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Write your business plan

Business plans help you run your business.

A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.

Business plans can help you get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you — or investing in your company — is a smart choice.

Pick a business plan format that works for you

There’s no right or wrong way to write a business plan. What’s important is that your plan meets your needs.

Most business plans fall into one of two common categories: traditional or lean startup.

Traditional business plans are more common, use a standard structure, and encourage you to go into detail in each section. They tend to require more work upfront and can be dozens of pages long.

Lean startup business plans are less common but still use a standard structure. They focus on summarizing only the most important points of the key elements of your plan. They can take as little as one hour to make and are typically only one page.

Traditional business plan

Lean startup plan

Traditional business plan format

You might prefer a traditional business plan format if you’re very detail-oriented, want a comprehensive plan, or plan to request financing from traditional sources.

When you write your business plan, you don’t have to stick to the exact business plan outline. Instead, use the sections that make the most sense for your business and your needs. Traditional business plans use some combination of these nine sections.

Executive summary

Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

Company description

Use your company description to provide detailed information about your company. Go into detail about the problems your business solves. Be specific, and list out the consumers, organization, or businesses your company plans to serve.

Explain the competitive advantages that will make your business a success. Are there experts on your team? Have you found the perfect location for your store? Your company description is the place to boast about your strengths.

Market analysis

You'll need a good understanding of your industry outlook and target market. Competitive research will show you what other businesses are doing and what their strengths are. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now's the time to answer these questions.

Organization and management

Tell your reader how your company will be structured and who will run it.

Describe the  legal structure  of your business. State whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you're a sole proprietor or limited liability company (LLC).

Use an organizational chart to lay out who's in charge of what in your company. Show how each person's unique experience will contribute to the success of your venture. Consider including resumes and CVs of key members of your team.

Service or product line

Describe what you sell or what service you offer. Explain how it benefits your customers and what the product lifecycle looks like. Share your plans for intellectual property, like copyright or patent filings. If you're doing  research and development  for your service or product, explain it in detail.

Marketing and sales

There's no single way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs.

Your goal in this section is to describe how you'll attract and retain customers. You'll also describe how a sale will actually happen. You'll refer to this section later when you make financial projections, so make sure to thoroughly describe your complete marketing and sales strategies.

Funding request

If you're asking for funding, this is where you'll outline your funding requirements. Your goal is to clearly explain how much funding you’ll need over the next five years and what you'll use it for.

Specify whether you want debt or equity, the terms you'd like applied, and the length of time your request will cover. Give a detailed description of how you'll use your funds. Specify if you need funds to buy equipment or materials, pay salaries, or cover specific bills until revenue increases. Always include a description of your future strategic financial plans, like paying off debt or selling your business.

Financial projections

Supplement your funding request with financial projections. Your goal is to convince the reader that your business is stable and will be a financial success.

If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now.

Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests.

This is a great place to use graphs and charts to tell the financial story of your business.  

Use your appendix to provide supporting documents or other materials were specially requested. Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, patents, legal documents, and other contracts.

Example traditional business plans

Before you write your business plan, read the following example business plans written by fictional business owners. Rebecca owns a consulting firm, and Andrew owns a toy company.

Lean startup format

You might prefer a lean startup format if you want to explain or start your business quickly, your business is relatively simple, or you plan to regularly change and refine your business plan.

Lean startup formats are charts that use only a handful of elements to describe your company’s value proposition, infrastructure, customers, and finances. They’re useful for visualizing tradeoffs and fundamental facts about your company.

There are different ways to develop a lean startup template. You can search the web to find free templates to build your business plan. We discuss nine components of a model business plan here:

Key partnerships

Note the other businesses or services you’ll work with to run your business. Think about suppliers, manufacturers, subcontractors, and similar strategic partners.

Key activities

List the ways your business will gain a competitive advantage. Highlight things like selling direct to consumers, or using technology to tap into the sharing economy.

Key resources

List any resource you’ll leverage to create value for your customer. Your most important assets could include staff, capital, or intellectual property. Don’t forget to leverage business resources that might be available to  women ,  veterans ,  Native Americans , and  HUBZone businesses .

Value proposition

Make a clear and compelling statement about the unique value your company brings to the market.

Customer relationships

Describe how customers will interact with your business. Is it automated or personal? In person or online? Think through the customer experience from start to finish.

Customer segments

Be specific when you name your target market. Your business won’t be for everybody, so it’s important to have a clear sense of whom your business will serve.

List the most important ways you’ll talk to your customers. Most businesses use a mix of channels and optimize them over time.

Cost structure

Will your company focus on reducing cost or maximizing value? Define your strategy, then list the most significant costs you’ll face pursuing it.

Revenue streams

Explain how your company will actually make money. Some examples are direct sales, memberships fees, and selling advertising space. If your company has multiple revenue streams, list them all.

Example lean business plan

Before you write your business plan, read this example business plan written by a fictional business owner, Andrew, who owns a toy company.

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What Is a Business Plan?

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

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

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

Key Takeaways

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

Investopedia / Ryan Oakley

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

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

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

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

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

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

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

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

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

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

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

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

2 Types of Business Plans

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

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

Why Do Business Plans Fail?

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

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

What Does a Lean Startup Business Plan Include?

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

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

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

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

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

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Business Plan: What It Is + How to Write One

Discover what a business plan includes and how writing one can foster your business’s development.

What is a business plan? 

A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.  

In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes. 

Let’s define two main types of business plans , the traditional business pla n and the lean start-up business plan . Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy , and content strategy in more depth. There are some significant differences to keep in mind [ 1 ]: 

The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors. 

The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan to seek funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks. 

Now that you have a clear business plan definition , continue reading to begin writing a detailed plan that will guide your journey as an entrepreneur.  

How to write a business plan 

In the sections below, you’ll build the following components of your business plan:

Executive summary

Business description 

Products and services 

Competitor analysis 

Marketing plan and sales strategies 

Brand strategy

Financial planning

Explore each section to bring fresh inspiration to the surface and reveal new possibilities for developing your business. You may choose to adapt the sections, skip over some, or go deeper into others, depending on which format you’re using. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any area of your business.  

Read more: What Is a Marketing Plan? And How to Create One

1. Executive summary 

This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan. 

2. Business description 

Use this section to provide detailed information about your company and how it will operate in the marketplace. 

Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, your customers? 

Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more. 

Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.  

Legal structure: If you’ve incorporated your business or registered it with your state as a legal entity such as an S-corp or LLC, include the legal structure here and the rationale behind this choice. 

3. Competitor analysis 

This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following: 

Value proposition: What outcome or experience does this brand promise?

Products and services: How does each one solve customer pain points and fulfill desires? What are the price points? 

Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?  

Sales: What sales process or buyer’s journey does this brand lead customers through?

Read more: What Is Competitor Analysis? And How to Conduct One

4. Products and services

Use this section to describe everything your business offers to its target market . For every product and service, list the following: 

The value proposition or promise to customers, in terms of how they will experience it

How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives

The features or outcomes that make the product better than those of competitors

Your price points and how these compare to competitors

5. Marketing plan and sales strategies 

In this section, you’ll draw from thorough market research to describe your target market and how you will reach them. 

Who are your ideal customers?   

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)? 

What are their daily lives like? 

What problems and challenges do they experience? 

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?  

What messaging will present your products as the best on the market? How will you differentiate messaging from competitors? 

On what marketing channels will you position your products and services?

How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?

Read more: Market Analysis: What It Is and How to Conduct One   

6. Brand strategy 

In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience. 

What are the values that define your brand?

What visual elements give your brand a distinctive look and feel?

How will your marketing messaging reflect a distinctive brand voice, including the tone, diction, and sentence-level stylistic choices? 

How will your brand look and sound throughout the customer journey? 

Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand? 

Read more: What Is a Brand Strategy? And How to Create One

7. Financial planning  

In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].  

Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning. 

How many individual products or service packages do you plan to sell over a specific time period?

List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.

What is your break-even point, or the amount you have to sell to cover all expenses?

Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast

Quantify how much capital you have on hand.

When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.

Business plan key takeaways and best practices

Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors. 

Keep these best practices in mind:

Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.

Make sure everyone on your team has a copy of the business plan and welcome their input as they perform their roles. 

Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success. 

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Ready to start your business? Watch this video on the lean approach from the Entrepreneurship Specialization : 

Article sources

1. US Small Business Administration. “ Write Your Business Plan , https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan." Accessed April 19, 2022.

2. Inc. " How to Write the Financial Section of a Business Plan ,   https://www.inc.com/guides/business-plan-financial-section.html." Accessed April 14, 2022.

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What is a Business Plan? Definition and Resources

9 min. read

Updated May 10, 2024

If you’ve ever jotted down a business idea on a napkin with a few tasks you need to accomplish, you’ve written a business plan — or at least the very basic components of one.

The origin of formal business plans is murky. But they certainly go back centuries. And when you consider that 20% of new businesses fail in year 1 , and half fail within 5 years, the importance of thorough planning and research should be clear.

But just what is a business plan? And what’s required to move from a series of ideas to a formal plan? Here we’ll answer that question and explain why you need one to be a successful business owner.

• What is a business plan?

A business plan lays out a strategic roadmap for any new or growing business.

Any entrepreneur with a great idea for a business needs to conduct market research , analyze their competitors , validate their idea by talking to potential customers, and define their unique value proposition .

The business plan captures that opportunity you see for your company: it describes your product or service and business model , and the target market you’ll serve. 

It also includes details on how you’ll execute your plan: how you’ll price and market your solution and your financial projections .

Reasons for writing a business plan

If you’re asking yourself, ‘Do I really need to write a business plan?’ consider this fact: 

Companies that commit to planning grow 30% faster than those that don’t.

Creating a business plan is crucial for businesses of any size or stage. It helps you develop a working business and avoid consequences that could stop you before you ever start.

If you plan to raise funds for your business through a traditional bank loan or SBA loan , none of them will want to move forward without seeing your business plan. Venture capital firms may or may not ask for one, but you’ll still need to do thorough planning to create a pitch that makes them want to invest.

But it’s more than just a means of getting your business funded . The plan is also your roadmap to identify and address potential risks. 

It’s not a one-time document. Your business plan is a living guide to ensure your business stays on course.

