.

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How to Write the Perfect Business Plan: A Comprehensive Guide

Thinking of starting a business here's the best step-by-step template for writing the perfect business plan when creating your startup..

Maybe you think you don't need a step-by-step guide to writing a great business plan . Maybe you think you don't need a template for writing a business plan. After all, some entrepreneurs succeed without writing a business plan. With great timing, solid business skills, entrepreneurial drive, and a little luck , some founders build thriving businesses without creating even an  informal business plan . 

But the odds are greater that those entrepreneurs will fail.

Does a business plan make startup success inevitable? Absolutely not. But great planning often means the difference between success and failure. Where your entrepreneurial dreams are concerned, you should do everything possible to set the stage for success.

And that's why a great business plan is one that helps you  succeed .

The following is a comprehensive guide to creating a great business plan. We'll start with an overview of key concepts. Then we'll look at each section of a typical business plan:

Executive Summary

Overview and objectives, products and services, market opportunities, sales and marketing.

• Competitive Analysis

Management Team

Financial analysis.

So first let's gain a little perspective on why you need a business plan.

Key Concepts

Many business plans are fantasies. That's because many aspiring entrepreneurs see a business plan as simply a tool--filled with strategies and projections and hyperbole--that will convince lenders or investors the business makes sense.

That's a huge mistake.

First and foremost, your business plan should convince  you  that your idea makes sense--because your time, your money, and your effort are on the line.

So a solid business plan should be a blueprint for a successful business . It should flesh out strategic plans, develop marketing and sales plans, create the foundation for smooth operations, and maybe--just maybe--persuade a lender or investor to jump on board.

For many entrepreneurs, developing a business plan is the first step in the process of deciding whether to actually start a business. Determining if an idea fails on paper can help a prospective founder avoid wasting time and money on a business with no realistic hope of success.

So, at a minimum, your plan should:

• Be as objective and logical as possible. What may have seemed like a good idea for a business can, after some thought and analysis, prove not viable because of heavy competition, insufficient funding, or a nonexistent market. (Sometimes even the best ideas are simply ahead of their time.)
• Serve as a guide to the business's operations for the first months and sometimes years, creating a blueprint for company leaders to follow.
• Communicate the company's purpose and vision, describe management responsibilities, detail personnel requirements, provide an overview of marketing plans, and evaluate current and future competition in the marketplace.
• Create the foundation of a financing proposal for investors and lenders to use to evaluate the company.

A good business plan delves into each of the above categories, but it should also accomplish other objectives. Most of all, a good business plan is  convincing . It proves a case. It provides concrete, factual evidence showing your idea for a business is in fact sound and reasonable and has every chance of success.

Who  must  your business plan convince?

First and foremost, your business plan should convince  you  that your idea for a business is not just a dream but can be a viable reality. Entrepreneurs are by nature confident, positive, can-do people. After you objectively evaluate your capital needs, products or services, competition, marketing plans, and potential to make a profit, you'll have a much better grasp on your chances for success.

And if you're not convinced, fine: Take a step back and refine your ideas and your plans.

Who  can  your business plan convince?

1. Potential sources of financing.   If you need seed money from a bank or friends and relatives, your business plan can help you make a great case. Financial statements can show where you have been. Financial projections describe where you plan to go.

Your business plan shows how you will get there. Lending naturally involves risk, and a great business plan can help lenders understand and quantity that risk, increasing your chances for approval.

2. Potential partners and investors. Where friends and family are concerned, sharing your business plan may not be necessary (although it certainly could help).

Other investors--including angel investors or venture capitalists--generally require a business plan in order to evaluate your business.

3. Skilled employees . When you need to attract talent, you need  something  to show prospective employees since you're still in the startup phase. Early on, your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals--and, more important, their place in helping you achieve those goals.

4. Potential joint ventures. Joint ventures are like partnerships between two companies. A joint venture is a formal agreement to share the work--and share the revenue and profit. As a new company, you will likely be an unknown quantity in your market. Setting up a joint venture with an established partner could make all the difference in getting your business off the ground.

But above all, your business plan should convince  you  that it makes sense to move forward.

As you map out your plan, you may discover issues or challenges you had not anticipated.

Maybe the market isn't as large as you thought. Maybe, after evaluating the competition, you realize your plan to be the low-cost provider isn't feasible since the profit margins will be too low to cover your costs.

Or you might realize the fundamental idea for your business is sound, but how you implement that idea should change. Maybe establishing a storefront for your operation isn't as cost-effective as taking your products directly to customers--not only will your operating costs be lower, but you can charge a premium since you provide additional customer convenience.

Think of it this way. Successful businesses do not remain static. They learn from mistakes, and adapt and react to changes: changes in the economy, the marketplace, their customers, their products and services, etc. Successful businesses identify opportunities and challenges and react accordingly.

Creating a business plan lets you spot opportunities and challenges without risk. Use your plan to dip your toe in the business water. It's the perfect way to review and revise your ideas and concepts before you ever spend a penny.

Many people see writing a business plan as a "necessary evil" required to attract financing or investors. Instead, see your plan as a no-cost way to explore the viability of your potential business and avoid costly mistakes.

Now let's look at the first section of your business plan: The Executive Summary.

The Executive Summary is a brief outline of the company's purpose and goals. While it can be tough to fit on one or two pages, a good Summary includes:

• A brief description of products and services
• A summary of objectives
• A solid description of the market
• A high-level justification for viability (including a quick look at your competition and your competitive advantage)
• A snapshot of growth potential
• An overview of funding requirements

I know that seems like a lot, and that's why it's so important you get it right. The Executive Summary is often the make-or-break section of your business plan.

A great business solves customer problems. If your Summary cannot clearly describe, in one or two pages, how your business will solve a particular problem and make a profit, then it's very possible the opportunity does not exist--or your plan to take advantage of a genuine opportunity is not well developed.

So think of it as a snapshot of your business plan. Don't try to "hype" your business--focus on helping a busy reader get a great feel for what you plan to do, how you plan to do it, and how you will succeed.

Since a business plan should above all help you start and grow your business, your Executive Summary should first and foremost help you do the following.

1. Refine and tighten your concept.

Think of it as a written elevator pitch  (with more detail, of course). Your Summary describes the highlights of your plan, includes only the most critical points, and leaves out less important issues and factors.

As you develop your Summary, you will naturally focus on the issues that contribute most to potential success. If your concept is too fuzzy, too broad, or too complicated, go back and start again. Most great businesses can be described in several sentences, not several pages.

2. Determine your priorities.

Your business plan walks the reader through your plan. What ranks high in terms of importance? Product development? Research? Acquiring the right location? Creating strategic partnerships?

Your Summary can serve as a guide to writing the rest of your plan.

3. Make the rest of the process easy.

Once your Summary is complete, you can use it as an outline for the rest of your plan. Simply flesh out the highlights with more detail.

Then work to accomplish your secondary objective by focusing on your readers. Even though you may be creating a business plan solely for your own purposes, at some point you may decide to seek financing or to bring on other investors, so make sure your Summary meets their needs as well. Work hard to set the stage for the rest of the plan. Let your excitement for your idea and your business shine through.

In short, make readers want to turn the page and keep reading. Just make sure your sizzle meets your steak by providing clear, factual descriptions.

How? The following is how an Executive Summary for a bicycle rental store might read.

Introduction

Blue Mountain Cycle Rentals will offer road and mountain bike rentals in a strategic location directly adjacent to an entrance to the George Washington National Forest. Our primary strategy is to develop Blue Mountain Cycle Rentals as the most convenient and cost-effective rental alternative for the thousands of visitors who flock to the area each year.

Once underway, we will expand our scope and take advantage of high-margin new equipment sales and leverage our existing labor force to sell and service those products. Within three years we intend to create the area's premier destination for cycling enthusiasts.

Company and Management

Blue Mountain Cycle Rentals will be located at 321 Mountain Drive, a location providing extremely high visibility as well as direct entry and exit from a primary national park access road. The owner of the company, Marty Cycle, has over 20 years experience in the bicycle business, having served as a product manager for Acme Cycles as well as the general manager of Epic Cycling.

Because of his extensive industry contacts, initial equipment inventory will be purchased at significant discounts from OEM suppliers as well by sourcing excess inventory from shops around the country.

Because of the somewhat seasonal nature of the business, part-time employees will be hired to handle spikes in demand. Those employees will be attracted through competitive wages as well as discounts products and services.

460,000 people visited the George Washington National Forest during the last 12 months. While the outdoor tourism industry as a whole is flat, the park expects its number of visitors to grow over the next few years.

• The economic outlook indicates fewer VA, WV, NC, and MD cycling enthusiasts will travel outside the region
• The park has added a camping and lodging facilities that should attract an increased number of visitors
• The park has opened up additional areas for trail exploration and construction, ensuring a greater number of single-track options and therefore a greater number of visitors

The market potential inherent in those visitors is substantial. According to third-party research data, approximately 30 percent of all cyclists would rather rent than transport their own bicycles, especially those who are visiting the area for reasons other than cycling.

Competitive Advantages

The cycling shops located in Harrisonburg, VA, are direct and established competitors. Our two primary competitive advantages will be location and lower costs.

Our location is also a key disadvantage where non-park rentals are concerned. We will overcome that issue by establishing a satellite location in Harrisonburg for enthusiasts who wish to rent bicycles to use in town or on other local trails.

We will also use online tools to better engage customers, allowing them to reserve and pay online as well as create individual profiles regarding sizes, preferences, and special needs.

Financial Projections

Blue Mountain Cycle Rentals expects to earn a modest profit by year two based on projected sales. Our projections are based on the following key assumptions:

• Initial growth will be moderate as we establish awareness in the market
• Initial equipment purchases will stay in service for an average of three to four years; after two years we will begin investing in "new" equipment to replace damaged or obsolete equipment
• Marketing costs will not exceed 14 percent of sales
• Residual profits will be reinvested in expanding the product and service line

We project first-year revenue of $720,000 and a 10 percent growth rate for the next two years. Direct cost of sales is projected to average 60 percent of gross sales, including 50 percent for the purchase of equipment and 10 percent for the purchase of ancillary items. Net income is projected to reach $105,000 in year three as sales increase and operations become more efficient.

And so on ...

Keep in mind this is just a made-up example of how your Summary might read. Also keep in mind this example focused on the rental business, so a description of products was not included. (They'll show up later.) If your business will manufacture or sell products, or provide a variety of services, then be sure to include a Products and Services section in your Summary. (In this case the products and services are obvious, so including a specific section would be redundant.)

Bottom line:  Provide some sizzle in your Executive Summary, but make sure you show a reasonable look at the steak, too.

Providing an overview of your business can be tricky, especially when you're still in the planning stages. If you already own an existing business, summarizing your current operation should be relatively easy; it can be a lot harder to explain what you plan to  become .

So start by taking a step back.

Think about what products and services you will provide, how you will provide those items, what you need to have in order to provide those items, exactly who will provide those items, and most important, whom you will provide those items to.

Consider our bicycle rental business example. It's serves retail customers. It has an online component, but the core of the business is based on face-to-face transactions for bike rentals and support.

So you'll need a physical location, bikes, racks and tools and supporting equipment, and other brick-and-mortar related items. You'll need employees  with a very particular set of skills  to serve those customers, and you'll need an operating plan to guide your everyday activities.

Sound like a lot? It boils down to:

• What you will provide
• What you need to run your business
• Who will service your customers, and
• Who your customers are.

In our example, defining the above is fairly simple. You know what you will provide to meet your customer's needs. You will of course need a certain quantity of bikes to service demand, but you will not need a number of different types of bikes. You need a retail location, furnished to meet the demands of your business. You need semi-skilled employees capable of sizing, customizing, and repairing bikes.

And you know your customers: cycling enthusiasts.

In other businesses and industries, answering the above questions can be more difficult. If you open a restaurant, what you plan to serve will in some ways determine your labor needs, the location you choose, the equipment you need to purchase. And, most important, it will help define your customer. Changing any one element may change other elements; if you cannot afford to purchase expensive kitchen equipment, you may need to adapt your menu accordingly. If you hope to attract an upscale clientele, you may need to invest more in purchasing a prime location and creating an appealing ambience.

So where do you start? Focus on the basics first:

• Identify your industry. Retail, wholesale, service, manufacturing, etc. Clearly define your type of business.
• Identify your customer. You cannot market and sell to customers until you know who they are.
• Explain the problem you solve. Successful businesses create customer value by solving problems. In our rental example, one problem is cycling enthusiasts who don't--or can't--travel with bikes. Another problem is casual cyclists who can't--or choose not to--spend significant sums on their own bikes. The rental shop will solve that problem by offering a lower-cost and convenient alternative.
• Show how you will solve that problem. Our rental shop will offer better prices and enhanced services like remote deliveries, off-hours equipment returns, and online reservations.

If you are still stuck, try answering these questions. Some may pertain to you; others may not.

• Who is my average customer? Who am I targeting? (Unless you plan to open a grocery store, you should be unlikely to answer, "Everyone!")
• What pain point do I solve for my customers?
• How will I overcome that paint point?
• Where will I fail to solve a customer problem, and what can I do to overcome that issue? (In our rental example, one problem is a potential lack of convenience; we will overcome that issue by offering online reservations, on-resort deliveries, and drive-up equipment returns.)
• Where will I locate my business?
• What products, services, and equipment do I need to run my business?
• What skills do my employees need, and how many do I need?
• How will I beat my competition?
• How can I differentiate myself from my competition in the eyes of my customers? (You can have a great plan to beat your competition, but you also must win the perception battle among your customers. If customers don't feel you are different, then you aren't truly different. Perception is critical.)

Once you work through this list you will probably end up with a lot more detail than is necessary for your business plan. That is not a problem: Start summarizing the main points. For example, your Business Overview and Objectives section could start something like this:

History and Vision

Blue Mountain Cycle Rentals is a new retail venture that will be located at 321 Mountain Drive, directly adjacent to an extremely popular cycling destination. Our initial goal is to become the premier provider for bicycle rentals. We will then leverage our customer base and position in the market to offer new equipment sales as well as comprehensive maintenance and service, custom equipment fittings, and expert trail advice.

• Achieve the largest market share bicycle rentals in the area
• Generate a net income of $235,000 at the end of the second year of operation
• Minimize rental inventory replacement costs by maintaining a 7 percent attrition rate on existing equipment (industry average is 12 percent)

Keys to Success

• Provide high-quality equipment, sourcing that equipment as inexpensively as possible through existing relationships with equipment manufacturers and other cycling shops
• Use signage to attract visitors traveling to the national forest, highlighting our cost and service advantage
• Create additional customer convenience factors to overcome a perceived lack of convenience for customers planning to ride roads and trails some distance away from our shop
• Develop customer incentive and loyalty programs to leverage customer relationships and create positive word of mouth

You could certainly include more detail in each section; this is simply a quick guide. And if you plan to develop a product or service, you should thoroughly describe the development process as well as the end result.

The key is to describe what you will do for your customers--if you can't, you won't  have  any customers.

In the Products and Services section of your business plan, you will clearly describe--yep--the products and services your business will provide.

Keep in mind that highly detailed or technical descriptions are not necessary and definitely not recommended. Use simple terms and avoid industry buzzwords.

On the other hand, describing how the company's products and services will differ from the competition is critical. So is describing why your products and services are needed if no market currently exists. (For example, before there was Federal Express, overnight delivery was a niche business served by small companies. FedEx had to define the opportunity for a new, large-scale service and justify why customers needed--and would actually  use --that service.)

Patents, copyrights, and trademarks you own or have applied for should also be listed in this section.

Depending on the nature of your business, your Products and Services section could be very long or relatively short. If your business is product-focused, you will want to spend more time describing those products.

If you plan to sell a commodity item and the key to your success lies in, say, competitive pricing, you probably don't need to provide significant product detail. Or if you plan to sell a commodity readily available in a variety of outlets, the key to your business may not be the commodity itself but your ability to market in a more cost-effective way than your competition.

But if you're creating a new product (or service), make sure you thoroughly explain the nature of the product, its uses, and its value, etc.--otherwise your readers will not have enough information to evaluate your business.

Key questions to answer:

• Are products or services in development or existing (and on the market)?
• What is the timeline for bringing new products and services to market?
• What makes your products or services different? Are there competitive advantages compared with offerings from other competitors? Are there competitive disadvantages you will need to overcome? (And if so, how?)
• Is price an issue? Will your operating costs be low enough to allow a reasonable profit margin?
• How will you acquire your products? Are you the manufacturer? Do you assemble products using components provided by others? Do you purchase products from suppliers or wholesalers? If your business takes off, is a steady supply of products available?

In the cycling rental business example we've been using, products and services could be a relatively simple section to complete or it could be fairly involved. It depends on the nature of the products the company plans to rent to customers.

If Blue Mountain Cycling Rentals plans to market itself as a provider of high-end bikes, describing those bikes--and the sources for those bikes--is important, since "high-end cycling rentals" is intended to be a market differentiation. If the company plans to be the low-cost provider, then describing specific brands of equipment is probably not necessary.

Also, keep in mind that if a supplier runs out of capacity--or goes out of business altogether--you may not have a sufficient supply to meet your demand. Plan to set up multiple vendor or supplier relationships, and describe those relationships fully. 

Remember, the primary goal of your business plan is to convince  you  that the business is viable--and to create a road map for you to follow.

The Products and Services section for our cycling rental business could start something like this:

Product Description

Blue Mountain Cycle Rentals will provide a comprehensive line of bicycles and cycling equipment for all ages and levels of ability. Since the typical customer seeks medium-quality equipment and excellent services at competitive prices, we will focus on providing brands like Trek bikes, Shimano footwear, and Giro helmets. These manufacturers have a widespread reputation as mid- to high-level quality, unlike equipment typically found in the rental market.

The following is a breakdown of anticipated rental price points, per day and per week:

• Bicycle $30/$120
• Helmet $6/$30
• Customers can extend the rental term online without visiting the store.
• A grace period of two hours will be applied to all rentals; customers who return equipment within that two-hour period will not be charged an additional fee.

Competition

Blue Mountain Cycle Rentals will have clear advantages over its primary competitors, the bike shops located in Harrisonburg, VA:

• Newer equipment inventory with higher perceived quality
• Price points 15 percent below the competition
• Online renewals offering greater convenience
• A liberal return grace period that will reinforce our reputation as a customer-friendly rental experience

Future Products

Expansion will allow us to move product offerings into new equipment sales. We will also explore maintenance and fitting services, leveraging our existing maintenance staff to provide value-added services at a premium price.

When you draft your Products and Services section, think of your reader as a person who knows little to nothing about your business. Be clear and to the point.

Think of it this way: The Products and Services section answers the "what" question for your business. Make sure you fully understand the "what" factor; you may run the business, but your products and services are its lifeblood.

Market research is critical to business success. A good business plan analyzes and evaluates customer demographics, purchasing habits, buying cycles, and willingness to adopt new products and services.

The process starts with understanding your market and the opportunities inherent in that market. And that means you'll need to do a little research. Before you start a business you must be sure there is a viable market for what you plan to offer.

That process requires asking, and more importantly answering, a number of questions. The more thoroughly you answer the following questions, the better you will understand your market.

Start by evaluating the market at a relatively high level, answering some high-level questions about your market and your industry:

• What is the size of the market? Is it growing, stable, or in decline?
• Is the overall industry growing, stable, or in decline?
• What segment of the market do I plan to target? What demographics and behaviors make up the market I plan to target?
• Is demand for my specific products and services rising or falling?
• Can I differentiate myself from the competition in a way customers will find meaningful? If so, can I differentiate myself in a cost-effective manner?
• What do customers expect to pay for my products and services? Are they considered to be a commodity or to be custom and individualized?

Fortunately, you've already done some of the legwork. You've already defined and mapped out your products and services. The Market Opportunities section provides a sense-check of that analysis, which is particularly important since choosing the right products and services is such a critical factor in business success.

But your analysis should go further: Great products are great, but there still must be a market for those products. (Ferraris are awesome, but you're unlikely to sell many where I live.)

So let's dig deeper and quantify your market. Your goal is to thoroughly understand the characteristics and purchasing ability of potential customers in your market. A little Googling can yield a tremendous amount of data.

For the market you hope to serve, determine:

• Your potential customers. In general terms, potential customers are the people in the market segment you plan to target. Say you sell jet skis; anyone under the age of 16 and over the age of 60 or so is unlikely to be a customer. Plus, again in general terms, women make up a relatively small percentage of jet ski purchasers. Determining the total population for the market is not particularly helpful if your product or service does not serve a need for the entire population. Most products and services do not.
• Total households. In some cases determining the number of total households is important depending on your business. For example, if you sell heating and air conditioning systems, knowing the number of households is more important than simply knowing the total population in your area. While people purchase HVAC systems, "households" consume those systems.
• Median income. Spending ability is important. Does your market area have sufficient spending power to purchase enough of your products and services to enable you to make a profit? Some areas are more affluent than others. Don't assume every city or locality is the same in terms of spending power. A service that is viable in New York City may not be viable in your town.
• Income by demographics. You can also determine income levels by age group, by ethnic group, and by gender. (Again, potential spending power is an important number to quantify.) Senior citizens could very well have a lower income level than males or females age 45 to 55 in the prime of their careers. Or say you plan to sell services to local businesses; in that case, try to determine the amount they currently spend on similar services.

The key is to understand the market in general terms and then to dig deeper to understand whether there are specific segments within that market--the segments you plan to target--that can become customers and support the growth of your business.

Also keep in mind that if you plan to sell products online the global marketplace is incredibly crowded and competitive. Any business can sell a product online and ship that product around the world. Don't simply assume that just because "the bicycle industry is a $62 billion business" (a number I just made up) that you can capture a meaningful percentage of that market.

On the other hand, if you live in an area with 50,000 people and there's only one bicycle shop, you may be able to enter that market and attract a major portion of bicycle customers in your area.

Always remember it's much easier to serve a market you can define and quantify.

After you complete your research you may feel a little overwhelmed. While data is good, and more data is great, sifting through and making sense of too much data can be daunting.

For the purposes of your business plan, narrow your focus and focus on answering these main questions:

• What is your market? Include geographic descriptions, target demographics, and company profiles (if you're B2B). In short: Who are your customers?
• What segment of your market will you focus on? What niche will you attempt to carve out? What percentage of that market do you hope to penetrate and acquire?
• What is the size of your intended market? What is the population and spending habits and levels?
• Why do customers need and why will they be willing to purchase your products and services?
• How will you price your products and services? Will you be the low cost provider or provide value-added services at higher prices?
• Is your market likely to grow? How much? Why?
• How can you increase your market share over time?

The Market Opportunities section for our cycling rental business could start something like this:

Market Summary

Consumer spending on cycling equipment reached $9,250,000 in the states of VA, WV, MD, and NC last year. While we expect sales to rise, for the purposes of performing a conservative analysis we have projected a zero growth rate for the next three years.

In those states 2,500,000 people visited a national forest last year. Our target market includes customers visiting the Shenandoah National Forest; last year 120,000 people visited the area during spring, summer, and fall months.

Over time, however, we do expect equipment rentals and sales to increase as the popularity of cycling continues to rise. In particular we forecast a spike in demand in 2015 since the national road racing championships will be held in Richmond, VA.

Market Trends

Participation and population trends favor our venture:

• Recreational sports in general and both family-oriented and "extreme" sports continue to gain in exposure and popularity.
• Western VA and eastern WV have experienced population growth rates nearly double that of the country as a whole.
• Industry trends show cycling has risen at a more rapid rate than most other recreational activities.

Market Growth

According to the latest studies, recreation spending in our target market has grown by 14 percent per year for the past three years.

In addition, we anticipate greater than industry-norm growth rates for cycling in the area due to the increase in popularity of cycling events like the Alpine Loop Gran Fondo.

Market Needs

Out target market has one basic need: The availability to source bicycle rentals at a competitive price. Our only other competition are the bike shops in Harrisonburg, VA, and our location will give us a competitive advantage over those and other companies who try to serve our market.

You may want to add other categories to this section based on your particular industry.

For example, you might decide to provide information about Market Segments. In our case, the cycling rental business does not require much segmentation. Rentals are typically not broken down into segments like "inexpensive," "midrange," and "high-end." For the most part rental bikes are more of a commodity. (Although you'll notice in our Products and Services section, we decided to provide "high-end" rentals.)

But say you decide to open a clothing store. You could focus on high fashion, or children's clothes, or outdoor wear, or casual--you could segment the market in a number of ways. If that's the case, provide detail on segmentation that supports your plan.

The key is to define your market--and then show how you will serve your market.

Providing great products and services is wonderful, but customers must actually know those products and services exist. That's why marketing plans and strategies are critical to business success. (Duh, right?)

But keep in mind marketing is not just advertising. Marketing--whether advertising, public relations, promotional literature, etc.--is an investment in the growth of your business.