Related: 14 of the top reasons why you need a business plan

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What research shows about business plans

Numerous studies have established that planning improves business performance:

• 71% of fast-growing companies have business plans that include budgets, sales goals, and marketing and sales strategies.
• Companies that clearly define their value proposition are more successful than those that can’t.
• Companies or startups with a business plan are more likely to get funding than those without one.
• Starting the business planning process before investing in marketing reduces the likelihood of business failure.

The planning process significantly impacts business growth for existing companies and startups alike.

Read More: Research-backed reasons why writing a business plan matters

When should you write a business plan?

No two business plans are alike. 

Yet there are similar questions for anyone considering writing a plan to answer. One basic but important question is when to start writing it.

A Harvard Business Review study found that the ideal time to write a business plan is between 6 and 12 months after deciding to start a business. 

But the reality can be more nuanced – it depends on the stage a business is in, or the type of business plan being written.

Ideal times to write a business plan include:

• When you have an idea for a business
• When you’re starting a business
• When you’re preparing to buy (or sell)
• When you’re trying to get funding
• When business conditions change
• When you’re growing or scaling your business

Read More: The best times to write or update your business plan

How often should you update your business plan?

As is often the case, how often a business plan should be updated depends on your circumstances.

A business plan isn’t a homework assignment to complete and forget about. At the same time, no one wants to get so bogged down in the details that they lose sight of day-to-day goals. 

But it should cover new opportunities and threats that a business owner surfaces, and incorporate feedback they get from customers. So it can’t be a static document.

Related Reading: 5 fundamental principles of business planning

For an entrepreneur at the ideation stage, writing and checking back on their business plan will help them determine if they can turn that idea into a profitable business .

And for owners of up-and-running businesses, updating the plan (or rewriting it) will help them respond to market shifts they wouldn’t be prepared for otherwise. 

It also lets them compare their forecasts and budgets to actual financial results. This invaluable process surfaces where a business might be out-performing expectations and where weak performance may require a prompt strategy change. 

The planning process is what uncovers those insights.

Related Reading: 10 prompts to help you write a business plan with AI

• How long should your business plan be?

Thinking about a business plan strictly in terms of page length can risk overlooking more important factors, like the level of detail or clarity in the plan. 

Not all of the plan consists of writing – there are also financial tables, graphs, and product illustrations to include.

But there are a few general rules to consider about a plan’s length:

• Your business plan shouldn’t take more than 15 minutes to skim.
• Business plans for internal use (not for a bank loan or outside investment) can be as short as 5 to 10 pages.

A good practice is to write your business plan to match the expectations of your audience. 

If you’re walking into a bank looking for a loan, your plan should match the formal, professional style that a loan officer would expect . But if you’re writing it for stakeholders on your own team—shorter and less formal (even just a few pages) could be the better way to go.

The length of your plan may also depend on the stage your business is in. 

For instance, a startup plan won’t have nearly as much financial information to include as a plan written for an established company will.

Read More: How long should your business plan be?  

What information is included in a business plan?

The contents of a plan business plan will vary depending on the industry the business is in. 

After all, someone opening a new restaurant will have different customers, inventory needs, and marketing tactics to consider than someone bringing a new medical device to the market. 

But there are some common elements that most business plans include:

• Executive summary: An overview of the business operation, strategy, and goals. The executive summary should be written last, despite being the first thing anyone will read.
• Products and services: A description of the solution that a business is bringing to the market, emphasizing how it solves the problem customers are facing.
• Market analysis: An examination of the demographic and psychographic attributes of likely customers, resulting in the profile of an ideal customer for the business.
• Competitive analysis: Documenting the competitors a business will face in the market, and their strengths and weaknesses relative to those competitors.
• Marketing and sales plan: Summarizing a business’s tactics to position their product or service favorably in the market, attract customers, and generate revenue.
• Operational plan: Detailing the requirements to run the business day-to-day, including staffing, equipment, inventory, and facility needs.
• Organization and management structure: A listing of the departments and position breakdown of the business, as well as descriptions of the backgrounds and qualifications of the leadership team.
• Key milestones: Laying out the key dates that a business is projected to reach certain milestones , such as revenue, break-even, or customer acquisition goals.
• Financial plan: Balance sheets, cash flow forecast , and sales and expense forecasts with forward-looking financial projections, listing assumptions and potential risks that could affect the accuracy of the plan.
• Appendix: All of the supporting information that doesn’t fit into specific sections of the business plan, such as data and charts.

Read More: Use this business plan outline to organize your plan

• Different types of business plans

A business plan isn’t a one-size-fits-all document. There are numerous ways to create an effective business plan that fits entrepreneurs’ or established business owners’ needs. 

Here are a few of the most common types of business plans for small businesses:

• One-page plan : Outlining all of the most important information about a business into an adaptable one-page plan.
• Growth plan : An ongoing business management plan that ensures business tactics and strategies are aligned as a business scales up.
• Internal plan : A shorter version of a full business plan to be shared with internal stakeholders – ideal for established companies considering strategic shifts.

Business plan vs. operational plan vs. strategic plan

• What questions are you trying to answer? 
• Are you trying to lay out a plan for the actual running of your business?
• Is your focus on how you will meet short or long-term goals? 

Since your objective will ultimately inform your plan, you need to know what you’re trying to accomplish before you start writing.

While a business plan provides the foundation for a business, other types of plans support this guiding document.

An operational plan sets short-term goals for the business by laying out where it plans to focus energy and investments and when it plans to hit key milestones.

Then there is the strategic plan , which examines longer-range opportunities for the business, and how to meet those larger goals over time.

Read More: How to use a business plan for strategic development and operations

• Business plan vs. business model

If a business plan describes the tactics an entrepreneur will use to succeed in the market, then the business model represents how they will make money. 

The difference may seem subtle, but it’s important. 

Think of a business plan as the roadmap for how to exploit market opportunities and reach a state of sustainable growth. By contrast, the business model lays out how a business will operate and what it will look like once it has reached that growth phase.

Learn More: The differences between a business model and business plan

• Moving from idea to business plan

Now that you understand what a business plan is, the next step is to start writing your business plan . 

The best way to start is by reviewing examples and downloading a business plan template. These resources will provide you with guidance and inspiration to help you write a plan.

We recommend starting with a simple one-page plan ; it streamlines the planning process and helps you organize your ideas. However, if one page doesn’t fit your needs, there are plenty of other great templates available that will put you well on your way to writing a useful business plan.

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

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• Reasons to write a business plan
• Business planning research
• When to write a business plan
• When to update a business plan
• Information to include
• Business vs. operational vs. strategic plans

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The Business Planning Process: 6 Steps To Creating a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

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The Better Business Planning Process

The business plan process includes 6 steps as follows:

• Do Your Research
• Calculate Your Financial Forecast
• Draft Your Plan
• Revise & Proofread
• Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. Consider each new step a new project that requires project planning and execution. You may ask yourself the following questions:

• What are your business goals?
• What is the current state of your business?
• What are the current industry trends?
• What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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A business journal from the Wharton School of the University of Pennsylvania

Knowledge at Wharton Podcast

How entrepreneurs can create effective business plans, march 2, 2010 • 16 min listen.

When an entrepreneur has identified a potential business opportunity, the next step is developing a business plan for the new venture. What exactly should the new plan contain? How can the entrepreneur ensure it has the substance to find interest among would-be investors? In this installment of a series of podcasts for the Wharton-CERT Business Plan Competition, Wharton management professor Ian MacMillan explains that business plans must contain several crucial elements: They must articulate a market need; identify products or services to fill that need; assess the resources required to produce those products or services; address the risks involved in the venture; and estimate the potential revenues and profits.

An edited transcript of the interview appears below:

Knowledge at Wharton: Professor MacMillan, thank you for speaking with us about the necessity of entrepreneurs writing business plans. To start with a basic question, what exactly is a business plan?

Ian MacMillan: A business plan to me is a 25-page, maximum 30-page, document, which is a description, analysis and evaluation of a venture that you want to get funded by somebody. It provides critical information to the reader — usually an investor — about you, the entrepreneur, about the market that you are going to enter, about the product that you want to enter with, your strategy for entry, what the prospects are financially, and what the risks are to anybody who invests in the project.

Knowledge at Wharton: Could you explain some of these elements in a little more detail and describe how entrepreneurs can develop an effective business plan?

MacMillan: Let me start by saying that you probably want to avoid developing a detailed business plan unless you have done some initial work. Basically what happens is that by doing a little bit of work, you earn the right to do more work. The first thing I would do before you start a business plan is think about a concept statement. A concept statement is about three to five pages that you put together and share with potential customers or investors just to see if they think it’s worth the energy and effort of doing more detailed work.

The concept statement has a few pieces to it. You are going to have a description of the market need that has to be fulfilled; a description of the products or services that you think are going to fulfill that need; a description of the key resources that you think are going to be needed to provide that product or service; a specification of what resources are currently available; an articulation of what you think the risks are; and then a sort of rough and ready estimate of what you think the profits and profitability will be.

The idea is to put together this concept document and begin to share it around with people who are going to have to support your venture if you take it forward. This allows you to rethink as a result of feedback that you get. You might get word back from the various stakeholders — like potential customers or distributors — that this really wasn’t such a good idea after all. That saves you the energy and effort of putting together a big business plan.

Knowledge at Wharton: Assuming the concept statement works out and you want to move towards the business plan, what else would you need? And where can you find the information? Some information can be hard to locate, especially about your competitors.

MacMillan: It’s really important to go out and speak to your potential customers. You need to find the people who you think will buy your product and talk to them about what dissatisfies them with their current offerings. You should get a sense from them about who is providing the alternative at the moment. Remember, the world has gone for maybe 100,000 years without your idea — and people are getting by; they’re not dying. Something out there is servicing their need. So what is the closest competitive alternative to what you want to offer?

That is what you need to find out — and that involves talking and listening. And for all the enthusiasm you have for your venture or your idea, you really need to listen to people who are eventually going to write a check for it.

Before you go on to write a business plan, you have to do some more work. If the concept statement looks good, then the next step is to do a 15- to 20-page feasibility analysis. This means we are now going to take this idea to the next level. We’ve learned from potential customers and distributors. We’ve learned who the major competitors are. We’ve shaped the idea more clearly, and now we’re digging deeper.