Like any other investment you would make, money spent on marketing must generate a return. (Otherwise why make the investment?) While that return could simply be greater cash flow, good marketing plans result in higher sales and profits.

So don't simply plan to spend money on a variety of advertising efforts. Do your homework and create a smart marketing program .

Here are some of the basic steps involved in creating your marketing plan:

• Focus on your target market. Who are your customers? Who will you target? Who makes the decisions? Determine how you can best reach potential customers.
• Evaluate your competition. Your marketing plan must set you apart from your competition, and you can't stand out unless you  know  your competition. (It's hard to stand out from a crowd if you don't know where the crowd stands.) Know your competitors by gathering information about their products, service, quality, pricing, and advertising campaigns. In marketing terms, what does your competition do that works well? What are their weaknesses? How can you create a marketing plan that highlights the advantages you offer to customers?
• Consider your brand. How customers perceive your business makes a dramatic impact on sales. Your marketing program should consistently reinforce and extend your brand. Before you start to market your business, think about how you want your marketing to reflect on your business and your products and services. Marketing is the face of your to potential customers--make sure you put your best face forward.
• Focus on benefits. What problems do you solve? What benefits do you deliver? Customers don't think in terms of products--they think in terms of benefits and solutions. Your marketing plan should clearly identify benefits customers will receive. Focus on what customers  get  instead of on what you provide. (Take Dominos; theoretically they're in the pizza business, but really they're a delivery business.)
• Focus on differentiation. Your products and services have to stand out from the competition in some way. How will you compete in terms of price, product, or service?

Then focus on providing detail and backup for your marketing plan.

• What is your budget for sales and marketing efforts? 
• How will you determine if your initial marketing efforts are successful? In what ways will you adapt if your initial efforts do not succeed?
• Will you need sales representatives (inside or external) to promote your products?
• Can you set up public relations activities to help market your business?

The Sales and Marketing section for our cycling rental business could start something like this:

Target Market

The target market for Blue Mountain Cycling Rentals is western VA, eastern WV, southwestern MD, and northern NC. While customers in the counties surrounding the George Washington National Forest make up 35 percent of our potential customer base, much of our market travels from outside that geographic area.

Marketing Strategy

Our marketing strategy will focus on three basic initiatives:

• Road signage. Access to the forest is restricted to a few primary entrances, and visitors reach those entrances after traveling on one of several main roadways. Since customers currently rent bicycles in the local town of Harrisonburg, road signage will communicate our value proposition to all potential customers.
• Web initiatives. Our website will attract potential visitors to the resort. We will partner with local businesses that serve our target market to provide discounts and incentives.
• Promotional events. We will hold regular events with professional cyclists, like demonstrations and autograph signings, to bring more customers to the store as well as to extend the athletes' "brand" to our brand.

Pricing Strategy

We will not be the low-cost provider for our target market. Our goal is to provide mid- to high-end equipment. However, we will create web-based loyalty programs to incent customers to set up online profiles and reserve and renew equipment rentals online, and provide discounts for those who do. Over time we will be able to market specifically to those customers.

Just as in the Market Opportunity section, you may want to include a few more categories. For example, if your business involves a commission-compensated sales force, describe your Sales Programs and incentives. If you distribute products to other companies or suppliers and those distribution efforts will impact your overall marketing plans, lay out your Distribution Strategy.

The key is to show you understand your market and you understand how you will reach your market. Marketing and promotions must result in customers--your goal is to thoroughly describe how you will acquire and keep your customers.

Also keep in mind you may want to include examples of marketing materials you have already prepared, like website descriptions, print ads, web-based advertising programs, etc. While you don't need to include samples, taking the time to create actual marketing materials might help you better understand and communicate your marketing plans and objectives.

Make sure your Sales and Marketing section answers the "How will I reach my customers?" question.

Competitive Advantage

The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market.

Every business has competition. Understanding the strengths and weaknesses of your competition--or potential competition--is critical to making sure your business survives and grows. While you don't need to hire a private detective, you do need to thoroughly assess your competition on a regular basis even if you plan to run only a small business.

In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.

Competitive analysis can be incredibly complicated and time-consuming, but it doesn't have to be. Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition.

Profile  Current  Competitors

First, develop a basic profile of each of your current competition. For example, if you plan to open an office supply store, you may have three competing stores in your market.

Online retailers will also provide competition, but thoroughly analyzing those companies will be less valuable unless you also decide you want to sell office supplies online. (Although it's also possible that they--or, say, Amazon--are your  real  competition. Only you can determine that.)

To make the process easier, stick to analyzing companies you will directly compete with. If you plan to set up an accounting firm, you will compete with other accounting firms in your area. If you plan to open a clothing store, you will compete with other clothing retailers in your area.

Again, if you run a clothing store, you also compete with online retailers, but there is relatively little you can do about that type of competition other than to work hard to distinguish yourself in other ways: great service, friendly salespeople, convenient hours, truly understanding your customers, etc.

Once you identify your main competitors, answer these questions about each one. And be objective. It's easy to identify weaknesses in your competition, but less easy (and a lot less fun) to recognize how they may be able to outperform you:

• What are their strengths? Price, service, convenience, and extensive inventory are all areas where you may be vulnerable.
• What are their weaknesses? Weaknesses are opportunities you should plan to take advantage of.
• What are their basic objectives? Do they seek to gain market share? Do they attempt to capture premium clients? See your industry through their eyes. What are they trying to achieve?
• What marketing strategies do they use? Look at their advertising, public relations, etc.
• How can you take market share away from their business?
• How will they respond when you enter the market?

While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. You should already have a feel for the competition's strengths and weaknesses--if you know your market and your industry.

To gather information, you can also:

• Check out their websites and marketing materials. Most of the information you need about products, services, prices, and company objectives should be readily available. If that information is not available, you may have identified a weakness.
• Visit their locations. Take a look around. Check out sales materials and promotional literature. Have friends stop in or call to ask for information.
• Evaluate their marketing and advertising campaigns. How a company advertises creates a great opportunity to uncover the objectives and strategies of that business. Advertising should help you quickly determine how a company positions itself, who it markets to, and what strategies it employs to reach potential customers.
• Browse. Search the Internet for news, public relations, and other mentions of your competition. Search blogs and Twitter feeds as well as review and recommendation sites. While most of the information you find will be anecdotal and based on the opinion of just a few people, you may at least get a sense of how some consumers perceive your competition. Plus you may also get advance warning about expansion plans, new markets they intend to enter, or changes in management.

Keep in mind competitive analysis does more than help you understand your competition. Competitive analysis can also help you identify changes you should make to  your  business strategies. Learn from competitor strengths, take advantage of competitor's weaknesses, and apply the same analysis to your own business plan.

You might be surprised by what you can learn about your business by evaluating other businesses.

Identify  Potential  Competitors

It can be tough to predict when and where new competitors may pop up. For starters, regularly search for news on your industry, your products, your services, and your target market.

But there are other ways to predict when competition may follow you into a market. Other people may see the same opportunity you see. Think about your business and your industry, and if the following conditions exist, you may face competition does the road:

• The industry enjoys relatively high profit margins
• Entering the market is relatively easy and inexpensive
• The market is growing--the more rapidly it is growing the greater the risk of competition
• Supply and demand is off--supply is low and demand is high
• Very little competition exists, so there is plenty of "room" for others to enter the market

In general terms, if serving your market seems easy you can safely assume competitors will enter your market. A good business plan anticipates and accounts for new competitors.

Now distill what you've learned by answering these questions in your business plan:

• Who are my current competitors? What is their market share? How successful are they?
• What market do current competitors target? Do they focus on a specific customer type, on serving the mass market, or on a particular niche?
• Are competing businesses growing or scaling back their operations? Why? What does that mean for your business?
• How will your company be different from the competition? What competitor weaknesses can you exploit? What competitor strengths will you need to overcome to be successful?
• What will you do if competitors drop out of the marketplace? What will you do to take advantage of the opportunity?
• What will you do if new competitors enter the marketplace? How will you react to and overcome new challenges?

The Competitive Analysis section for our cycling rental business could start something like this:

Primary Competitors

Our nearest and only competition is the bike shops in Harrisonburg, VA. Our next closest competitor is located over 100 miles away.

The in-town bike shops will be strong competitors. They are established businesses with excellent reputations. On the other hand, they offer inferior-quality equipment and their location is significantly less convenient.

Secondary Competitors

We do not plan to sell bicycles for at least the first two years of operation. However, sellers of new equipment do indirectly compete with our business since a customer who buys equipment no longer needs to rent equipment.

Later, when we add new equipment sales to our operation, we will face competition from online retailers. We will compete with new equipment retailers through personalized service and targeted marketing to our existing customer base, especially through online initiatives.

Opportunities

• By offering mid- to high-end quality equipment, we provide customers the opportunity to "try out" bikes they may wish to purchase at a later date, providing additional incentive (besides cost savings) to use our service.
• Offering drive-up, express rental return services will be seen as a much more attractive option compared with the hassle of renting bikes in Harrisonburg and transporting them to intended take-off points for rides.
• Online initiatives like online renewals and online reservations enhances customer convenience and positions us as a cutting-edge supplier in a market largely populated, especially in the cycling segment, by customers who tend to be early technology adapters.
• Renting bikes and cycling equipment may be perceived by some of our target market as a commodity transaction. If we do not differentiate ourselves in terms of quality, convenience, and service, we could face additional competition from other entrants to the market.
• One of the bike shops in Harrisonburg is a subsidiary of a larger corporation with significant financial assets. If we, as hoped, carve out a significant market share, the corporation may use those assets to increase service, improve equipment quality, or cut prices.

While your business plan is primarily intended to convince  you  that your business makes sense, keep in mind most investors look closely at your competitive analysis. A common mistake made by entrepreneurs is assuming they will simply "do it better" than any competition.

Experienced businesspeople know you will face stiff competition: showing you understand your competition, understand your strengths and weaknesses relative to that competition, and that you understand you will have to adapt and change based on that competition is critical.

And, even if you do not ever plan to seek financing or bring in investors, you absolutely must know your competition.

The Competitive Analysis section helps you answer the "Against whom?" question.

The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability . Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory--all the stuff involved in operating your business on a day-to-day basis.

Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. After all, while it may not seem natural to analyze your market or your competition, most budding entrepreneurs tend to spend a lot of time thinking about how they will  run  their businesses.

Your goal is to answer the following key questions:

• What facilities, equipment, and supplies do you need?
• What is your organizational structure? Who is responsible for which aspects of the business?
• Is research and development required, either during start up or as an ongoing operation? If so, how will you accomplish this task?
• What are your initial staffing needs? When and how will you add staff?
• How will you establish business relationships with vendors and suppliers? How will those relationships impact your day-to-day operations?
• How will your operations change as the company grows? What steps will you take to cut costs if the company initially does not perform up to expectations?

Operations plans should be highly specific to your industry, your market sector, and your customers. Instead of providing an example like I've done with other sections, use the following to determine the key areas your plan should address:

Location and Facility Management

In terms of location, describe:

• Zoning requirements
• The type of building you need
• The space you need
• Power and utility requirements
• Access: Customers, suppliers, shipping, etc.
• Specialized construction or renovations
• Interior and exterior remodeling and preparation

Daily Operations

• Production methods
• Service methods
• Inventory control
• Sales and customer service
• Receiving and Delivery
• Maintenance, cleaning, and re-stocking
• Licenses and permits
• Environmental or health regulations
• Patents, trademarks, and copyrights

Personnel Requirements

• Typical staffing
• Breakdown of skills required
• Recruiting and retention
• Policies and procedures
• Pay structures
• Anticipated inventory levels
• Turnover rate
• Seasonal fluctuations in demand
• Major suppliers
• Back-up suppliers and contingency plans
• Credit and payment policies

Sound like a lot? It can be, but not all of the above needs to be in your business plan.

You should think through and create a detailed plan for each category, but you won't need to share the results with the people who read your business plan

Working through each issue and developing concrete operations plans helps you in two major ways:

• If you don't plan to seek financing or outside capital, you can still take advantage of creating a comprehensive plan that addresses all of your operational needs.
• If you do seek financing or outside capital, you may not include all the detail in your business plan--but you will have answers to any operations questions at your fingertips.

Think of Operations as the "implementation" section of your business plan. What do you need to do? How will you get it done? Then create an overview of that plan to make sure your milestones and timeline make sense.

That way the operations section answers the "How?" question.

Many investors and lenders feel the quality and experience of the management team is one of the most important factors used to evaluate the potential of a new business.

But putting work into the Management Team section will not only benefit people who may read your plan. It will also help  you  evaluate the skills, experiences, and resources your management team will need . Addressing your company's needs during implementation will make a major impact on your chances for success.

• Who are the key leaders? (If actual people have not been identified, describe the type of people needed.) What are their experiences, educational backgrounds, and skills?
• Do your key leaders have industry experience? If not, what experience do they bring to the business that is applicable?
• What duties will each position perform? (Creating an organization chart might be helpful.) What authority is granted to and what responsibilities are expected in each position?
• What salary levels will be required to attract qualified candidates for each position? What is the salary structure for the company, by position?

The Management Team section for our cycling rental business could start something like this:

Jim Rouleur, Owner and Manager

Joe has over 20 years experience in the cycling business. He served for 10 years as a product manager for Acme Bikes. After that he was the operations manager of Single Track Cycles, a full-service bike shop located in Bend, Oregon. He has an undergraduate degree in marketing from Duke University and an MBA from Virginia Commonwealth University. (A complete resume for Mr. Rouleur can be found in the Appendix.)

Mary Gearset, Assistant Manager

Mary was the 2009 U.S. Mountain Biking National Champion. She worked in product development for High Tec frames, creating custom frames and frame modifications for professional cyclists. She also has extensive customer service and sales experience, having worked for four years as the online manager of Pro Parts Unlimited, an online retailer of high-end cycling equipment and accessories.

In some instances you may also wish to describe your staffing plans.

For example, if you manufacture a product or provide a service and will hire a key skilled employee, describe that employee's credentials. Otherwise, include staffing plans in the Operations section.

One key note: Don't be tempted to add a "name" to your management team in hopes of attracting investors. Celebrity management team members may attract the attention of your readers, but experienced lenders and investors will immediately ask what role that person will actually play in the running of the business--and in most cases those individuals won't play any meaningful role.

If you don't have a lot of experience--but are willing to work hard to overcome that lack of experience--don't be tempted to include people in your plan who will not actually work in the business.

If you can't survive without help, that's okay. In fact, that's expected; no one does anything worthwhile on their own. Just make plans to get help from the  right  people.

Finally, when you create your Management section, focus on credentials but pay extra attention to what each person actually will  do . Experience and reputation are great, but action is everything.

That way your Management section will answer the "Who is in charge?" question.

Numbers tell the story. Bottom line results indicate the success or failure of any business.

Financial projections and estimates help entrepreneurs, lenders, and investors or lenders objectively evaluate a company's potential for success. If a business seeks outside funding, providing comprehensive financial reports and analysis is critical.

But most important, financial projections tell you whether your business has a chance of being viable--and if not let you know you have more work to do.

Most business plans include at least five basic reports or projections:

• Balance Sheet: Describes the company cash position including assets, liabilities, shareholders, and earnings retained to fund future operations or to serve as funding for expansion and growth. It indicates the financial health of a business.
• Income Statement: Also called a Profit and Loss statement, this report lists projected revenue and expenses. It shows whether a company will be profitable during a given time period.
• Cash Flow Statement: A projection of cash receipts and expense payments. It shows how and when cash will flow through the business; without cash, payments (including salaries) cannot be made.
• Operating Budget: A detailed breakdown of income and expenses; provides a guide for how the company will operate from a "dollars" point of view.
• Break-Even Analysis: A projection of the revenue required to cover all fixed and variable expenses. Shows when, under specific conditions, a business can expect to become profitable.

It's easy to find examples of all of the above. Even the most basic accounting software packages include templates and samples. You can also find templates in Excel and Google Docs. (A quick search like "google docs profit and loss statement" yields plenty of examples.)

Or you can work with an accountant to create the necessary financial projections and documents. Certainly feel free to do so, but first play around with the reports yourself. While you don't need to be an accountant to run a business, you do need to understand your numbers, and the best way to understand your numbers is usually to actually work with your numbers.

But ultimately the tools you use to develop your numbers are not as important as whether those numbers are as accurate as possible--and whether those numbers help you decide whether to take the next step and put your business plan into action.

Then Financial Analysis can help you answer the most important business question: "Can we make a profit?"

Some business plans include less essential but potentially important information in an Appendix section. You may decide to include, as backup or additional information:

• Resumes of key leaders
• Additional descriptions of products and services
• Legal agreements
• Organizational charts
• Examples of marketing and advertising collateral
• Photographs of potential facilities, products, etc.
• Backup for market research or competitive analysis
• Additional financial documents or projections

Keep in mind creating an Appendix is usually only necessary if you're seeking financing or hoping to bring in partners or investors. Initially the people reading your business plan don't wish to plow through reams and reams of charts, numbers, and backup information. If one does want to dig deeper, fine--he or she can check out the documents in the Appendix.

That way your business plan can share your story clearly and concisely.

Otherwise, since you created your business plan, you should already have the backup.

Tying It All Together

While you may use your business plan to attract investors, partners, suppliers, etc., never forget that the goal of your business plan is to convince  you  that your idea makes sense. 

Because ultimately it's your time, your money, and your effort on the line.

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How to Write a Great Business Report Conclusion: Everything You Need to Know

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When creating a comprehensive business report for your company, most of your time and energy will go into writing the main section of your report.

Once you come to the conclusion, you will probably be exhausted and you may feel the urge to just ‘wrap it up’ as soon as possible.

This can be a costly mistake.

Your conclusion carries the same importance as all the other sections of the report since it leaves the final impression on the reader.

How you conclude your business report has a direct impact on the way in which the readers will respond to the important information you gathered.

The business report may be spectacular, but without a convincing conclusion, all your efforts may deteriorate.

In this article, we are going to teach you how to write a compelling conclusion that will leave a huge impression on all your readers.

What Is Conclusion in Business Report Writing?

How do you write a conclusion for a report, types of business report conclusions, improve business reporting with databox.

No matter which type of business report you have written, you will need a good conclusion to sum up all the critical information.

A business report conclusion is the last section of the document used for summarizing the most important information, providing a final word to the readers.

Through the conclusion, you are able to convey the main message of your business document. You use it to outline the report as a whole, remind the readers of the main pain points, and present the key findings and decisions.

Depending on whether you have written a shorter or longer business report, the conclusion length may vary, but it should always be included. It is a sign of good organization and it can make the readers understand the pain points much easier.

To put it simply, the conclusion is supposed to create the impression among the readers that the purpose of the report has been achieved.

Business report conclusions have a lot of similarities to executive summaries, which is why a lot of people tend to confuse these two.

However, there are some important things that differentiate them. These include:

• Executive summaries are mainly focused on displaying what the report will be about, while conclusions are an overview of what was discussed in the report.
• Executive summaries provide readers with a broad overview of the business report, while the conclusion summarizes the key pain points and most important data.
• Executive summaries should convince the readers to continue reading the report, while the conclusion should persuade them to take certain action.
• Conclusions tend to include CTAs (Call to Action), which isn’t the case with executive summaries.

Related : Executive Reporting: Management Reporting Best Practices & Report Examples

Now that you understand what a conclusion is and why it’s so important to include it in your report, let’s show you how you can write the perfect one and impress your readers.

Follow these steps to create a great business report conclusion.

Choose the Position

Include the right information, summarize the contents, facts and statistics, maintain a positive tone, develop a cta.

There are two places where conclusions are most commonly placed – at the end of the executive summary and at the end of the entire report.

For business plan reports, the common practice is to place the conclusion at the end of the executive summary.

This way, you make the first step through the executive summary template and introduce the plan’s main pain points and funding needs. Then, you create a conclusion to summarize these numbers to your potential investors, which directly impacts their decision to go over the executive summary once more, this time reading it more thoroughly.

For other types of business reports, the conclusion will generally be placed at the end of the whole report. Established companies use these business reports to track performances and data from important departments, which is why the conclusion should primarily focus on briefly reviewing the key metrics you included and emphasizing the company’s main strengths.

The information you put into the conclusion also depends on whether you are a new startup looking to attract investments or an established company that wants to track performances and asses objectives.

To raise money, startups should include this type of information:

• Financial needs
• The benefits of their product and how it can affect the market
• Target audience/ideal customer persona
• How the product can attract new customers
• Marketing and sales strategy
• Competitive landscape and analysis
• The expertise of the main members of the company
• Financial forecasts (next 3-5 years)
• Launching plan

Existing companies should include information such as:

• Mission statement
• Performance history
• Data that showcases business growth
• Financial summary
• Overall goals and objectives

While these types of details are important, they aren’t universal for all reports. Your primary goal should be to include the most important data from your specific document and keep the conclusion concise and understandable.

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The best way to convey your main message is by explaining it in detail throughout the business report and then summarizing it to recap the main points.

When creating the business report, take notes of the most important information that you should later highlight in the conclusion.

Make sure to avoid any extra details since they are already provided within the report. Only include the key points that explain why the business report itself is useful to the company.

Also, don’t use any additional information that you didn’t include in the report. This can only confuse your readers and send mixed messages.

You should prepare some facts, statistics, and data to support the statements in your conclusion. No matter if the reader is a potential investor or the key stakeholders in your company, you will want to include some evidence to back up your claims.

This makes the conclusion much more convincing and the audience will see that your forecasts aren’t based only on vague assumptions.

The tone in your conclusion should match the rest of the document and the best way to leave an impression on the audience is by using a professional and positive tone throughout the whole report.

After going through the conclusion, the readers should feel interested and enthusiastic to support the growth of your organization.

Make sure you exude confidence by using strong and active language.

Including a call to action at the end of your conclusion helps you persuade the readers to support the goals you set up.

This can be anything from “Join us at X enterprises” or “Invest in X and become a part of the success”.

A good CTA includes strong action words through which you emphasize the benefits of investors joining your firm or key stakeholders supporting your objectives.

After you are finished writing the conclusion, go over it once again to make sure there aren’t any spelling, grammar, or punctuation mistakes you overlooked. The conclusion should be clear, precise, and easy to go understand.

You can even ask a colleague or a friend to read it since it’s always helpful to have an extra set of eyes. Ask their opinion on how the conclusion makes them feel and whether it was easy to go through.

As we said, depending on which type of business report you have written and what is included in it, there are a few different types of conclusions you should differentiate.

Let’s walk you through them.

Conclusion with a Prediction

Conclusion with a major problem, conclusion with a quote, conclusion with a summary.

If your report focuses on a decision or strategy that already took place, you can write a conclusion that predicts the outcomes of that specific strategy.

You can include financial forecasts, sales expectations, and overall growth predictions. Make sure to also back up your predictions with sufficient evidence.

Writing this type of conclusion can be a bit tricky. You don’t want to come off strong and repeat the same issue over and over again. However, you do want the readers to take the issue seriously and realize why it is important that everyone focuses on solving it as soon as possible.

Be direct, but also lenient. Describe why that issue is important and provide a few ways on how you can solve it. Keep it brief and memorable.

Ending your conclusion with a powerful quotation can leave a great impression on the readers. However, you should be very careful when choosing the right quote.

You can’t just throw in some saying from Shakespeare and wrap it up. It is best to quote someone influential in the industry in such a way that it reinforces your message.

When writing your short but meaningful summary, don’t go into detail about your main points again. Keep it as brief as possible and only remind the readers of the most important information.

Also, you should remember that a conclusion doesn’t have to include only one of these things. Mixing up a summary and a prediction can be a powerful combination, so always try to figure out a few different ways to convey your message and then choose the right one.

Business reporting is one of the indispensable activities within a company, but it is also one of the most time-consuming. 

The traditional way of creating business reports has always been a daunting task for executives around the world – hours spent copying and pasting, checking different tools for data, tracking the performance each week, and constantly updating the reports manually.

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With our customizable dashboards , you will save both time and energy by tracking all of your important data in one place and updating it in real-time. You can connect your favorite devices and monitor business performances in one comprehensive report.

Additionally, you will also be able to prepare beautiful and understandable reports by using some of our advanced visualization tools. With just a few clicks, you can visualize all of the key metrics and turn them into professional-looking graphs and charts.

Sign up for free and improve your business reporting process in no time.

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What Is a Business Plan?

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

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

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

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

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

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

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

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

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

Harvard Business Review. " How to Write a Winning Business Plan ."

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

SCORE. " When and Why Should You Review Your Business Plan? "

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12-step Business Plan guide for start-ups and small firms

Our comprehensive 2500-word guide on writing a business plan serves as an outline for anyone who is thinking of starting a small business or improving an existing one.

The sections in this guide are the essential components of any business plan and the main points a potential investor or bank will look for when considering investing in or lending money to your business.

Writing one can be helpful even if you never present your plan to anyone else.