The next challenge you face is to say, well, if you start this business, what evidence do you have that the market actually wants it? Who do you think would write a check for your product? You need to articulate what makes your product or your service feasible. What has to be done in order to make this thing real? You need a description of how you intend to enter the market, a description of who the major competitors are, a preliminary plan — a very rough plan — which specifies what you think your revenues and profits are going to be, and an estimate of what you think the required investment will be. And only then, once you have articulated that, and once again shared it with your stakeholder community, will you perhaps be able to go and write a business plan.

Knowledge at Wharton: Once you have done your feasibility analysis and assuming you get the go ahead from your stakeholders, what is the next step?

MacMillan: The idea of the business plan is to convince the stakeholders. First, what we need to do in a business plan is show that we understand the needs — the unmet needs — of potential customers. Second, we need to understand the strengths and weaknesses of the current most competitive offering out there. Third, we need to understand the skills and capabilities that you and your team have as entrepreneurs. Next we need to understand what the investors need to get out of their investment, because they have to put their money in and they need to have some kind of sense of what they are going to get in terms of returns. In addition, the investment needs to be competitive with alternative investments that the investors might make.

The most important idea in the business plan is to articulate and satisfy the different perspectives of various stakeholders. This process sets in motion some basic requirements in the business plan — to tee up right from the start — evidence that the customer will accept it. Probably a third of the ventures out there that fail are because some person came up with the right product that they thought the world would love and then found out that the customers couldn’t care less. What you want to try to do in a business plan is convince the reader that there are customers out there who will in fact buy the product — not because it’s a great product, but because they want it and they are willing to pay for it.

Moreover, you need to convince the reader that you have some kind of proprietary position that you can defend. You also need to convince your readers that you have an experienced and motivated management team and that you have the experience and the management capabilities to pull it off. You need to convince potential investors that they are going to get a better return than they could get elsewhere, so you need to estimate the net present value of this venture. You need to show that the risk they are taking will be accompanied by appropriate returns for that risk. If we look at the contents of a typical business plan, you need to be able to articulate all these issues in some 25 to 30 pages. People get tired if they have to read too much.

Now let’s look at the various components of the business plan document:

First, you need an executive summary that grabs the attention of the potential investor. This should be done in no more than two pages. The executive summary is meant to convince the potential investor to read further and say, “Wow! This is why I should read more about this business plan.”

Next, you need a market analysis. What is the market? How fast is it growing? How big is it? Who are the major players? In addition, you need a strategy section. It should address questions such as, “How are you going to get into this market? And how are you going to win in that marketplace against current competition?”

After that, you need a marketing plan. How are we going to segment the market? Which parts of the market are we going to attack? How are we going to get the attention of that market and attract it to our product or service?

You also need an operations plan that answers the question, “How are we going to make it happen?” And you need an organization plan, which shows who the people are who will take part in the venture.

You need to list the key events that will take place as the plan unfolds. What are the major things that are going to happen? If your plan happens to be about a physical product, are you going to have a prototype or a model? If it happens to be a software product, are you going to have a piece of software developed — a prototypical piece of software? What are the key milestones by which investors can judge what progress you are making in the investment? Remember that you will not get all your money up front. You will get your funds allocated contingent on your ability to achieve key milestones. So you may as well indicate what those milestones are.

You should also include a hard-nosed assessment of the key risks. For example, what are the market risks? What are the product risks? What are the financial risks? What are the competitive risks? To the extent that you are upfront and honest about it, you will convince your potential investors that you have done your homework. You need to also be able to indicate how you will mitigate these risks — because if you can’t mitigate them, investors are not going to put money into your venture.

After that, what you get down to is a financial plan where you basically do a five-year forecast of what you think the finances are going to be — maybe with quarterly data or projections for the first two years and annual for the next three years.

You need a pro forma profit and loss statement. You need a pro forma balance sheet if you have assets in the balance sheet. You need to have a pro forma cash flow. Your cash flow is important, because it is the cash flow that kills. You may have great profits on your books but you may run out of money — so you need a pro forma cash flow statement. And you need a financing plan that explains, as the project unfolds, what tranches of financing you will need and how will you go about raising that money.

Finally you need a financial evaluation that tells investors, if you make this investment, what is its value going to be to you as an investor. That is basically the structure of the plan.

Knowledge at Wharton: Let’s say you have written a business plan and presented it to your investors. How closely do you have to be tied to the plan? Does it mean that once you are executing against the plan, you should reject new opportunities you find because they are not part of your plan? Or should you build in some flexibility that allows you to explore emerging opportunities?

MacMillan: Is this an opportunity for me to speak about discovery-driven planning?

Knowledge at Wharton: Of course.

MacMillan: Okay. The thing about most entrepreneurial ventures is that your outcome is uncertain — because what you are doing is very new. It is very, very hard to predict what the actual outcome is going to be. One of the most fundamental flaws is that in the face of unfolding uncertainty, you single-mindedly and bloody-mindedly pursue the original objective.

The reality is that the true opportunity will emerge over time. What venture capitalists do is they will put a small amount of money into the project, allow the entrepreneur to enter that market space and then — contingent on performance and contingent on what apparent traction you can get in that market space — completely re-plan to find out what the true opportunity really is. It is insanity to insist that people actually meet their plan as it was originally written.

This doesn’t mean you compromise your objectives. The idea is that I want to keep on trying to meet my objectives, but how I meet them must change as the plan unfolds. That’s basically what led to all the work that Wharton has done in the last few years on discovery driven planning. It’s a way of thinking about planning that says, “I’m going to make small investments. If I’m wrong early, I can fail fast, fail cheap and move on. But as I find out what the true opportunity is, I can aggressively invest in what this opportunity is.”

Knowledge at Wharton: Could you give an example of a company that has used this discovery-driven planning process to take its business to the next level?

MacMillan: One company that has done the most in this area is Air Products. What they have been able to do is use discovery-driven planning to unfold completely different businesses from the ones that they were in. Air Products makes things like carbon dioxide and oxygen and nitrogen. It is a very old-line company. Using discovery-driven planning, they have been able to move aggressively into, for instance, the service sector. Once they recognized that they were able to deliver reliably and predictably in the face of uncertain demand, they developed a set of skills that allowed them to enter the service business where the return on investment and return on assets are far higher than putting a huge plant in place.

Knowledge at Wharton: Professor MacMillan, thanks so much.

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The Business Plan: Creating and Starting the Venture

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What is a Business Plan? Definition, Tips, and Templates

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

Business Plan Template [ Download Now ]

Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

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Free Business Plan [Template]

Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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What is a Business Venture? With Examples + How to Start

Are you looking to become a business owner ? Have you wondered what a business venture is and how to create one? Do you have a small amount of money and don’t know how to start?

Starting a business may seem intimidating , but it can be incredibly rewarding with the right knowledge and strategy. With a successful business venture , the sky is truly the limit with regard to earning potential.

If you’re ready to begin your entrepreneurial journey and start a business, I’m here to provide you with the necessary information and inspiration needed for success .

This blog post will define a business venture and examine some successful examples of what you can sell and how to grow fast. I’ll also provide some advice about how to find a profitable business venture. So read on for all the information you need!

What is a Business Venture?

A business venture is a project or undertaking where entrepreneurs create, organize, and manage their companies. Usually, this involves seeking an opportunity to develop and market a product or service in exchange for money. It can include opening a restaurant or launching a clothing line.

Most business ventures are frequently referred to as small businesses since they usually start with an idea and quite limited finances. They are typically supported by one or more angel investors who have faith in this business concept.

Any new business venture often starts from an existing gap in the market . It could be a demand for a product that consumers require or simply because of the lack of services available to them. No matter what business you are launching, you must have an idea to provide customers with a specific value.

How to Find a Profitable Business Venture

When looking for a business venture, it is important to look for an opportunity you can capitalize on . Your venture should have the potential to create a profit within a reasonable amount of time to stay in business.

There are many different business ideas to make money ! However, to make a better choice, answer the following three questions:

Question 1: Can I craft a convincing offer that people happily pay money for?

The first question to ask yourself when considering creating a successful small business venture is whether you can craft an offer that people will be willing to pay for . You need to provide something of value, a good business idea that customers feel they need, want, and are happy to pay for.

Think about what kind of product or service your potential customers would benefit from. The key is to make sure the offer solves a problem or fills people’s needs and provides them with something they would be willing to pay for.

So, priority number one is straightforward – identify what your potential customers desire and provide them with exactly that. Additionally, make sure you’re appropriately targeting the right individuals at a time when they will be most inclined to purchase.

Question 2: Can I systematically attract leads at low costs?

Once you’ve identified a great product or service, the next step is to focus on attracting potential customers . When it comes to marketing, it’s quite important to focus your efforts on tactics that will cost you as little money as possible.

It could mean taking advantage of organic social media posts, creating content (such as blog posts or videos) that can be shared and liked, or setting up partnerships with influencers who already have a significant and loyal following.

One of the most cost-effective strategies for attracting leads is email marketing . Email newsletters are an excellent way to reach out to potential customers and ensure that your offer is always in front of them.

You can also create targeted ads on different social media platforms such as Facebook, Twitter, and LinkedIn to reach out to people likely interested in your services or products. Ad campaigns like this can be especially useful if you want to sell products and services quicker and without much hassle.

It’s also worth considering offering a discount or giveaway to customers to entice them to make a purchase.

Question 3: Can I convert those leads into customers with relatively low CAC relative to CLV?

It’s not enough to attract leads – the key is to convert them into customers. It means that your offer must be compelling and attractive enough for potential customers to actually purchase it.

To ensure you’re getting a good return on investment, focus on calculating your customer acquisition cost (CAC) relative to your customer lifetime value (CLV) . The CAC is how much you spend to acquire a customer, while the CLV considers all revenue generated from that customer over time.

To discover your CAC , divide your marketing costs by the number of customers acquired in a given period.

The CLV is calculated by taking the average purchase value multiplied by the number of purchases made over a given time frame.

All businesses should strive for a CLV to CAC ratio of 3:1 for each marketing segment. If you spend too generously (for example, 1:1), it can be unprofitable as customers won't cover the cost of acquisition. On the other hand, if you under-invest in customer acquisition and set your bid cap low, then it could mean missing out on profitable customers who have an above-average cost per acquisition.