It is best not to make the document longer than 25 pages, but anywhere between 20 and 50 pages is acceptable as long as the content is relevant.

We recommend you also read our top 10 business plan tips, including helpful template download links .

Contents of a Business Plan

• Executive review
• Market analysis
• Demand analysis
• Environmental analysis
• Company analysis
• Analysis of the competition
• Marketing strategy
• Success factors
• Economic analysis

1. Objectives

This section explains why you are creating this business plan and what you intend to do.

It could be for different reasons: to seek investors for a new project, launch a new line of products, market the company, or create a new business unit.

• Do not elaborate at all. Get to the point and be brief. Each sentence is important. If a sentence does not contain important information, delete it.

2. Executive Summary

Here, you will review the whole plan and define the market, the product or service, your competitive advantage over the competition, the investment required, and the predicted results over a given period of time.

This section is vital if you require investment to execute the plan. It allows the business owners and potential external investors to understand the plan in a few paragraphs.

More importantly, it also lets the executive or investor quickly see if the project demands more attention without reading the entire plan.

The summary should be simple and well-written, including only the essential information. The proposal should make it clear to the reader what the possibilities of success are.

• Write with a positive and authoritative tone, do not use if’s, do not write ‘we could’, write ‘we will’.
• The reader should have a clear idea of your business plan just by reading this page.

3. Market Analysis

In this chapter, you will define the following:

• Geographical area
• Consumer behaviour
• Market segmentation

3.1 The market is the people or organisations that will participate in the buying and selling processes of the products or services or use these products or services.

3.2 The geographical area refers to a type or range of products in a defined geographical zone, for example, the car market in the USA or the cosmetic market in the UK.

3.3 Once you have defined the market and the geographical area, you need to summarise the consumers’ needs and behaviour. Who are they? Why do they need the product or service?

3.4 Different groups of customers will have different requirements. The market for any product can be split into individual segments, where each segment describes customers with similar requirements, tastes, characteristics, interests, or lifestyles. Segmentation indicates gaps in the market and highlights the requirements of different types of users, enabling products to be positioned to meet those needs.

• If you do not know your market, you can not create a viable plan, so do your homework.
• Think about the behaviour and habits of each of the segments.
• Identify consumer needs that the competition does not cater for, and make sure that these are highlighted clearly in the customer requirements.

4. Demand Analysis

In this section, you are going to make a numerical evaluation of the market and the segments of the market that you have defined in the following areas:

• Potential demand
• Actual demand
• Future demand
• Evolution of demand

4.1 The potential demand is the maximum the consumers could buy in a determined period of time.

4.2 Actual demand is the demand for the product or service this year or the previous year if the data is unavailable. Sales data on a national or regional level can be obtained from many different sources. If no data is available, you need to make estimates using other methods.

4.3 To establish future demand, estimate the increase in demand for the next year as a percentage of actual demand. For example, the video game market will increase by 10% in the next year. You can also make estimate for the medium and long term, 3-5 years would give you information to provide for and create future strategies.

4.4 To see the potential evolution of demand make a graph of historical sales in your sector, using this you can see the market trends and define the phases of the product life cycle. Using the actual, potential and future demand figures and applying them to the market segments previously identified by geographical region, objectives can be created as detailed later.

• Do not commit the error of being over-optimistic with demand forecasts.
• Define the life cycle of your product or service and apply this to future demand.
• The launch phase of many products is slow; sometimes it is better to enter a market after others when the demand has already been created.

5. Environmental Analysis

There are a number of environmental factors that can influence the behaviour of the marketplace, affecting consumers or the competition just as much as you.

To introduce the variables you consider important you can see how they will influence the decisions you have to make or the decisions the consumers make.

Environmental conditions to consider:

• Demographic
• Think about unemployment, average income, interest rate changes and technological advances in your field.
• Analyse the socio-cultural changes in society.
• Compile relevant information using newspapers, magazines, TV and the internet.

6. Company Analysis

This section is like a brief presentation of your company and its capabilities: its history, philosophy, installations, personnel, and financial situation and resources.

The main points to be highlighted are:

• Management team
• Company history
• Technical capability
• Strengths and weaknesses
• Strategic objectives
• Infrastructure, offices, transport

Include some information on the company’s capabilities, how it is expected to work, and the volumes it can handle.

• Be optimistic but realistic.
• Emphasise the major strengths
• Highlight the management team, remembering that potential investors trust them just as much as you with their investments.

7. Analysis of the Competition

Describe your competitors, their history, their resources, their products and services and how they operate in the competitive market place.

In the same way you have analysed your company, do the same for the competition. What are their capabilities, how do they operate, and what volumes can they handle?

• You must understand your competitors in order to attack their marketplace, defend against their moves to increase their share of the market, or, if appropriate, avoid them altogether.
• Do not worry about including information about the competition; everyone has room in the marketplace.
• Include the differences between your business and the competition.
• Be thorough.

8. Marketing Strategy

In marketing strategy, the four principle strategies are:

• Penetrate new markets
• To increase your share of the existing market
• To entrench yourself in the market
• To withdraw from the marketplace

Possible strategic objectives:

• Sales objectives
• Number of clients won
• Profit or margin objectives
• Share of the market
• Penetrate new areas
• Penetrate new market segments
• Positioning objectives
• Launching new products
• Withdrawing products from the marketplace

Now that the business objectives are identified, you need to look at the marketing mix. These are the four elements that are at the heart of marketing: product, price, distribution, and promotion.

Three types of product decisions can be made:

• Create a new product
• Modify a current product
• Withdraw a product

These decisions need to be based on gaps in the current market, gaps in other markets, and the shortfalls of the competition.

The most common pricing objectives are as follows:

• To obtain a profit on the capital invested
• To obtain a profit on sales
• To gain a share of the market

There are three price strategies:

• Pricing low for penetration
• Price to match the competition
• High pricing

These pricing strategies can be applied:

• Generically across all products
• Each line of products has a different pricing structure
• With each product priced independently
• By geographical area

Distribution

Distribution is the movement of merchandise from the place of production to the end consumer and all the processes in between.

All products that you sell can be sold in the same way or can be split by product or line of products, different market segments may be better served in different ways or different geographical regions may be better covered through different channels.

The distribution channel allows the business access to a market, to transport and sell products to the consumer; there are two routes to reach the customer:

• Direct sales. From the manufacturer direct to the end consumer.
• Via resellers. Through agents, wholesale or retail.

Direct sales

Direct sales can be executed via the telephone, through your web page, through salespeople visiting customers, by mail, or through your high-street outlet or office.

Agents organise distribution to the end consumer through wholesale and retail. They will normally offer further services to aid this process including:

• Sales promotion
• A sales team
• Accounts facilities
• Giving credit to clients
• Giving advice on the sector

Distributors

Distributors are companies authorised to distribute products in a determined graphical area.

They will then sell directly to large clients or use wholesale or retail as appropriate.

They buy and sell the product to other wholesalers or retailers.

Retailers sell the product directly to the end consumer. Depending on their activity, location, or product type, they can acquire the product via any or all of the above channels.

Retail takes two forms: independent stores that have one or a few outlets and retail multiples, which may have many outlets over a large geographical area.

Franchising is the process of a set formula being applied by the franchisee that has been set up, tried, tested and proven by the franchisor.

The franchisee is responsible for following the set plan and the franchisor is responsible for supporting the franchisee, providing operational advice and often advertising or promotional material. The franchisee has to pay the franchisor regular royalties or a management fee from the operation and there is often an initial buy in fee.

There are four basic forms of promotion

• Personal sales
• Advertising
• Public relations
• Be direct. Define the essential characteristics of your products and how they satisfy the needs of the market.
• Do not be excessively technical.
• Determining the distribution strategy is very important. Many products fail because they did not organise distribution correctly or supply the necessary resources.
• Be realistic with the promotional budget, remembering that the products or services are still unknown in the marketplace.
• Be very careful when deciding on pricing strategy and all its variants.
• This section is right at the heart of the business plan along with the figures, so be thorough.

9. Success Factors

This section is very important as it summarises why the plan will succeed. You could have a good marketing plan, an excellent management team, sufficient capital and a strong product, but what makes all the things you have to offer different?

Your plan needs a unique selling point or points. What do you have that will make it succeed? These factors could be very different, for example:

• Strong initial advertising
• The ability to offer low prices
• Quality of service
• A product or products with their own unique selling points
• Pre-agreed channels and volumes
• Capacity to innovate or modify products quickly
• Exclusive distribution channels

All businesses, from fruit shops to car manufacturers, cafes to banks, have their own success factors, and in many cases, only one factor creates this success.

For a hairdresser, it could be the quality and price, or just the quality; for EasyJet, it is the price; for Rolls Royce, it is the quality and status; and for a builder, it is a specialist area of expertise. The secret is to identify these points and then highlight them.

• Write only the important points.
• Get to the point and be brief. Each sentence is important. If a sentence does not contain important information, delete it.

10. Financial Analysis

This should include the following information:

10.1 Profit and Loss Statement for previous X years

Company history is imperative when projecting future success if you have been trading previously.

The Profit and Loss accounts give a picture of a company’s trading performance over a period of time in terms of income, sales and expenditure.

10.2 Balance Sheet for previous X years

A Balance Sheet is a snapshot of a company’s assets (what is owned) and liabilities (what is owed).

Total assets should always equal total liabilities, hence the ‘balance’. For example, the money value of what you invest in the business (an asset) is owed to you by the business (a liability).

10.3 Fixed and variable cost projections

Establishing the fixed and variable costs, when combined with the sales figures, will establish the business’s break-even point, the point at which it starts to make a profit.

10.4 Sales projections for the next 3-5 years

Using historical information, your knowledge of the market place and your product or service, you will be able to project future sales.

10.5 Projected Cash Flow analysis for the next 3-5 years

A Cash Flow statement, usually constructed over a year, compares your cash position at the end of the year to the position at the start, and the constant flow of money into and out of the business over that year.

10.6 Projected Profit and Loss statements for the next 3-5 years

You can put together a projected Profit and Loss statement using the projected sales and expenditures.

10.7 Projected Balance Sheets for the next 3-5 years

Projecting a Balance Sheet allows you to see the funds that will be required as the business matures.

• Make sure all graphs and charts are clear and well laid out.
• Prepare all information by year for a period of 3 to 5 years.
• Display at least the first year of Cash Flow information by month.
• Use accounting terms where appropriate, and always be clear when expressing a point.

11. Finance

Here, you need to lay out the capital you require to start the business. Don’t just think about what you need in the start-up phase; also think about any further investment needed at a later date. If requested at the time when required, this will be seen as a failure to plan properly or a failure to execute your plan effectively.

These are the basic ways of obtaining the finance you will require:

• Business associates
• External investors
• Finance companies
• Public grants
• Be brief and to the point; the financial information already supplied will support this section.

12. Conclusion

A business plan conclusion doesn’t need to be very long. It can be pretty brief.

Your conclusion should reiterate the opportunity, highlight the key strengths of your plan, summarise your vision, and remind the reader why your business is in a position to successfully execute the plan.

If you want to raise funding with your plan, you should detail the required finance.

Depending on who the plan is for, you could also include a ‘call-to-action’, telling the readers what they need to do next.

Add any Appendices

Finally, add any appendices that are relevant and strengthen your business plan.

You should include detailed information in an appendix that supports your plan but is too ‘heavy’ to include in the main body. This could include things like additional statistics, research results, or maps.

Business Plan Conclusion Tips

• This is an excellent time to transmit your optimism without exaggerating
• Leave the reader feeling positive

The guide was written with help from the EBP Business Plan Designer Team.

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Business Plan Executive Summary Example & Template

Updated: Jun 3, 2024, 1:03pm

Table of Contents

Components of an executive summary, how to write an executive summary, example of an executive summary, frequently asked questions.

A business plan is a document that you create that outlines your company’s objectives and how you plan to meet those objectives. Every business plan has key sections such as management and marketing. It should also have an executive summary, which is a synopsis of each of the plan sections in a one- to two-page overview. This guide will help you create an executive summary for your business plan that is comprehensive while being concise.

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The executive summary should mimic the sections found in the business plan . It is just a more concise way of stating what’s in the plan so that a reader can get a broad overview of what to expect.

State the company’s mission statement and provide a few sentences on what the company’s purpose is.

Company History and Management

This section describes the basics of where the company is located, how long it has been in operation, who is running it and what their level of experience is. Remember that this is a summary and that you’ll expand on management experience within the business plan itself. But the reader should know the basics of the company structure and who is running the company from this section.

Products or Services

This section tells the reader what the product or service of the company is. Every company does something. This is where you outline exactly what you do and how you solve a problem for the consumer.

This is an important section that summarizes how large the market is for the product or service. In the business plan, you’ll do a complete market analysis. Here, you will write the key takeaways that show that you have the potential to grow the business because there are consumers in the market for it.

Competitive Advantages

This is where you will summarize what makes you better than the competitors. Identify key strengths that will be reasons why consumers will choose you over another company.

Financial Projections

This is where you estimate the sales projections for the first years in business. At a minimum, you should have at least one year’s projections, but it may be better to have three to five years if you can project that far ahead.

Startup Financing Requirements

This states what it will cost to get the company launched and running. You may tackle this as a first-year requirement or if you have made further projections, look at two to three years of cost needs.

The executive summary is found at the start of the business plan, even though it is a summary of the plan. However, you should write the executive summary last. Writing the summary once you have done the work and written the business plan will be easier. After all, it is a summary of what is in the plan. Keep the executive summary limited to two pages so that it doesn’t take someone a long time to peruse what the summary says.

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It might be easier to write an executive summary if you know what to expect. Here is an example of an executive summary that you can use as a template.

Bottom Line

Writing an executive summary doesn’t need to be difficult if you’ve already done the work of writing the business plan itself. Take the elements from the plan and summarize each section. Point out key details that will make the reader want to learn more about the company and its financing needs.

How long is an executive summary?

An executive summary should be one to two pages and no more. This is just enough information to help the reader determine their overall interest in the company.

Does an executive summary have keywords?

The executive summary uses keywords to help sell the idea of the business. As such, there may be enumeration, causation and contrasting words.

How do I write a business plan?

If you have business partners, make sure to collaborate with them to ensure that the plan accurately reflects the goals of all parties involved. You can use our simple business plan template to get started.

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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Kimberlee Leonard has 22 years of experience as a freelance writer. Her work has been featured on US News and World Report, Business.com and Fit Small Business. She brings practical experience as a business owner and insurance agent to her role as a small business writer.

Cassie is a former deputy editor who collaborated with teams around the world while living in the beautiful hills of Kentucky. Focusing on bringing growth to small businesses, she is passionate about economic development and has held positions on the boards of directors of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a content operations manager and copywriting manager.

Nicholas G. Coriano

Business Plan Writer

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Elements of a Business Plan There are seven major sections of a business plan, and each one is a complex document. Read this selection from our business plan tutorial to fully understand these components.

Now that you understand why you need a business plan and you've spent some time doing your homework gathering the information you need to create one, it's time to roll up your sleeves and get everything down on paper. The following pages will describe in detail the seven essential sections of a business plan: what you should include, what you shouldn't include, how to work the numbers and additional resources you can turn to for help. With that in mind, jump right in.

Executive Summary

Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want. This is very important. All too often, what the business owner desires is buried on page eight. Clearly state what you're asking for in the summary.

The statement should be kept short and businesslike, probably no more than half a page. It could be longer, depending on how complicated the use of funds may be, but the summary of a business plan, like the summary of a loan application, is generally no longer than one page. Within that space, you'll need to provide a synopsis of your entire business plan. Key elements that should be included are:

• Business concept. Describes the business, its product and the market it will serve. It should point out just exactly what will be sold, to whom and why the business will hold a competitive advantage.
• Financial features. Highlights the important financial points of the business including sales, profits, cash flows and return on investment.
• Financial requirements. Clearly states the capital needed to start the business and to expand. It should detail how the capital will be used, and the equity, if any, that will be provided for funding. If the loan for initial capital will be based on security instead of equity, you should also specify the source of collateral.
• Current business position. Furnishes relevant information about the company, its legal form of operation, when it was formed, the principal owners and key personnel.
• Major achievements. Details any developments within the company that are essential to the success of the business. Major achievements include items like patents, prototypes, location of a facility, any crucial contracts that need to be in place for product development, or results from any test marketing that has been conducted.

When writing your statement of purpose, don't waste words. If the statement of purpose is eight pages, nobody's going to read it because it'll be very clear that the business, no matter what its merits, won't be a good investment because the principals are indecisive and don't really know what they want. Make it easy for the reader to realize at first glance both your needs and capabilities.

Business Description

Tell them all about it.

The business description usually begins with a short description of the industry. When describing the industry, discuss the present outlook as well as future possibilities. You should also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business. Base all of your observations on reliable data and be sure to footnote sources of information as appropriate. This is important if you're seeking funding; the investor will want to know just how dependable your information is, and won't risk money on assumptions or conjecture.

When describing your business, the first thing you need to concentrate on is its structure. By structure we mean the type of operation, i.e. wholesale, retail, food service, manufacturing or service-oriented. Also state whether the business is new or already established.

In addition to structure, legal form should be reiterated once again. Detail whether the business is a sole proprietorship, partnership or corporation, who its principals are, and what they will bring to the business.

You should also mention who you will sell to, how the product will be distributed, and the business's support systems. Support may come in the form of advertising, promotions and customer service.

Once you've described the business, you need to describe the products or services you intend to market. The product description statement should be complete enough to give the reader a clear idea of your intentions. You may want to emphasize any unique features or variations from concepts that can typically be found in the industry.

Be specific in showing how you will give your business a competitive edge. For example, your business will be better because you will supply a full line of products; competitor A doesn't have a full line. You're going to provide service after the sale; competitor B doesn't support anything he sells. Your merchandise will be of higher quality. You'll give a money-back guarantee. Competitor C has the reputation for selling the best French fries in town; you're going to sell the best Thousand Island dressing.

How Will I Profit?

Now you must be a classic capitalist and ask yourself, "How can I turn a buck? And why do I think I can make a profit that way?" Answer that question for yourself, and then convey that answer to others in the business concept section. You don't have to write 25 pages on why your business will be profitable. Just explain the factors you think will make it successful, like the following: it's a well-organized business, it will have state-of-the-art equipment, its location is exceptional, the market is ready for it, and it's a dynamite product at a fair price.

If you're using your business plan as a document for financial purposes, explain why the added equity or debt money is going to make your business more profitable.

Show how you will expand your business or be able to create something by using that money.

Show why your business is going to be profitable. A potential lender is going to want to know how successful you're going to be in this particular business. Factors that support your claims for success can be mentioned briefly; they will be detailed later. Give the reader an idea of the experience of the other key people in the business. They'll want to know what suppliers or experts you've spoken to about your business and their response to your idea. They may even ask you to clarify your choice of location or reasons for selling this particular product.

The business description can be a few paragraphs in length to a few pages, depending on the complexity of your plan. If your plan isn't too complicated, keep your business description short, describing the industry in one paragraph, the product in another, and the business and its success factors in three or four paragraphs that will end the statement.

While you may need to have a lengthy business description in some cases, it's our opinion that a short statement conveys the required information in a much more effective manner. It doesn't attempt to hold the reader's attention for an extended period of time, and this is important if you're presenting to a potential investor who will have other plans he or she will need to read as well. If the business description is long and drawn-out, you'll lose the reader's attention, and possibly any chance of receiving the necessary funding for the project.

Market Strategies

Define your market.

Market strategies are the result of a meticulous market analysis. A market analysis forces the entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company can be positioned in order to garner its share of sales. A market analysis also enables the entrepreneur to establish pricing, distribution and promotional strategies that will allow the company to become profitable within a competitive environment. In addition, it provides an indication of the growth potential within the industry, and this will allow you to develop your own estimates for the future of your business.

Begin your market analysis by defining the market in terms of size, structure, growth prospects, trends and sales potential.

The total aggregate sales of your competitors will provide you with a fairly accurate estimate of the total potential market. Once the size of the market has been determined, the next step is to define the target market. The target market narrows down the total market by concentrating on segmentation factors that will determine the total addressable market--the total number of users within the sphere of the business's influence. The segmentation factors can be geographic, customer attributes or product-oriented.

For instance, if the distribution of your product is confined to a specific geographic area, then you want to further define the target market to reflect the number of users or sales of that product within that geographic segment.

Once the target market has been detailed, it needs to be further defined to determine the total feasible market. This can be done in several ways, but most professional planners will delineate the feasible market by concentrating on product segmentation factors that may produce gaps within the market. In the case of a microbrewery that plans to brew a premium lager beer, the total feasible market could be defined by determining how many drinkers of premium pilsner beers there are in the target market.

It's important to understand that the total feasible market is the portion of the market that can be captured provided every condition within the environment is perfect and there is very little competition. In most industries this is simply not the case. There are other factors that will affect the share of the feasible market a business can reasonably obtain. These factors are usually tied to the structure of the industry, the impact of competition, strategies for market penetration and continued growth, and the amount of capital the business is willing to spend in order to increase its market share.

Projecting Market Share

Arriving at a projection of the market share for a business plan is very much a subjective estimate. It's based on not only an analysis of the market but on highly targeted and competitive distribution, pricing and promotional strategies. For instance, even though there may be a sizable number of premium pilsner drinkers to form the total feasible market, you need to be able to reach them through your distribution network at a price point that's competitive, and then you have to let them know it's available and where they can buy it. How effectively you can achieve your distribution, pricing and promotional goals determines the extent to which you will be able to garner market share.

For a business plan, you must be able to estimate market share for the time period the plan will cover. In order to project market share over the time frame of the business plan, you'll need to consider two factors:

• Industry growth which will increase the total number of users. Most projections utilize a minimum of two growth models by defining different industry sales scenarios. The industry sales scenarios should be based on leading indicators of industry sales, which will most likely include industry sales, industry segment sales, demographic data and historical precedence.
• Conversion of users from the total feasible market. This is based on a sales cycle similar to a product life cycle where you have five distinct stages: early pioneer users, early users, early majority users, late majority users and late users. Using conversion rates, market growth will continue to increase your market share during the period from early pioneers to early majority users, level off through late majority users, and decline with late users.

Defining the market is but one step in your analysis. With the information you've gained through market research, you need to develop strategies that will allow you to fulfill your objectives.

Positioning Your Business

When discussing market strategy, it's inevitable that positioning will be brought up. A company's positioning strategy is affected by a number of variables that are closely tied to the motivations and requirements of target customers within as well as the actions of primary competitors.

Before a product can be positioned, you need to answer several strategic questions such as:

• How are your competitors positioning themselves?
• What specific attributes does your product have that your competitors' don't?
• What customer needs does your product fulfill?

Once you've answered your strategic questions based on research of the market, you can then begin to develop your positioning strategy and illustrate that in your business plan. A positioning statement for a business plan doesn't have to be long or elaborate. It should merely point out exactly how you want your product perceived by both customers and the competition.

How you price your product is important because it will have a direct effect on the success of your business. Though pricing strategy and computations can be complex, the basic rules of pricing are straightforward:

• All prices must cover costs.
• The best and most effective way of lowering your sales prices is to lower costs.
• Your prices must reflect the dynamics of cost, demand, changes in the market and response to your competition.
• Prices must be established to assure sales. Don't price against a competitive operation alone. Rather, price to sell.
• Product utility, longevity, maintenance and end use must be judged continually, and target prices adjusted accordingly.
• Prices must be set to preserve order in the marketplace.

There are many methods of establishing prices available to you:

• Cost-plus pricing. Used mainly by manufacturers, cost-plus pricing assures that all costs, both fixed and variable, are covered and the desired profit percentage is attained.
• Demand pricing. Used by companies that sell their product through a variety of sources at differing prices based on demand.
• Competitive pricing. Used by companies that are entering a market where there is already an established price and it is difficult to differentiate one product from another.
• Markup pricing. Used mainly by retailers, markup pricing is calculated by adding your desired profit to the cost of the product. Each method listed above has its strengths and weaknesses.
• Distribution

Distribution includes the entire process of moving the product from the factory to the end user. The type of distribution network you choose will depend upon the industry and the size of the market. A good way to make your decision is to analyze your competitors to determine the channels they are using, then decide whether to use the same type of channel or an alternative that may provide you with a strategic advantage.

Some of the more common distribution channels include:

• Direct sales. The most effective distribution channel is to sell directly to the end-user.
• OEM (original equipment manufacturer) sales. When your product is sold to the OEM, it is incorporated into their finished product and it is distributed to the end user.
• Manufacturer's representatives. One of the best ways to distribute a product, manufacturer's reps, as they are known, are salespeople who operate out of agencies that handle an assortment of complementary products and divide their selling time among them.
• Wholesale distributors. Using this channel, a manufacturer sells to a wholesaler, who in turn sells it to a retailer or other agent for further distribution through the channel until it reaches the end user.
• Brokers. Third-party distributors who often buy directly from the distributor or wholesaler and sell to retailers or end users.
• Retail distributors. Distributing a product through this channel is important if the end user of your product is the general consuming public.
• Direct Mail. Selling to the end user using a direct mail campaign.