By taking the time to answer these three key questions, you will be able to determine whether your venture has the potential to create a profitable and sustainable business. The key is to make sure that you are providing something of value that customers feel they need, want, and are happy to pay for!

23 Profitable Business Venture Examples to Inspire You

If you’re looking for some inspiration and ideas, here are 23 profitable business ventures you can consider:

• Bird Tricks – Bird Tricks is an online business that specializes in providing online pet bird training classes. They use various marketing channels, such as YouTube and Instagram, to attract customers.
• Learning Herbs – Learning Herbs is an online herbalism education business. They earn financial gain via classes, webinars, and digital products to help people learn about herbs and their uses.
• Management Consulted – A great enterprise that provides management consulting to organizations, as well as individual and group training sessions. They attract customers using webinars, blog posts, and social media campaigns.
• Bonsai Empire – A community-based business that specializes in bonsai trees and care for them. They achieve profits through digital products, such as e-books, videos, and tutorials.
• The Online Dog Trainer – This business venture is based on providing online dog training services. They use YouTube advertising and targeted marketing campaigns to attract customers.
• Make a Living Writing – A practical venture that focuses on helping you become a successful freelance writer. They generate profits through digital products such as e-books and online courses.
• Goins, Writer – Need some inspiration? Goins, Writer, is a great business venture that focuses on helping people become successful writers. They use social media and blogging to reach out to the audience and profit from selling e-books, workshops, and courses.
• How to Program with Java – A highly successful business enterprise that specializes in teaching Java programming. They attract potential customers with YouTube video tutorials and online courses.
• Donald Robertson – Want to learn how to apply ancient philosophy to everyday life? This business venture is perfect for you. It provides online courses and sells books on Philosophy.
• Study Hacks – This start-up enterprise helps students become more productive and efficient in their studies. They use blogging and Youtube to reach out to the audience while generating profits through digital products such as e-books and courses.
• TaskRabbit – A great business venture that connects customers with skilled taskers who can take care of any task. They promote via Google Ads and generate profits through commission on each job completed via the website or app.
• Wealthy Affiliate – Ready to create a flourishing digital business centered around your passions and hobbies? Look no further than this all-inclusive platform, designed to help you reach success with ease! They generate profits through subscriptions and membership.
• AuditionHacker – A business venture designed to help aspiring musicians. They offer online courses and one-on-one coaching, helping musicians improve their performing skills.
• GooseChase – Looking to add something unique to your business? GooseChase is a perfect choice! This venture provides customers with mobile-based scavenger hunts that can be used for different events and settings. They generate profits through commission fees.
• Edx – A great business venture that specializes in online education. They provide online classes and certifications and generate profits through enrollments and subscriptions.
• Skillshare – Another great business venture that specializes in online learning. They use targeted ads and offer an annual subscription to generate profits.
• The Salon Business – This business venture focuses on helping salon owners manage their businesses. They use various marketing tactics, such as webinars and social media campaigns, to attract customers.
• La Vie En Code – Need to learn a programming language? This business venture offers online coding courses, and they generate profits through enrollments.
• Make Fabulous Cakes – Want to make a name in the cake decoration industry? This business venture provides support in online tutorials on cake decoration. They attract their customers through YouTube videos and generate profits through e-books, online courses, and digital products.
• WODprep – A great network that focuses on helping CrossFit athletes become more efficient and effective. Through subscription fees, online courses, and digital products, they are able to generate substantial profits.
• WoodSkills – Want to learn woodworking? This business venture offers online tutorials and e-books on the subject. They generate profits through their online courses and subscriptions.
• The Ultimate Disneyworld Savings Guide – A business venture geared towards helping customers save money when visiting Disneyworld. They use targeted ads and e-books to reach their audience and increase profits.
• Hardcore Music Studio – Looking to learn how to create a professional music studio? This business venture specializes in teaching aspiring producers and musicians the fundamentals of music production. They generate profits through online courses and digital products.

Here are just some of the many profitable business ventures out there. With the right strategy, any venture can become successful! The key is to identify your target audience, understand their needs, and develop a product or service that meets those needs!

Business Venture vs Startup

Small businesses and startups have a lot of commonalities , but there are also some key differences between them. Small business ventures typically involve one or two people taking risks to generate income from an idea or product. This type of venture usually requires less capital investment , and the goal is often to create a steady stream of revenue that can sustain the business.

On the other hand, startups are typically larger undertakings involving a team of people and more substantial capital investment . The goal of a startup is to create something new or disruptive that will quickly scale up to generate large profits. Startups tend to focus on growth rather than stability and often exploit technology to reach their goals.

Another key difference between small business ventures and startups is the level of risk involved. Small businesses tend to involve less risk , as there is typically less capital investment and a steady revenue stream.

Startups , however, involve much more risk due to their focus on rapid growth and disruptive technology. As a result, the potential rewards from successful startups can be much higher than those of small business ventures. Still, the risk of failure is also greater.

Finally, small businesses and startups take different marketing approaches. Small business owners typically focus on established tactics such as direct mail, print advertising, and word-of-mouth referrals .

Startups often rely more heavily on digital marketing methods such as search engine optimization, social media marketing, and content marketing.

Overall, small business ventures and startups have different goals and approaches regarding risk, capital investment, and marketing. While both types of businesses can be successful, understanding their differences is key to setting realistic expectations for success.

Bottom Line

A business venture is a great way to start and grow a successful business. However, creating a new company requires writing a careful business plan , understanding the target audience , and developing services or products that meet their particular purpose.

Having an idea of which type of venture is right for you, be it a business venture or a startup, can help you make the proper decision and maximize your chances of success.

Consider the amount of risk you’re willing to take on and how quickly you want to make money. With the right strategy, any venture can be successful! Good luck!

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Anastasia belyh.

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.

The Business Plan: Creating and Starting the Venture

The Business Plan: Creating and Starting the Venture Planning as Part of the Business Operation What is the Business Plan Who Should Write the Plan? Scope and Value of the Business Plan—Who Reads the Plan? How do Potential Lenders and Investors Evaluate the Plan? Planning Plan Information Needs Writing the Business Plan Using and Implementing the Business Plan Why Some Business Plans Fail Read less

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• 1. 7-1 The Business Plan: Creating and Starting the Venture
• 2. 7-2 Plans provide guidance and structure in a rapidly changing market environment. Plans get finalized as the entrepreneur has a better sense of the market, the product or services, the management team, and the financial needs of the venture. They help meet short-term or long-term business goals.
• 3. 7-3 A written document describing all relevant internal and external elements, and strategies for starting a new venture. It is an integration of functional plans; addresses short-term and long-term decision making for the first three years of operation.
• 4. 7-4 The plan should be prepared by the entrepreneur in consultation with other sources. The entrepreneur should make an objective assessment of his or her own skills before deciding to hire a consultant.
• 5. 7-5 Who is expected to read the plan can often affect its actual content and focus. In preparing the plan it is important to consider the: Entrepreneur’s perspective. Marketing perspective. Investor's perspective.
• 6. 7-6 Depth and detail in the business plan depend on: Size and scope of the proposed new venture. Size of the market. Competition. Potential growth.
• 7. 7-7 The business plan is valuable because it: Helps determine the viability of the venture in a designated market. Guides the entrepreneur in organizing planning activities. Serves as an important tool in obtaining financing. This process provides a self-assessment by the entrepreneur.
• 8. 7-8 The business plan must reflect: The strengths of management and personnel. The product/service. Available resources. Lenders are interested in the venture’s ability to pay back the debt. Focus on the four Cs of credit - Character, cash flow, collateral, and equity contribution. Banks want an objective analysis of the business opportunity and the risks.
• 9. 7-9 Investors, particularly venture capitalists, have different needs: Place more emphasis on the entrepreneur’s character. Spend much time conducting background checks. Demand high rates of return. Focus on market and financial projections. How do Potential Lenders and Investors Evaluate the Plan? (cont.)
• 11. 7-11 The entrepreneur is expected to “sell” the business concept. Focus on why this is a good opportunity. Provide an overview of the marketing program; sales and profits. Address risks and how to overcome them. Audience includes potential investors who may raise questions. Investors describe these presentations as elevator pitches.
• 12. 7-12 Before creating a business plan, the entrepreneur must undertake a feasibility study. Information for a feasibility study should focus on marketing, finance, and production. Feasible, well-defined goals and objectives need to be established. Based on this, strategy decisions can be established.
• 13. 7-13 Operations Information Needs Location. Manufacturing operations. Raw materials. Equipment. Labor skills. Space. Overhead. Most of the information should be incorporated directly into the business plan. Information Needs (cont.)
• 14. 7-14 The entrepreneur has to prepare a budget of all possible expenditures and revenue sources, including sales and any external available funds. The budget includes capital expenditures, direct operating expenses, and cash expenditures for nonexpense items. Industry benchmarks can be used in preparing the final pro forma statements in the financial plan.
• 15. 7-15 The Internet can provide information for industry analysis, competitor analysis, and measurement of market potential. It is a valuable resource in later-stage planning and decision making; provides opportunities for marketing strategy. An entrepreneur can access: Popular search engines. Competitors’ Web sites. Social networks, blogs, and discussion groups.
• 16. 7-16 A business plan should be comprehensive enough to give any potential investor a complete picture and understanding of the new venture. It should help the entrepreneur clarify his or her thinking about the business.
• 17. 7-17 Introductory Page Name and address of the company. Name of the entrepreneur(s), telephone number, fax number, e-mail address, and Web site address. Description of the company and nature of the business. Statement of financing needed. Statement of confidentiality of report. Writing the Business Plan (cont.)
• 18. 7-18 Executive Summary About two to three pages in length summarizing the complete business plan. Environmental and Industry Analysis The environmental analysis assesses external uncontrollable variables that may impact the business plan. Examples: Economy, culture, technology, legal concerns, etc. The industry analysis involves reviewing industry trends and competitive strategies. Examples: Industry demand, competition, etc. Writing the Business Plan (cont.)
• 19. 7-19 Operations Plan All businesses (manufacturing or nonmanufacturing) should include an operations plan as part of the business plan. It goes beyond the manufacturing process. Describes the flow of goods and services from production to the customer. The major distinction between services and manufactured goods is services involve intangible performances. Writing the Business Plan (cont.)
• 20. 7-20 Marketing Plan It describes market conditions and strategy related to how the product/service will be distributed, priced, and promoted. Marketing research evidence to support any of the marketing decision strategies as well as for forecasting sales should be described in this section. Potential investors regard the marketing plan as critical to the success of the new venture. Writing the Business Plan (cont.)
• 21. 7-21 Organizational Plan It describes the form of ownership and lines of authority and responsibility of members of new venture. In case of a partnership, the terms of the partnership should be included. In case of a corporation, the following should be included: Shares of stock authorized and share options. Names, addresses, and resumes of directors and officers. Organization chart. Writing the Business Plan (cont.)
• 22. 7-22 Assessment of Risk Identifies potential hazards and alternative strategies to meet goals and objectives. The entrepreneur should indicate: Potential risks to the new venture. Impact of the risks. Strategy to prevent, minimize, or respond to the risk. Major risks could result from: Competitor’s reaction. Weaknesses in marketing/ production/ management team. New advances in technology. Writing the Business Plan (cont.)
• 23. 7-23 Financial Plan It contains projections of key financial data that determine economic feasibility and necessary financial investment commitment. It should contain: Summarized forecasted sales and appropriate expenses for at least the first three years. Cash flow figures for three years. Projected balance sheet. Writing the Business Plan (cont.)
• 24. 7-24 Appendix It contains any backup material that is not necessary in the text of the document. It may include: Letters from customers, distributors, or subcontractors. Secondary data or primary research data used to support plan decisions. Leases, contracts, or other types of agreements. Price lists from suppliers and competitors. Writing the Business Plan (cont.)
• 25. 7-25 The business plan is designed to guide the entrepreneur through the first year of operations. The strategy should contain control points to ascertain progress and to initiate contingency plans if necessary. Without good planning employees will not understand the company’s goals. Businesses fail due to entrepreneur’s inability to plan effectively.
• 26. 7-26 Measuring Plan Progress Business plan projections are made on a 12-month schedule but the entrepreneur should frequently check on: Profit and loss statement. Cash flow projections. Inventory control. Production control. Quality control. Sales control. Disbursements. Web site control. Using and Implementing the Business Plan (cont.)
• 27. 7-27 Updating the Plan Entrepreneurs must be sensitive to changes in the company, industry, and market. Determine what revisions are needed if changes are likely to affect the business plan. This helps entrepreneurs to: Maintain reasonable targets and goals. Keep the new venture on a course to high probability of success. Using and Implementing the Business Plan (cont.)
• 28. 7-28 Goals are unreasonable. Objectives are not measurable. Entrepreneur has not made a total commitment to the business or to the family. Lack of experience in the planned business. No sense of potential threats or weaknesses to the business. No customer need was established for the proposed product or service.

15.1 Launching Your Venture

Learning objectives.

By the end of this section, you will be able to:

• Explain the importance of creating and discussing the vision statement
• Determine the documents necessary for managing risks
• Describe company culture and the purpose of a code of conduct
• Summarize how to outline and schedule the operational steps of the launch

The big day has arrived. Your opportunity recognition process noted that your idea solves a significant problem or need, you double-checked that the target market is large enough for potential profitability, you have a method to reach this target market, you have a passion to start this company, and you found resources to support the start-up. Knowing that you analyzed and addressed these topics, you now need to consider some of the more sensitive topics regarding the agreements within your team. Many entrepreneurs overlook the issues discussed here or act on them in a generic manner instead of fitting them to the specific needs of the venture. This lack of due diligence can be detrimental to the success of the business. The advice presented here can help you avoid those same mistakes.

To protect the interests of all parties involved at launch, the team should develop several important documents, such as a founders’ agreement, nondisclosure and noncompete forms, and a code of conduct. Before these are drafted, the team should ensure the venture’s vision statement is agreed upon. (See Entrepreneurial Vision and Goals for a discussion around creating a vision statement.) The entrepreneurship team needs to be in complete agreement on the vision of the venture before they can successfully create the founders’ agreement. If some team members have an interest in creating a lifestyle business (a venture that provides an income that replaces other types of employment), while other team members want to harvest the venture with significant returns, there is a clash between these expectations. An angel investor will also have a strong opinion on the vision for the venture.

Founder’s Agreement, Nondisclosure Agreement, and Noncompete Agreement

Honest and open discussions between the entrepreneurial team members, including your angel investor if an angel investor is part of your initial funding, must take place before opening the venture. These frank discussions need to include a founders’ agreement as well as the identified vision for the venture. The founders’ agreement should describe how individual contributions are valued and fit into the compensation plan and should consider and answer these questions:

• Will the entrepreneurial team members receive a monthly compensation?
• Is there a vesting plan with defined timelines aligned with equity percentages?
• What happens if a team member decides to leave the venture before an exit event? How will that team member be compensated, if at all?

Discussing the entrepreneurial team members’ expectations avoids the problem of an entrepreneurial team member expecting a large equity stake in the company for a short-term commitment to the venture, and other misguided expectations. Such problems can be avoided by addressing the following questions:

• What activities and responsibilities are expected from each team member, and what is the process or action when individual overstep their authority?
• Is there an evaluation period during which the team members discuss each other’s performance? If so, how is that discussion managed, and is there a formal process?
• What happens if a team member fails to deliver on expected actions, or if an unexpected life event occurs?

The founders’ agreement should also outline contingency plans if the business does not continue. The following questions help define those next steps and need to be answered prior to opening the venture:

• If the venture is unsuccessful, how will the dissolution of the venture be conducted?
• What happens to the assets, and how are the liabilities paid?
• How is the decision made to liquidate the venture?
• What happens to the originally identified opportunity? Does a team member have access to that idea, but with a different team, or implemented using a different business model?

Once the venture opens, discussing these topics becomes more complicated because the entrepreneurial team is immersed in various start-up activities, and new information affects their thoughts on these issues. Along with these topics, the founders’ agreement should also state the legal form of ownership, division of ownership (this refers to the division of equity at either the next round of financing, or harvesting of the company), as well as the buyout, or buyback clause. (See Entrepreneurial Journey and Pathways for a discussion on the life cycle stages of a venture, including end stages of harvesting, transition, and reincarnation of the business.)

The buyback clause addresses the situations in which a team member exits the venture prior to the next financing round or harvesting due to internal disputes with team members, illness, death, or other circumstances, clearly stating compensation and profit distribution (with consideration of what is reinvested into the venture). Discussing these topics provides agreement between all team members about how to address these types of situations. The buyback clause should also include a dispute resolution process with agreement on how the dispute solution is implemented. Identifying exactly how these items are handled within the founders’ agreement prevents future conflicts and even legal disputes.

If the entrepreneurship team includes an angel investor, the angel investor typically has the final say in these questions. In the best possible scenario, the angel investor has experience creating a founders’ agreement and can provide valuable insights into working through this document. One common approach to creating this document, given the angel investor’s available time, is for the entrepreneurship team to discuss and agree on the final document, then have the angel investor review the document for final approval. Making Difficult Business Decisions in Response to Challenges will help in finalizing your founders’ agreement.

After completing the formal vision statement and the founders’ agreement, you might want to have an attorney evaluate the documents. This checkpoint can identify gaps or decisions that were not stated clearly. After receiving the examined documents back, the team should once again review the documents for agreement. If everyone is satisfied with the documents, each entrepreneurship team member should sign the document and receive a copy. If, later, the entrepreneurship team decides a change needs to be made to either the vision statement or the founders’ agreement, an addendum can be created, again with all parties agreeing to any changes.

Two other formal documents your team might want to consider include a nondisclosure agreement and a noncompete agreement. These documents can be applied to all employees, including the startup team, with consideration of extending to other contributors such as contractual personnel. A nondisclosure agreement agrees to refrain from disclosing information about the venture. Topics that might be included in this document include trade secrets, key accounts, or any other information of high value to the venture or potentially useful to a competitor. A noncompete agreement states that the person signing the agreement will not work for a competing organization while working for the venture, and generally for a set length of time after leaving the venture. Often, this time period is one year, but it can be longer depending on the know-how or intellectual property the exiting team member has.

Company Culture and Code of Conduct

In conjunction with these formal documents, the founding team should determine the culture they would like to build for their venture. Ideally, the organization’s company culture is made up of the behaviors and beliefs that support the success of the organization. For example, when you walk into a business, is there a bustle of noise and activity, or is the business calm and restrained? This impression results from the organization’s culture. We could compare the difference between walking into a high-end jewelry store and walking into a fast food restaurant. Both businesses have distinctly different cultures. If the venture is highly dynamic with fast-paced decisions and constant change, then the culture should support this type of venture. Perhaps the team wants to create a work hard, play hard culture. In that case, standards that support ad hoc team creation for impromptu discussions should be encouraged, rather than setting up a bureaucratic culture that requires approval of all meetings and deliberation of decisions prior to action. Many tech companies support a work hard, play hard culture. This culture is reinforced with open office spaces that provide opportunities to collaborate with colleagues. Or perhaps ping pong tables and kitchens are provided to encourage interaction. Even the hours of operation contribute to culture creation by either encouraging employees to set their own hours or restricting work hours through regulated entry. In contrast, a more bureaucratically structured environment may fit a venture whose success relies upon compliance with external regulations and the use of highly sensitive or private information. An example of a bureaucratic culture aligns with many financial institutions. The culture within a bank conveys security of our deposited funds; we want a bank to have processes and systems in place that reinforce that we can trust the bank with our finances.

The culture-defining process should include the entrepreneurship team’s creation of a code of conduct . Some organizations develop a code of conduct that includes guiding principles, while other organizations create detailed descriptions of what is acceptable and what isn’t acceptable. Your venture’s code of conduct should fit with your venture’s vision, the culture desired, and the entrepreneurship team’s values. Codes of conduct should be created as documents that include a sensitivity to people within the company as well as the greater community. A code of conduct addresses the values that the organization supports, as well as ethical considerations. The purpose of a code of conduct is to help guide employee actions to align with the desired behavior. Including uniquely specific examples that align with the specific venture, can further communicate the desired behaviors. There are many varieties of codes of conduct; the main point is to create a code that supports the values and behaviors that you want to advance throughout your organization. Figure 15.2 and Figure 15.3 show two approaches to developing a code of conduct that fits the company’s culture and vision. The first example might be used by an advocacy-based venture that desires a principle-based approach to guiding employee behaviors through a code of conduct that provides general guidelines, rather than a more rule-based approach as presented in the second example. These two examples highlight the importance of creating a code of conduct that fits the beliefs and culture that you want to encourage within your venture.