As we've mentioned already, the distribution strategy you choose for your product will be based on several factors that include the channels being used by your competition, your pricing strategy and your own internal resources.

Promotion Plan

With a distribution strategy formed, you must develop a promotion plan. The promotion strategy in its most basic form is the controlled distribution of communication designed to sell your product or service. In order to accomplish this, the promotion strategy encompasses every marketing tool utilized in the communication effort. This includes:

• Advertising. Includes the advertising budget, creative message(s), and at least the first quarter's media schedule.
• Packaging. Provides a description of the packaging strategy. If available, mockups of any labels, trademarks or service marks should be included.
• Public relations. A complete account of the publicity strategy including a list of media that will be approached as well as a schedule of planned events.
• Sales promotions. Establishes the strategies used to support the sales message. This includes a description of collateral marketing material as well as a schedule of planned promotional activities such as special sales, coupons, contests and premium awards.
• Personal sales. An outline of the sales strategy including pricing procedures, returns and adjustment rules, sales presentation methods, lead generation, customer service policies, salesperson compensation, and salesperson market responsibilities.

Sales Potential

Once the market has been researched and analyzed, conclusions need to be developed that will supply a quantitative outlook concerning the potential of the business. The first financial projection within the business plan must be formed utilizing the information drawn from defining the market, positioning the product, pricing, distribution, and strategies for sales. The sales or revenue model charts the potential for the product, as well as the business, over a set period of time. Most business plans will project revenue for up to three years, although five-year projections are becoming increasingly popular among lenders.

When developing the revenue model for the business plan, the equation used to project sales is fairly simple. It consists of the total number of customers and the average revenue from each customer. In the equation, "T" represents the total number of people, "A" represents the average revenue per customer, and "S" represents the sales projection. The equation for projecting sales is: (T)(A) = S

Using this equation, the annual sales for each year projected within the business plan can be developed. Of course, there are other factors that you'll need to evaluate from the revenue model. Since the revenue model is a table illustrating the source for all income, every segment of the target market that is treated differently must be accounted for. In order to determine any differences, the various strategies utilized in order to sell the product have to be considered. As we've already mentioned, those strategies include distribution, pricing and promotion.

Competitive Analysis

Identify and analyze your competition.

The competitive analysis is a statement of the business strategy and how it relates to the competition. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.

The first step in a competitor analysis is to identify the current and potential competition. There are essentially two ways you can identify competitors. The first is to look at the market from the customer's viewpoint and group all your competitors by the degree to which they contend for the buyer's dollar. The second method is to group competitors according to their various competitive strategies so you understand what motivates them.

Once you've grouped your competitors, you can start to analyze their strategies and identify the areas where they're most vulnerable. This can be done through an examination of your competitors' weaknesses and strengths. A competitor's strengths and weaknesses are usually based on the presence and absence of key assets and skills needed to compete in the market.

To determine just what constitutes a key asset or skill within an industry, David A. Aaker in his book, Developing Business Strategies , suggests concentrating your efforts in four areas:

• The reasons behind successful as well as unsuccessful firms
• Prime customer motivators
• Major component costs
• Industry mobility barriers

According to theory, the performance of a company within a market is directly related to the possession of key assets and skills. Therefore, an analysis of strong performers should reveal the causes behind such a successful track record. This analysis, in conjunction with an examination of unsuccessful companies and the reasons behind their failure, should provide a good idea of just what key assets and skills are needed to be successful within a given industry and market segment.

Through your competitor analysis, you will also have to create a marketing strategy that will generate an asset or skill competitors don't have, which will provide you with a distinct and enduring competitive advantage. Since competitive advantages are developed from key assets and skills, you should sit down and put together a competitive strength grid. This is a scale that lists all your major competitors or strategic groups based upon their applicable assets and skills and how your own company fits on this scale.

Create a Competitive Strength Grid

To put together a competitive strength grid, list all the key assets and skills down the left margin of a piece of paper. Along the top, write down two column headers: "weakness" and "strength." In each asset or skill category, place all the competitors that have weaknesses in that particular category under the weakness column, and all those that have strengths in that specific category in the strength column. After you've finished, you'll be able to determine just where you stand in relation to the other firms competing in your industry.

Once you've established the key assets and skills necessary to succeed in this business and have defined your distinct competitive advantage, you need to communicate them in a strategic form that will attract market share as well as defend it. Competitive strategies usually fall into these five areas:

• Advertising

Many of the factors leading to the formation of a strategy should already have been highlighted in previous sections, specifically in marketing strategies. Strategies primarily revolve around establishing the point of entry in the product life cycle and an endurable competitive advantage. As we've already discussed, this involves defining the elements that will set your product or service apart from your competitors or strategic groups. You need to establish this competitive advantage clearly so the reader understands not only how you will accomplish your goals, but also why your strategy will work.

Design and Development Plan

What you'll cover in this section.

The purpose of the design and development plan section is to provide investors with a description of the product's design, chart its development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.

There are generally three areas you'll cover in the development plan section:

• Product development
• Market development
• Organizational development

Each of these elements needs to be examined from the funding of the plan to the point where the business begins to experience a continuous income. Although these elements will differ in nature concerning their content, each will be based on structure and goals.

The first step in the development process is setting goals for the overall development plan. From your analysis of the market and competition, most of the product, market and organizational development goals will be readily apparent. Each goal you define should have certain characteristics. Your goals should be quantifiable in order to set up time lines, directed so they relate to the success of the business, consequential so they have impact upon the company, and feasible so that they aren't beyond the bounds of actual completion.

Goals For Product Development

Goals for product development should center on the technical as well as the marketing aspects of the product so that you have a focused outline from which the development team can work. For example, a goal for product development of a microbrewed beer might be "Produce recipe for premium lager beer" or "Create packaging for premium lager beer." In terms of market development, a goal might be, "Develop collateral marketing material." Organizational goals would center on the acquisition of expertise in order to attain your product and market-development goals. This expertise usually needs to be present in areas of key assets that provide a competitive advantage. Without the necessary expertise, the chances of bringing a product successfully to market diminish.

With your goals set and expertise in place, you need to form a set of procedural tasks or work assignments for each area of the development plan. Procedures will have to be developed for product development, market development, and organization development. In some cases, product and organization can be combined if the list of procedures is short enough.

Procedures should include how resources will be allocated, who is in charge of accomplishing each goal, and how everything will interact. For example, to produce a recipe for a premium lager beer, you would need to do the following:

• Gather ingredients.
• 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.

The development of procedures provides a list of work assignments that need to be accomplished, but one thing it doesn't provide are the stages of development that coordinate the work assignments within the overall development plan. To do this, you first need to amend the work assignments created in the procedures section so that all the individual work elements are accounted for in the development plan. The next stage involves setting deliverable dates for components as well as the finished product for testing purposes. There are primarily three steps you need to go through before the product is ready for final delivery:

• Preliminary product review . All the product's features and specifications are checked.
• Critical product review . All the key elements of the product are checked and gauged against the development schedule to make sure everything is going according to plan.
• Final product review . All elements of the product are checked against goals to assure the integrity of the prototype.

Scheduling and Costs

This is one of the most important elements in the development plan. Scheduling includes all of the key work elements as well as the stages the product must pass through before customer delivery. It should also be tied to the development budget so that expenses can be tracked. But its main purpose is to establish time frames for completion of all work assignments and juxtapose them within the stages through which the product must pass. When producing the schedule, provide a column for each procedural task, how long it takes, start date and stop date. If you want to provide a number for each task, include a column in the schedule for the task number.

Development Budget

That leads us into a discussion of the development budget. When forming your development budget, you need to take into account all the expenses required to design the product and to take it from prototype to production.

Costs that should be included in the development budget include:

• Material . All raw materials used in the development of the product.
• Direct labor . All labor costs associated with the development of the product.
• Overhead . All overhead expenses required to operate the business during the development phase such as taxes, rent, phone, utilities, office supplies, etc.
• G&A costs . The salaries of executive and administrative personnel along with any other office support functions.
• Marketing & sales . The salaries of marketing personnel required to develop pre-promotional materials and plan the marketing campaign that should begin prior to delivery of the product.
• Professional services . Those costs associated with the consultation of outside experts such as accountants, lawyers, and business consultants.
• Miscellaneous Costs . Costs that are related to product development.
• Capital equipment . To determine the capital requirements for the development budget, you first have to establish what type of equipment you will need, whether you will acquire the equipment or use outside contractors, and finally, if you decide to acquire the equipment, whether you will lease or purchase it.

As we mentioned already, the company has to have the proper expertise in key areas to succeed; however, not every company will start a business with the expertise required in every key area. Therefore, the proper personnel have to be recruited, integrated into the development process, and managed so that everyone forms a team focused on the achievement of the development goals.

Before you begin recruiting, however, you should determine which areas within the development process will require the addition of personnel. This can be done by reviewing the goals of your development plan to establish key areas that need attention. After you have an idea of the positions that need to be filled, you should produce a job description and job specification.

Once you've hired the proper personnel, you need to integrate them into the development process by assigning tasks from the work assignments you've developed. Finally, the whole team needs to know what their role is within the company and how each interrelates with every position within the development team. In order to do this, you should develop an organizational chart for your development team.

Assessing Risks

Finally, the risks involved in developing the product should be assessed and a plan developed to address each one. The risks during the development stage will usually center on technical development of the product, marketing, personnel requirements, and financial problems. By identifying and addressing each of the perceived risks during the development period, you will allay some of your major fears concerning the project and those of investors as well.

Operations & Management

The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business. In fact, within the operations plan you'll develop the next set of financial tables that will supply the foundation for the "Financial Components" section.

The financial tables that you'll develop within the operations plan include:

• The operating expense table
• The capital requirements table
• The cost of goods table

There are two areas that need to be accounted for when planning the operations of your company. The first area is the organizational structure of the company, and the second is the expense and capital requirements associated with its operation.

Organizational Structure

The organizational structure of the company is an essential element within a business plan because it provides a basis from which to project operating expenses. This is critical to the formation of financial statements, which are heavily scrutinized by investors; therefore, the organizational structure has to be well-defined and based within a realistic framework given the parameters of the business.

Although every company will differ in its organizational structure, most can be divided into several broad areas that include:

• Marketing and sales (includes customer relations and service)
• Production (including quality assurance)
• Research and development
• Administration

These are very broad classifications and it's important to keep in mind that not every business can be divided in this manner. In fact, every business is different, and each one must be structured according to its own requirements and goals.

The four stages for organizing a business are:

Calculate Your Personnel Numbers

Once you've structured your business, however, you need to consider your overall goals and the number of personnel required to reach those goals. In order to determine the number of employees you'll need to meet the goals you've set for your business, you'll need to apply the following equation to each department listed in your organizational structure: C / S = P

In this equation, C represents the total number of customers, S represents the total number of customers that can be served by each employee, and P represents the personnel requirements. For instance, if the number of customers for first year sales is projected at 10,110 and one marketing employee is required for every 200 customers, you would need 51 employees within the marketing department: 10,110 / 200 = 51

Once you calculate the number of employees that you'll need for your organization, you'll need to determine the labor expense. The factors that need to be considered when calculating labor expense (LE) are the personnel requirements (P) for each department multiplied by the employee salary level (SL). Therefore, the equation would be: P * SL = LE

Using the marketing example from above, the labor expense for that department would be: 51 * $40,000 = $2,040,000

Calculate Overhead Expenses

Once the organization's operations have been planned, the expenses associated with the operation of the business can be developed. These are usually referred to as overhead expenses. Overhead expenses refer to all non-labor expenses required to operate the business. Expenses can be divided into fixed (those that must be paid, usually at the same rate, regardless of the volume of business) and variable or semivariable (those which change according to the amount of business).

Overhead expenses usually include the following:

• Maintenance and repair
• Equipment leases
• Advertising & promotion
• Packaging & shipping
• Payroll taxes and benefits
• Uncollectible receivables
• Professional services
• Loan payments
• Depreciation

In order to develop the overhead expenses for the expense table used in this portion of the business plan, you need to multiply the number of employees by the expenses associated with each employee. Therefore, if NE represents the number of employees and EE is the expense per employee, the following equation can be used to calculate the sum of each overhead (OH) expense: OH = NE * EE

Develop a Capital Requirements Table

In addition to the expense table, you'll also need to develop a capital requirements table that depicts the amount of money necessary to purchase the equipment you'll use to establish and continue operations. It also illustrates the amount of depreciation your company will incur based on all equipment elements purchased with a lifetime of more than one year.

In order to generate the capital requirements table, you first have to establish the various elements within the business that will require capital investment. For service businesses, capital is usually tied to the various pieces of equipment used to service customers.

Capital for manufacturing companies, on the other hand, is based on the equipment required in order to produce the product. Manufacturing equipment usually falls into three categories: testing equipment, assembly equipment and packaging equipment.

With these capital elements in mind, you need to determine the number of units or customers, in terms of sales, that each equipment item can adequately handle. This is important because capital requirements are a product of income, which is produced through unit sales. In order to meet sales projections, a business usually has to invest money to increase production or supply better service. In the business plan, capital requirements are tied to projected sales as illustrated in the revenue model shown earlier in this chapter.

For instance, if the capital equipment required is capable of handling the needs of 10,000 customers at an average sale of $10 each, that would be $100,000 in sales, at which point additional capital will be required in order to purchase more equipment should the company grow beyond this point. This leads us to another factor within the capital requirements equation, and that is equipment cost.

If you multiply the cost of equipment by the number of customers it can support in terms of sales, it would result in the capital requirements for that particular equipment element. Therefore, you can use an equation in which capital requirements (CR) equals sales (S) divided by number of customers (NC) supported by each equipment element, multiplied by the average sale (AS), which is then multiplied by the capital cost (CC) of the equipment element. Given these parameters, your equation would look like the following: CR = [(S / NC) * AS] * CC

The capital requirements table is formed by adding all your equipment elements to generate the total new capital for that year. During the first year, total new capital is also the total capital required. For each successive year thereafter, total capital (TC) required is the sum of total new capital (NC) plus total capital (PC) from the previous year, less depreciation (D), once again, from the previous year. Therefore, your equation to arrive at total capital for each year portrayed in the capital requirements model would be: TC = NC + PC - D

Keep in mind that depreciation is an expense that shows the decrease in value of the equipment throughout its effective lifetime. For many businesses, depreciation is based upon schedules that are tied to the lifetime of the equipment. Be careful when choosing the schedule that best fits your business. Depreciation is also the basis for a tax deduction as well as the flow of money for new capital. You may need to seek consultation from an expert in this area.

Create a Cost of Goods Table

The last table that needs to be generated in the operations and management section of your business plan is the cost of goods table. This table is used only for businesses where the product is placed into inventory. For a retail or wholesale business, cost of goods sold --or cost of sales --refers to the purchase of products for resale, i.e. the inventory. The products that are sold are logged into cost of goods as an expense of the sale, while those that aren't sold remain in inventory.

For a manufacturing firm, cost of goods is the cost incurred by the company to manufacture its product. This usually consists of three elements:

As in retail, the merchandise that is sold is expensed as a cost of goods , while merchandise that isn't sold is placed in inventory. Cost of goods has to be accounted for in the operations of a business. It is an important yardstick for measuring the firm's profitability for the cash-flow statement and income statement.

In the income statement, the last stage of the manufacturing process is the item expensed as cost of goods, but it is important to document the inventory still in various stages of the manufacturing process because it represents assets to the company. This is important to determining cash flow and to generating the balance sheet.

That is what the cost of goods table does. It's one of the most complicated tables you'll have to develop for your business plan, but it's an integral part of portraying the flow of inventory through your operations, the placement of assets within the company, and the rate at which your inventory turns.

In order to generate the cost of goods table, you need a little more information in addition to what your labor and material cost is per unit. You also need to know the total number of units sold for the year, the percentage of units which will be fully assembled, the percentage which will be partially assembled, and the percentage which will be in unassembled inventory. Much of these figures will depend on the capacity of your equipment as well as on the inventory control system you develop. Along with these factors, you also need to know at what stage the majority of the labor is performed.

Financial Components

Financial statements to include.

Financial data is always at the back of the business plan, but that doesn't mean it's any less important than up-front material such as the business concept and the management team. Astute investors look carefully at the charts, tables, formulas and spreadsheets in the financial section, because they know that this information is like the pulse, respiration rate and blood pressure in a human--it shows whether the patient is alive and what the odds are for continued survival.

Financial statements, like bad news, come in threes. The news in financial statements isn't always bad, of course, but taken together it provides an accurate picture of a company's current value, plus its ability to pay its bills today and earn a profit going forward.

The three common statements are a cash flow statement, an income statement and a balance sheet. Most entrepreneurs should provide them and leave it at that. But not all do. But this is a case of the more, the less merry. As a rule, stick with the big three: income, balance sheet and cash flow statements.

These three statements are interlinked, with changes in one necessarily altering the others, but they measure quite different aspects of a company's financial health. It's hard to say that one of these is more important than another. But of the three, the income statement may be the best place to start.

Income Statement

The income statement is a simple and straightforward report on the proposed business's cash-generating ability. It's a score card on the financial performance of your business that reflects when sales are made and when expenses are incurred. It draws information from the various financial models developed earlier such as revenue, expenses, capital (in the form of depreciation), and cost of goods. By combining these elements, the income statement illustrates just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result--which is either a profit or a loss.

For a business plan, the income statement should be generated on a monthly basis during the first year, quarterly for the second, and annually for each year thereafter. It's formed by listing your financial projections in the following manner:

• Income . Includes all the income generated by the business and its sources.
• Cost of goods . Includes all the costs related to the sale of products in inventory.
• Gross profit margin . The difference between revenue and cost of goods. Gross profit margin can be expressed in dollars, as a percentage, or both. As a percentage, the GP margin is always stated as a percentage of revenue.
• Operating expenses . Includes all overhead and labor expenses associated with the operations of the business.
• Total expenses . The sum of all overhead and labor expenses required to operate the business.
• Net profit . The difference between gross profit margin and total expenses, the net income depicts the business's debt and capital capabilities.
• Depreciation . Reflects the decrease in value of capital assets used to generate income. Also used as the basis for a tax deduction and an indicator of the flow of money into new capital.
• Net profit before interest . The difference between net profit and depreciation.
• Interest . Includes all interest derived from debts, both short-term and long-term. Interest is determined by the amount of investment within the company.
• Net profit before taxes . The difference between net profit before interest and interest.
• Taxes . Includes all taxes on the business.
• Profit after taxes . The difference between net profit before taxes and the taxes accrued. Profit after taxes is the bottom line for any company.

Following the income statement is a short note analyzing the statement. The analysis statement should be very short, emphasizing key points within the income statement.

Cash Flow Statement

The cash-flow statement is one of the most critical information tools for your business, showing how much cash will be needed to meet obligations, when it is going to be required, and from where it will come. It shows a schedule of the money coming into the business and expenses that need to be paid. The result is the profit or loss at the end of the month or year. In a cash-flow statement, both profits and losses are carried over to the next column to show the cumulative amount. Keep in mind that if you run a loss on your cash-flow statement, it is a strong indicator that you will need additional cash in order to meet expenses.

Like the income statement, the cash-flow statement takes advantage of previous financial tables developed during the course of the business plan. The cash-flow statement begins with cash on hand and the revenue sources. The next item it lists is expenses, including those accumulated during the manufacture of a product. The capital requirements are then logged as a negative after expenses. The cash-flow statement ends with the net cash flow.

The cash-flow statement should be prepared on a monthly basis during the first year, on a quarterly basis during the second year, and on an annual basis thereafter. Items that you'll need to include in the cash-flow statement and the order in which they should appear are as follows:

• Cash sales . Income derived from sales paid for by cash.
• Receivables . Income derived from the collection of receivables.
• Other income . Income derived from investments, interest on loans that have been extended, and the liquidation of any assets.
• Total income . The sum of total cash, cash sales, receivables, and other income.
• Material/merchandise . The raw material used in the manufacture of a product (for manufacturing operations only), the cash outlay for merchandise inventory (for merchandisers such as wholesalers and retailers), or the supplies used in the performance of a service.
• Production labor . The labor required to manufacture a product (for manufacturing operations only) or to perform a service.
• Overhead . All fixed and variable expenses required for the production of the product and the operations of the business.
• Marketing/sales . All salaries, commissions, and other direct costs associated with the marketing and sales departments.
• R&D . All the labor expenses required to support the research and development operations of the business.
• G&A . All the labor expenses required to support the administrative functions of the business.
• Taxes . All taxes, except payroll, paid to the appropriate government institutions.
• Capital . The capital required to obtain any equipment elements that are needed for the generation of income.
• Loan payment . The total of all payments made to reduce any long-term debts.
• Total expenses . The sum of material, direct labor, overhead expenses, marketing, sales, G&A, taxes, capital and loan payments.
• Cash flow . The difference between total income and total expenses. This amount is carried over to the next period as beginning cash.
• Cumulative cash flow . The difference between current cash flow and cash flow from the previous period.

As with the income statement, you will need to analyze the cash-flow statement in a short summary in the business plan. Once again, the analysis statement doesn't have to be long and should cover only key points derived from the cash-flow statement.

The Balance Sheet

The last financial statement you'll need to develop is the balance sheet. Like the income and cash-flow statements, the balance sheet uses information from all of the financial models developed in earlier sections of the business plan; however, unlike the previous statements, the balance sheet is generated solely on an annual basis for the business plan and is, more or less, a summary of all the preceding financial information broken down into three areas:

To obtain financing for a new business, you may need to provide a projection of the balance sheet over the period of time the business plan covers. More importantly, you'll need to include a personal financial statement or balance sheet instead of one that describes the business. A personal balance sheet is generated in the same manner as one for a business.

As mentioned, the balance sheet is divided into three sections. The top portion of the balance sheet lists your company's assets. Assets are classified as current assets and long-term or fixed assets. Current assets are assets that will be converted to cash or will be used by the business in a year or less. Current assets include:

• Cash . The cash on hand at the time books are closed at the end of the fiscal year.
• Accounts receivable . The income derived from credit accounts. For the balance sheet, it's the total amount of income to be received that is logged into the books at the close of the fiscal year.
• Inventory . This is derived from the cost of goods table. It's the inventory of material used to manufacture a product not yet sold.
• Total current assets . The sum of cash, accounts receivable, inventory, and supplies.

Other assets that appear in the balance sheet are called long-term or fixed assets. They are called long-term because they are durable and will last more than one year. Examples of this type of asset include:

• Capital and plant . The book value of all capital equipment and property (if you own the land and building), less depreciation.
• Investment . All investments by the company that cannot be converted to cash in less than one year. For the most part, companies just starting out have not accumulated long-term investments.
• Miscellaneous assets . All other long-term assets that are not "capital and plant" or "investments."
• Total long-term assets . The sum of capital and plant, investments, and miscellaneous assets.
• Total assets . The sum of total current assets and total long-term assets.

After the assets are listed, you need to account for the liabilities of your business. Like assets, liabilities are classified as current or long-term. If the debts are due in one year or less, they are classified as a current liabilities. If they are due in more than one year, they are long-term liabilities. Examples of current liabilities are as follows:

• Accounts payable . All expenses derived from purchasing items from regular creditors on an open account, which are due and payable.
• Accrued liabilities . All expenses incurred by the business which are required for operation but have not been paid at the time the books are closed. These expenses are usually the company's overhead and salaries.
• Taxes . These are taxes that are still due and payable at the time the books are closed.
• Total current liabilities . The sum of accounts payable, accrued liabilities, and taxes.

Long-term liabilities include:

• Bonds payable . The total of all bonds at the end of the year that are due and payable over a period exceeding one year.
• Mortgage payable . Loans taken out for the purchase of real property that are repaid over a long-term period. The mortgage payable is that amount still due at the close of books for the year.
• Notes payable . The amount still owed on any long-term debts that will not be repaid during the current fiscal year.
• Total long-term liabilities . The sum of bonds payable, mortgage payable, and notes payable.
• Total liabilities . The sum of total current and long-term liabilities.

Once the liabilities have been listed, the final portion of the balance sheet-owner's equity-needs to be calculated. The amount attributed to owner's equity is the difference between total assets and total liabilities. The amount of equity the owner has in the business is an important yardstick used by investors when evaluating the company. Many times it determines the amount of capital they feel they can safely invest in the business.

In the business plan, you'll need to create an analysis statement for the balance sheet just as you need to do for the income and cash flow statements. The analysis of the balance sheet should be kept short and cover key points about the company.

Source: The Small Business Encyclopedia , Business Plans Made Easy, Start Your Own Business and Entrepreneur magazine.

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