Earlier, we discussed the importance of the lead entrepreneur taking the initiative to discover the investor’s business knowledge and learning about the investor’s previous experience in funding an entrepreneurial venture. The code of conduct is another area that entrepreneurial teams frequently skip over by accepting a generic code of conduct rather than recognizing that there are a multitude of topics, phrases, and principles that should be uniquely designed to fit the venture. These two examples demonstrate the vastly different topics addressed within a code of conduct as evidence for why your code of conduct must fit your intentions for how you will conduct business and support the success of your venture.

These preparatory documents should be personalized to align with the entrepreneurial team and desired behaviors that support the success of the venture. Although standard language and forms addressing these topics are available online, these generic models aren’t intended to meet your unique venture’s needs or the entrepreneurial team’s needs. Taking the time to discuss and prepare these documents pays off in well-crafted documents and aligns the entrepreneurship teams’ vision, goals, and dreams for their venture.

Are You Ready?

Google ’s code of conduct.

Review Google’s code of conduct as you think about developing your own code of conduct. What do you like about Google’s code of conduct? What would you change? How does this example help you in creating a code of conduct for your venture?

Operational Steps to Launch

The next action is outlining the operational steps in the venture creation process. A good approach is to create a chart that identifies how you should proceed. The goal in creating this chart is to recognize what actions need to be taken first. For example, if you need a convection oven for your business, what is the timeline between ordering and receiving the oven? If you need ten employees to manually prepare and package your product, how long will it take to interview and hire each person? According to Glassdoor, the hiring process took 23 days in 2014 and appears to be lengthening in time as organizations become more aware of the importance of hiring the right person. 2 What about training? Will your employees need training on your product or processes before starting the venture? These necessary outcomes need to be identified and then tracked backwards from the desired start date to include the preparatory actions that support the success of the business. You’ve probably heard the phrase that timing is everything. Not only do entrepreneurs need to be concerned about finding the right time to start the venture, they also need the right timing to orchestrate the start-up of the venture.

Below is a sample Gantt chart , a method to track a list of tasks or activities aligned with time intervals. You can use this tool to help identify and schedule the operational steps that need to be completed to launch the venture. One approach to creating a Gantt chart is for each team member to independently create a list of operational activities or tasks required to start the venture that fall under their area of involvement. Then the team can create a master list of activities to discuss: This helps clarify who is contributing to or owning each task. Next, have all team members create their own Gantt chart based on their task list: That is, the time required for each task should be spelled out, including steps that must happen sequentially (when one task cannot be started until another step is complete). Once again, bring all team members together to create one master Gantt chart. This will help ensure that dependencies from member to member are accounted for in the planning. These contingencies and dependencies need to be identified and accommodated for in the master schedule. For example, in Figure 15.4 , we see that Mike Smith cannot perform system testing until Sam Watson has developed the system modules, and in turn, that task can’t be done until Mike Smith has documented the current systems. After completing the chart, agree on assignments of responsibility to follow through on the activities, based on the timelines from the Gantt chart.

See the Suggested Resources for more information on how to use a Gantt chart to assist in tracking the actions needed to support the start-up of your venture and to organize each action based on your necessary timelines. You might want to reach out to other sources to find examples of how other entrepreneurs worked through their operational start-up steps.

Link to Learning

This TED Talk features Paul Tasner sharing how he found himself changing his career at the age of 66, reinforcing the idea that the world of entrepreneurship is open to all people regardless of age, race, background, health, or geographic location. In this presentation, he references a variety of activities he needed to experience in order to understand the process of starting his venture. Regardless of what we learned in our past experiences, launching a new venture includes new experiences and decisions.

After watching this video, do you have some ideas regarding starting a new venture around the idea of senior entrepreneurs? How could you support this group or build a network that creates a community of support for this large population?

Launch Considerations

Sage advice in launching the new venture is to quickly recognize when you don’t have the answer or information to make the best decisions. In the early stage of launching the venture, the level of uncertainty is high, as is the need for agility and spontaneity. Even identifying the actual moment when the venture becomes a new venture can be difficult to determine. Should the venture be recognized as a new venture after receiving the necessary licenses or tax identification number, or when the first sale occurs, or when funds are first invested, or by some other method?

It is also important to keep in mind the end goal of the venture, often referred to as "begin with the end in mind." For example, many highly successful ventures never earn a dollar in sales. Depending on the entrepreneurial team’s vision and the business model selected, the venture could be highly valuable from a harvest, or sale of the venture, perspective. Frequently, this decision is dictated by the angel investor. These people frequently started their own venture, harvested the venture, and as a result have funds available to invest in other new ventures. In most cases, the angel investor expects to cash out of the venture at some point in the future. These are investors who are not interested in holding a long-term equity position but rather expect to grow the venture into a position where another company buys out the venture. This buyout is also known as the harvesting of the venture and the point at which the angel investor receives a percentage of the harvested dollar sale to cover the equity stake in the new venture. Because of this pattern, entrepreneurs are often advised to “begin with the end in mind” when launching a new venture. If the goal is to sell the venture to another company, we want to identify that company before launching the venture. Of course, at this point, this is only a desire or hope, as you cannot require or expect another company to have an interest in your new venture. But you can design the new venture to align with this end goal by making decisions that support this end goal.

Consider the example of YouTube , a startup with zero dollars in sales but with a harvest price of $1.65 billion in stock from Google . The startup team, former PayPal colleagues, understood that the technology was being developed for video searching and recognized that creating a platform to house video-sharing would be desired by companies such as Google at some point in the future. Consider the tight timeline between 2005 when YouTube began supporting video sharing, and the harvest of YouTube to Google in 2006, 21 months later. This example clearly points to the importance of beginning with the end in mind.

Entrepreneur In Action

A new greeting card concept.

Is there a connection between ship architecture and greeting cards? Most people would quickly say there isn’t any connection between these two disparate ideas. However, Wombi Rose and John Wise studied ship architecture, with Wise moving on to a boat-building start-up in Louisiana when they reconnected and decided to start a new venture. While traveling in Vietnam, the two ship architects came across the paper-cutting process of kirigami, similar to origami, but rather than folding paper, the paper is cut. The two engineers realized that the same design software used in building ships could also be used in creating these three-dimensional paper objects. Despite the declining greeting card industry’s sales, these two entrepreneurs decided to enter the greeting card industry with a new approach to greeting cards. Pop-up kirigami art folds flat until the envelope opens, and a kirigami object pops up. Lovepop , the name of their greeting card line, has grown to 30 employees and $6.7 million in revenue. 3

What evidence is there that Rose and Wise followed the concept of “begin with the end in mind”? If Rose and Wise followed this advice, and you were a part of this team, at what point would you begin seeking a buyer for this company? What milestones might you select for harvesting the company? Consider what actions you would accomplish to increase the sale amount to the maximum amount.

Launching your venture is a unique experience for every entrepreneurial team and for every venture. These novel situations and uncertainties create both challenges and new learning opportunities. Accepting that a multitude of possibilities exists and recognizing the importance of researching and discussing actions are valuable to the success of the team. Angel investors hold a wealth of knowledge, and with an equity stake in the venture, these investors should be included in all discussions. If you have an angel investor on your team, you have an added advantage to tap into the expertise available to support the venture. In conjunction with a well-aligned angel investor, conducting research to explore decisions will improve your venture’s success. Although these decisions might seem difficult, the next section addresses how to approach difficult decisions and the role emotional connections for the venture and its team play in those decisions.

• 1 Some language adapted from the U.S. Department of State Sexual Harassment Policy: https://www.state.gov/s/ocr/c14800.htm.
• 2 Glassdoor Team. “How Long Should the Interview Process Take?” June 18, 2015. https://www.glassdoor.com/blog/long-interview-process/
• 3 Stephanie Schomer. “This Hot Greeting Card Company Uses 3-D Design and Origami to Beat Hallmark. Inc . June, 2017. https://www.inc.com/magazine/201706/stephanie-schomer/lovepop-greeting-card-design-awards-2017.html

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The Business Plan : Creating and Starting The Venture

Jun 10, 2013

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The Business Plan : Creating and Starting The Venture. Hadi Santono (Chapter 7, Entrepreneurship, 6 th Edition, 2005 Hisrich, Peters, & Shepherd, McGraw-Hill Irwin). Learning Objectives. To define what the business plan is, who prepares it, who reads it, and how it is evaluated.

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The Business Plan :Creating and Starting The Venture Hadi Santono (Chapter 7, Entrepreneurship, 6th Edition, 2005 Hisrich, Peters, & Shepherd, McGraw-Hill Irwin)

Learning Objectives • To define what the business plan is, who prepares it, who reads it, and how it is evaluated. • To understand the scope and value of the business plan to investors, lenders, employees, suppliers, and customers • To identify information needs and sources for each critical section of the business plan. • To enhance awareness of the ability of the internet as an information resource and marketing tool. • To present examples and a step by step explanation of the business plan. • To present helpful questions for the entrepreneur at each stage of the planning process. • To understand how to monitor the business plan.

Planning as Part of The Business Operation • Planning is a process than never ends for a business. • It is extremely important in the early stages of any new venture when the entrepreneur will need to prepare a preliminary business plan. • As the venture grow up to mature business, planning will continue … • Plan may be short term or long term, strategic or operational.

What is Business Plan? • The business plan is a written document prepared by the entrepreneur that describes all the relevant internal and external elements and strategies for starting a new venture. • It is a integration of functional plans such as marketing, finance, manufacturing, sales and human resources.

Who should write the plan? • The business plan should be prepared by the entrepreneur. • The entrepreneur may consult with many other sources in its preparation, such as lawyers, accountants, marketing consultants, and engineers.

Scope and Value of the Business Plan – Who Reads The Plans? • The business plan may be read by employees, investors, bankers, venture capitalists, suppliers, customers, advisors, and consultants. • There are three perspectives should be considered in preparing the plan : • Perspective of the entrepreneur • Marketing perspective • Investor’s perspective

Scope and Value … • The business plan is valuable to the entrepreneur, potential investors, or even new personnel, who are trying to familiarize themselves with the venture, it goals, and objectives. • It helps determine the viability of the venture in a designated market • It provides guidance to the entrepreneur in organizing his or her planning activities • It serves as an important tool in helping to obtain financing.

How do Potential Lenders and Investors Evaluate The Plan? • Four Cs of Credit: • Characters • Cash flow • Collateral • Equity of Contribution • Another … • Marketable • Payback period • Risk • Feasibility, etc

Presenting The Plan • It is often necessary for an entrepreneur to orally present the business plan before an audience of potential investors. • In this typical forum the entrepreneur would be expected to provide a short (perhaps 20-minutes or half-hour) presentation of the business plan.

Information Needs • Before committing time and energy to preparing a business plan, the entrepreneur should do a quick feasibility study of the business concept to see whether there a any possible barriers to success. • The information, obtainable from many sources should focus on marketing (segmenting, targeting, and positioning), finance (list of all possible expenditures, demand forecast, revenue), and production (location, manufacturing operations, raw materials, equipment, labor skills, space, overhead) . • Internet can be a valuable resource.

Outline of a Business Plan • Introductory Page • Name and address of business • Name(s) and address(es) of principal(s) • Nature of business • Statement of financing needed • Statement of confidentially of report

Outline … • Executive Summary – Three to four pages summarizing the complete business plan • What is the business concept or model? • How is this business concept or model unique? • Who are the individuals starting this business? • How will they make money and how much?

Outline … • Environmental and Industry Analysis • Future outlook and trends • Analysis of competitors • Market segmentation • Industry and market forecasts • Description of Venture • Product(s) • Service(s) • Size of business • Office equipment and personnel • Background of entrepreneurs

Outline … • Production Plan • Manufacturing process (amount subcontracted) • Physical plant • Machinery and equipment • Names of suppliers of raw materials • Operational Plan • Description of company’s operations • Flow of orders for goods and/or services • Technology utilization

Outline … • Marketing Plan • Pricing • Distribution • Promotion • Product forecasts • Controls • Organizational Plan • Form of ownership • Identification of partners or principal shareholders • Authority of principals • Management-team background • Roles and responsibilities of members of organization

Outline … • Assessment of Risk • Evaluate weakness of business • New technologies • Contingency Plans • Financial Plan • Pro forma income statement • Cash flow projections • Pro forma balance sheet • Break-even analysis • Sources and applications of funds

Outline … • Appendix (contains backup material) • Letters • Market research data • Leases or contracts • Price lists from suppliers.

Using and Implementing The Business Plan • The business plan is designed to guide the entrepreneur through the first year of operations. • Implementation of the strategy contain control point to ascertain progress and to initiate contingency plan if necessary. • Business plan not end up in a drawer somewhere once the financing has been attained and the business launched.

Measuring Plan Progress • Entrepreneur should check the profit and loss statement, cash flow projections, and information on inventory, production, quality, sales, collection of accounts receivable, and disbursements for the previous month. • Inventory control • Production control • Quality control • Sales control • Disbursements

Updating the Plan • The most effective business plan can become out-of-date if condition change. • If the change are likely to affect the business plan, the entrepreneur should determine what revisions are needed. • In this manner, the entrepreneur can maintain reasonable targets and goals and keep the new venture on a course that will increase probability of success.

Why Some Business Plans Fails? • Goals set by the entrepreneur are unreasonable. • Goals are not measurable • The entrepreneur has not made a total commitment to the business or to the family. • The entrepreneur has no experience in the planned business. • The entrepreneur has no sense of potential threats or weaknesses to the business. • No customer need was established for the proposed product or service.

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1. Know your competition.

You need to name them and point out what makes you different from (and better than) each of them. But do not disparage your competition.

2. Know your audience.

You may need several versions of your business plan. For example, you may need one for bankers or venture capitalists, one for individual investors, and one for companies that may want to do a joint venture with you rather than fund you.

3. Have proof to back up every claim you make.

If you expect to be the leader in your field in six months, you have to say why you think that is. If you say your product will take the market by storm, you have to support this statement with facts. If you say your management team is fully qualified to make the business a success, be sure staff resumes demonstrate their experience.

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4. Be conservative in all financial estimates and projections.

If you feel certain you'll capture 50 percent of the market in the first year, you can say why you think so and hint at what those numbers may be. But make your financial projections more conservative. For example, a 10 percent market share is much more credible.

5. Be realistic with time and resources available.

If you're working with a big company before you buy a business, you may think things will happen faster than they will once you have to buy the supplies, write the checks, and answer the phones yourself. Being overly optimistic with time and resources is a common error entrepreneurs make. Being realistic is important because it lends credibility to your presentation. Always assume things will take 20 percent longer than you anticipated. Therefore, twenty weeks is now twenty-four weeks.

6. Be logical.

Think like a banker and write what they would want to see.

7. Have a strong management team.

Make sure it has good credentials and expertise. Your team members don't have to have worked in the field. However, you need to draw parallels between what they've done and the skills needed to make your venture succeed. Don't have all the skills you need? Consider adding an advisory board of people skilled in your field and include their resumes.

Write Your Own Business Plan is available now at Entrepreneur Bookstore | Barnes & Noble | Amazon

8. Document why your idea will work.

Have others done something similar that was successful? Have you made a prototype? Include all the variables that can have an impact on the result or outcome of your idea. Show why some of the variables don't apply to your situation or explain how you intend to overcome them or make them better.

9. Describe your facilities and location for performing the work.

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10. Discuss payout options for the investors.

Some investors want a hands-on role. Some want to put associates on your board of directors. Some don't want to be involved in day-to-day activities at all. All investors want to know when they can get their money back and at what rate of return. Most want out within three to five years. Provide a brief description of options for investors, or at least mention that you're ready to discuss options with any serious prospect.

To dig deeper, buy Write Your Own Business Plan and get 1 month of free access to business planning software Liveplan Premium.

How to Start a Rental Business in 2024: A Step-By-Step Guide

• Date: May 9, 2024
• Category: Trends

The year 2024 marks a significant surge in the rental industry growth . The increasing demand for various rental services is pushing the boundaries of this sector, paving the way for an abundance of opportunities in the rental business.

Standing at the forefront of this evolution are entrepreneurs who are seeking to delve into this promising market. Whether it’s equipment rentals, or event rentals, the potential for growth and success is palpable.

This comprehensive guide serves as your roadmap for starting a rental business in 2024 . It offers a detailed step-by-step process to kick-start your entrepreneurial journey in the rental arena. You’ll find valuable tips and insights that cater specifically to your needs as an aspiring rental business owner.

The objective of this guide is not only to help you establish your own rental business but also to equip you with strategies to thrive amidst competition. We have curated essential information on market research, business plan formulation, operational setup, branding, and much more.

So let’s begin this exciting adventure of turning your entrepreneurial dreams into reality. For those ready to seize these opportunities in the rental business, your journey starts here.

1. Identifying Your Niche in the Rental Market

Success in the rental business landscape often depends on finding a unique focus. Identifying your rental business niche not only sets you apart from the competition but also helps you use your resources and strategies effectively.

To start, think about different areas within the rental industry that match your interests and expertise. Consider things like market size, growth potential, and existing competition. Remember, a well-defined niche can be the difference between blending into the crowd and standing out from it.

Once you have some potential niches in mind, it’s time to learn more about them through market research for rentals . This means looking at trends, studying competitors, and understanding what customers want. Here are a few ways to do market research:

• Online Surveys : Use platforms like SurveyMonkey or Google Forms to gather insights about customer preferences and problems.
• Competitor Analysis : Study successful competitors in your chosen niche. Look at what they offer, how they price things, and what customers say about them.
• Industry Reports : Find reports and statistics about the rental market on sites like Statista or IBISWorld to get more information about its size, growth potential, and trends.

By combining passion with profits and supporting it with thorough research, you increase your chances of success in the competitive rental market of 2024. The next step is making sure there’s actually a demand for what you want to offer.

2. Validating the Demand for Your Rental Business Idea

Validation is a crucial step in starting a rental business in 2024. It helps you determine if your rental business idea is viable and has potential for success. The main goal of validation is to confirm that there is a real demand for your proposed service in the market you’re targeting.

There are several strategies you can use to validate your rental business idea:

• Surveys and Questionnaires : Collect direct feedback from potential customers through surveys and questionnaires. You can use online platforms or have face-to-face interactions, depending on your target audience.
• Social Media Polls : Platforms like Instagram and Facebook have poll features that allow you to gauge interest in your rental business idea.
• Market Tests : Conduct small-scale market tests by offering your service at a discounted price or for free initially. This will help you understand how customers respond and if there’s enough demand.
• Competitor Analysis : Evaluate how your competitors are doing. If there are already successful businesses offering similar services, it indicates an existing demand that you can tap into with your unique offerings.

Remember, it’s important to validate with your target audience . Their feedback will help you refine your business idea to better meet their needs and expectations. This step replaces assumptions with solid data that supports the demand for your rental business idea, laying a strong foundation for creating a business plan and starting operations.

3. Creating a Solid Business Plan for Your Rental Venture

Crafting a robust rental business plan is pivotal to your venture’s success. It serves as the blueprint that outlines your business’s vision, operational structure, and financial projections.

Communicating Your Unique Value Proposition

Firstly, your rental business plan should effectively communicate your unique value proposition. This entails detailing what sets your rental services apart from the competition. Whether it’s exclusive inventory, superior customer service, or innovative technology use, be sure to highlight these differentiating factors.

Key Components of a Comprehensive Rental Business Plan

The essential components of a comprehensive rental business plan include:

• Executive Summary: A brief overview of your business concept and key financial data.
• Company Description: An outline of your rental business, including the types of products/services you offer.
• Market Analysis: Detailed insights into your target market, industry trends, and competitive landscape.
• Organizational Structure: The management and staffing structure of your business.
• Services or Product Line: An in-depth description of your rental products/services.
• Marketing & Sales Strategy: A plan for promoting and selling your rentals.
• Financial Projections: An analysis of expected revenues, expenses, and profitability.

Financial Planning for Rentals

Financial planning for rentals is another integral part of writing a rental business plan. This involves conducting thorough financial projections to assess the viability and profitability of your venture. Remember to account for all potential costs such as procurement, maintenance, marketing, distribution, and overheads.

Compare these expenditure estimates against expected income streams to get a clear picture of potential profits. Regularly reviewing and updating these projections as you gather real-world data will aid in keeping your rental venture on track towards success.

Stay tune for the next section on setting up the operational aspects of your rental venture…

4. Setting Up Your Rental Operations

Setting up rental operations involves a series of pivotal steps. These initial actions lay the groundwork for your business, enabling you to manage daily tasks efficiently and provide excellent service.

Acquiring Necessary Inventory

The backbone of your rental business is the inventory you offer. It’s essential to ensure your inventory aligns with the demands of your target market. A strategic approach includes:

• Identifying high-demand items : Utilize the insights gained from your market research to acquire items with a high rental demand.
• Quality over quantity : Prioritize quality when sourcing your inventory. High-quality items not only increase customer satisfaction but also withstand wear and tear, reducing maintenance costs in the long run.
• Economical procurement : Find reliable suppliers that offer competitive pricing without compromising on quality.

Finding a Suitable Location

While an online presence can help you reach a broader audience, a physical location might be required depending on your niche. When securing a location, consider these factors:

• Accessibility : Choose a location easy for customers to find and access.
• Storage space : Ensure there’s adequate space for storing and maintaining your inventory.
• Cost-effectiveness : Weigh the benefits against the cost. If your business model allows, consider starting from home or using a storage unit to save on rent.

After setting up rental operations, the next step will be leveraging technology to streamline these operations. A suitable rental management software can greatly enhance efficiency and provide insights into business performance.

5. Choosing the Right Rental Management Software

In the busy rental market, technology is essential for optimizing your operations. Choosing the right rental management software that fits your business needs is crucial for efficiency and customer satisfaction. Here are some things to consider when selecting rental management software:

Factors to Consider

• Ease of Use : Look for software with a user-friendly interface that you and your team can quickly learn and use, reducing training time and mistakes.
• Features and Functionality : Find software that offers a wide range of tools such as real-time inventory tracking, online reservations, customer management, payment processing, and reporting.
• Scalability : Make sure the software can handle your business growth and increased demand without slowing down.
• Customer Support : Check if the software provider offers reliable customer service, so you can get help whenever you need it.

Why Rentopian Stands Out

For those in need of a powerful solution, Rentopian is one of the top choices for rental software. Their platform is designed to handle all aspects of managing your inventory and bookings smoothly. Here are some key features:

• Real-time inventory tracking: Always know what items are available to prevent double bookings and meet customer commitments.
• Online reservation capabilities: Allow customers to easily book items directly from your website whenever they want.

With Rentopian, improving your operational efficiency becomes effortless. Discover its full potential by visiting Rentopian .

6. Building a Strong Brand for Your Rental Business

As an entrepreneur in the rental industry, your brand is more than just a name or a logo. It’s the embodiment of your business ethos, the experience you provide to customers, and how you differentiate from competition. A strong branding for rental business goes a long way in attracting customers and fostering trust. Here are a few tips to create a compelling brand identity:

Define Your Brand Personality

Think about your brand as a person. What values does it stand for? How would it communicate with customers? This helps in creating an emotional connection with your audience.

Design a Memorable Logo

Aim for simplicity and relevance in your logo design. Remember, this symbol will represent your business across all platforms.

Craft a Unique Tagline

A catchy and meaningful tagline can quickly communicate your value proposition to potential customers.

In addition to branding efforts, having a professional website offers credibility to your rental business. It becomes the digital storefront where customers can learn more about your products and make bookings. When designing your website for rentals, ensure the following key elements are included for an optimal user experience:

• Easy Navigation: Users should find it intuitive to browse through different sections of the site.
• Detailed Product Information: Include high-quality images and comprehensive details about each rental item.
• Clear Call-to-Action (CTA): Guide users towards making a booking or inquiry with visible and compelling CTAs.
• Customer Testimonials: Display reviews from satisfied customers to build trust.

With these steps, you’re on the right path to building a powerful brand that resonates with your target audience.

7. Launching and Promoting Your Rental Business

When you start your rental business, it’s important to generate excitement right from the beginning. You want to create a buzz that grabs the attention of your target audience and gets them interested in what you have to offer. Here are some key steps to take:

Pre-Launch Campaigns

Build anticipation with potential customers by giving them sneak peeks of your inventory, sharing testimonials from beta users, or counting down to your official launch. Social media platforms are great for these types of teasers.

Website Launch

Make sure your professional website is up and running smoothly, optimized for search engines, and designed to provide a great user experience. This is where people will go to learn more about your rental offerings and make bookings, so it’s crucial to make a good impression.

Email Marketing

Send out an email announcement to people who have expressed interest in your market research or pre-launch promotions. Let them know that you’re now open for business and ready to serve their rental needs.

For ongoing marketing of your rental business, it’s important to focus on both short-term results and long-term growth. Here are some strategies to consider:

SEO (Search Engine Optimization)

Optimize your website content with relevant keywords, maintain a blog where you share valuable tips and insights related to your rental niche, and regularly update your listings to improve your visibility in search engine results.

Content Marketing

Create and share compelling content that speaks directly to your target audience. This could include how-to guides, customer success stories, or behind-the-scenes looks at your rental process. The goal is to provide value and build trust with potential customers.

Partnerships

Seek out opportunities to collaborate with other businesses or local influencers who complement your rental offerings. This can help you reach new customer groups and tap into existing networks of potential renters.

Email Relationships

Develop a strategy for staying in touch with leads and nurturing relationships with existing customers through email. This could involve sending out regular updates about new rental options, exclusive offers for loyal renters, or personalized recommendations based on their past bookings.

By balancing immediate impact with sustainable marketing efforts, you’ll be setting yourself up for long-term success in the rental industry.

8. Ensuring Legality: Legal Requirements and Insurance Considerations for Rental Businesses

Before launching your rental business, it is crucial to understand and comply with the legal requirements for rental businesses . These regulations ensure that operations are carried out responsibly and ethically.

Key Legal Obligations

Here are some important legal obligations you need to be aware of:

• Permits and Licenses : Depending on your location and the type of rental business, you may need specific permits or licenses. This might include a general business license, a sales tax license, or specialized permits if you’re renting out vehicles or real estate.
• Consumer Protection Laws : Adhere to consumer rights and fair trading laws. Provide clear contracts, respect privacy policies, and ensure all safety standards are met to protect your customers.

Insurance for Rental Business

Insurance is not just a safety net; it’s a vital component of your business structure. Adequate insurance coverage safeguards against unforeseen circumstances that could otherwise jeopardize your operations.

Types of Policies to Consider:

Here are some types of insurance policies that are important for rental businesses:

• General Liability Insurance : Covers third-party bodily injury 
• Professional Liability Insurance : If you offer advice or services as part of the rental, this can cover negligence claims.
• Workers’ Compensation Insurance : Mandatory if you have employees; covers workplace injuries and related legal fees.

Ensure you consult with legal experts and insurance agents who specialize in the rental industry to get tailored advice for your specific business needs. Compliance with legal standards and having robust insurance in place not only fortifies your business against risks but also builds trust with customers who recognize your commitment to professionalism and safety.

9. Pricing Strategies for Your Rental Inventory

Success in the rental industry goes beyond having quality items to rent; pricing rental inventory plays a crucial role in the profitability and competitiveness of your business. There are numerous pricing models you can adopt, each with its unique implications:

• Cost-Plus Pricing: This model involves adding a markup to the cost of each item in your inventory. The key here is to ensure the markup covers operational expenses and leaves room for profit.
• Competitive Pricing: With this approach, you price your items based on what competitors are charging. Though it might draw customers, ensure it doesn’t compromise profitability.
• Value-Based Pricing: This model is customer-centric. You set prices based on the perceived value of your items to the customers. It requires a deep understanding of your target audience’s needs and preferences.

Striking the right balance between competitiveness and profitability is often challenging. Price too high, and you may lose customers to competitors; price too low, and you risk damaging your profit margins or even giving an impression of inferior quality.

To navigate this, conduct regular market research to stay informed about industry trends and competitor pricing. Use customer feedback to understand their perception of your pricing strategy – do they see it as fair? Is it competitive? Armed with this information, you can adjust your pricing accordingly while ensuring sustainability and growth for your rental business.

10. Overcoming Common Challenges in the Rental Industry

Starting and running a rental business comes with its own set of challenges. Recognizing these obstacles early on allows for preparation and implementation of effective strategies to navigate them successfully.

1. Cash Flow Management for Rentals

Maintaining a healthy cash flow is critical. Here are key strategies:

• Forecasting : Use historical data to predict future income and expenses.
• Flexible Payment Terms : Offer various payment options to clients, catering to their needs while ensuring consistent revenue.
• Cost Control : Keep overhead low without compromising on quality of services.

2. Inventory Control

A robust inventory management system is non-negotiable. It ensures that your products are available when customers need them, preventing common operational issues like double bookings. Consider these points:

• Real-Time Tracking : Implement systems that provide live updates on inventory status.
• Regular Audits : Conduct periodic checks to reconcile physical inventory with recorded data.
• Maintenance Schedules : Keep your inventory in top condition with regular maintenance.

By addressing the challenges faced by rental businesses head-on, you set the groundwork for a resilient and prosperous venture. With careful planning and the right tools, you can build a rental business that not only survives but thrives amidst competition and market fluctuations.

Starting a rental business in 2024 presents a beacon of opportunity within the burgeoning rental industry growth. You are now equipped with actionable strategies and insights that pave the way for a successful venture. As you embark on this entrepreneurial journey, remember that your unique vision and steadfast commitment are the cornerstones of your future success.

Here are some key takeaways to keep in mind as you move forward:

• Take Action : Harness the potential that lies in opportunities in the rental business; let your ambition shape the future of how people rent.
• Leverage Technology : To enhance efficiency and scalability, consider Rentopian, an all-encompassing rental management software designed to simplify your operations.
• Sign Up for Success : With Rentopian at your fingertips, you can manage inventory, bookings, and customer relations seamlessly. Begin with a free trial by visiting Rentopian .

Embrace the challenge ahead with confidence and make your mark in the rental industry. Your entrepreneurial spirit, combined with the right tools and knowledge, will steer you towards achieving your business aspirations.