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How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

The Biggest Challenges Entrepreneurs Face When Starting a Business — and How to Overcome Them

The most common challenges entrepreneurs can expect to face when starting a business.

Starting a business is an exciting undertaking: you get to be your own boss, shape your team, and be responsible for bringing your vision to life. But as any seasoned entrepreneur will tell you, the path to success comes with its fair share of obstacles. From learning curves to financial hurdles, understanding the challenges that lie ahead can help ensure that you have the right mindset and strategies in place to overcome them.

In this post, we break down the most common issues entrepreneurs can expect to face when starting a business, and offer valuable tips from our experts on how to make those first steps easier.

1. Insufficient Business Planning

Starting a business without adequate planning is like setting off on a road trip without a map or GPS: you might have a general sense of the direction you’re headed in, but without a clear route, you’re likely to get lost along the way. Many first-time entrepreneurs underestimate the significance of planning, but having a proper business plan and doing your market research can help guide you to success.

Why Have a Business Plan?

“When you’re building a business, there are lots of opportunities that are before you. But chasing all those opportunities at the same time, when there’s only so much bandwidth to go around, produces diminishing results,” says Christian Dawson, Open Eye’s Co-founder and Executive Partner. “If you chase two rabbits, you catch none. What a business plan gives you is the opportunity to figure out which rabbit you’re going to chase.”

A good business plan should:

• Articulate the company’s mission statement to ensure that all strategies, goals, and actions align with the overarching vision.
• Include a SWOT analysis that identifies the business’s strengths, weaknesses, future opportunities, and potential threats.
• Feature a competitor analysis that provides insights on how to refine your strategies, find your unique selling points, and seize opportunities in the market.
• Have a plan for the business’s growth that can be adapted over time.

What About Market Research?

Focusing too much on the big idea can overshadow the importance of market research, leading to costly mistakes down the line. Understanding your target audience, the demand for your product or service, and potential geographical challenges, will position you for growth and help you make better informed business decisions.

2. Ineffective Marketing

Even the most innovative products or services can falter without good marketing, resulting in wasted resources, slower growth, and missed opportunities. That’s why it’s important to build a comprehensive marketing strategy that considers your target audience, competition, and the channels to reach potential customers.

“The most successful marketing campaigns really take into account the mission and the values of an organization,” says Dawson. “They should consider the specific problems that the group is trying to solve with their business plan, and show that they have a full understanding of the people that they are trying to target.”

3. Founder Knowledge and Skills Gaps

Being a business owner is a steep learning curve, and it’s not uncommon for founders to encounter questions they don’t have the answers to, or discover skill sets they need to develop. To bridge these knowledge gaps, founders should:

• Commit to ongoing learning by reading industry-related books, taking online courses, attending workshops or participating in webinars.
• Keep up with industry news and trends by subscribing to relevant publications, newsletters, and podcasts.
• Consider finding a mentor—either through mentorship programs, business associations, or by reaching out to people in your network—with expertise in areas where you lack knowledge or skills.
• If your budget allows, hire a consultant that can provide specialized guidance on specific challenges or projects.

4. Founder Well-being

Entrepreneurship can take a toll on a founder’s well-being—especially during the first year. The weight of new responsibilities, coupled with the uncertainty of the future, can often lead to self-doubt, isolation, and mental, physical, and emotional exhaustion. But your company can’t be at its best if you’re not at yours, so looking after your health isn’t just important, it’s essential.

“Hustle culture tries to squeeze as much as possible out of individuals in ways that aren’t sustainable,” says Dawson. “The most successful companies that we work with are ones that really do try to create a healthy working environment.”

To prevent burnout and reduce stress, make sure to keep active, eat well, manage your time efficiently, and prioritize work/life balance.

5. Poor Financial Management

Cash flow problems, failure to accurately forecast sales, and overspending can be detrimental for a new company, so entrepreneurs should prioritize financial literacy or enlist the help of a financial advisor.

Dawson recommends outlining metrics for success directly in your business plan, so you can track and manage expenses in a way that gives real visibility into the cost of goods sold. It’s also important to regularly monitor your financial health and, when possible, set aside funds for unexpected expenses.

6. Inadequate Funding Source

Securing money from investors or obtaining debt financing can be difficult, especially for first-time entrepreneurs. But strong financial management and strategic fundraising efforts can mitigate these challenges.

Make sure to explore various funding options, including crowdfunding or sourcing loans from angel investors or venture capitalists. Demonstrating clear value and growth potential to possible investors can increase your chances of securing external funding.

Revenue shortfalls are also common in the early stages of a business and can hinder growth. To prevent this, entrepreneurs should focus on creating a detailed financial plan that accounts for all potential expenses and revenue streams.

7. Human Resources

In the early stages of starting a business, some entrepreneurs struggle with delegating responsibilities as they transition into a leadership role, but it’s important to recognize that you can’t do everything on your own. Having a strong team behind you ensures that you can focus on the big picture without having to worry so much about the day-to-day operations.

Be sure to invest time into developing a recruitment and hiring strategy that identifies candidates who align with the company’s vision and culture. “To build a great team, you should really be articulating what kind of person will thrive in your environment,” says Dawson. “Someone may be an awesome person, but not the right fit for your team, and that’s okay.”

While starting a business can feel overwhelming at times, preparing for the challenges ahead can increase your chances of success and help you navigate the entrepreneurial gauntlet with confidence and resilience.

At Open Eye, we understand the unique challenges entrepreneurs face when starting a business. Oftentimes, startup consulting can help. If you’re looking for personalized guidance, one of our expert partners can help. Contact [email protected] for more information. Contact us here .

• Christian Dawson
• Strategy and Consulting

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It’s a huge leap of faith, this whole entrepreneur thing. The first step is abandoning another career. It can feel like saying goodbye to an old friend. Or maybe it was more like getting out of an abusive relationship. But the rollercoaster ride doesn’t stop there. Here are the top challenges entrepreneurs face when starting a business and how to overcome them. 

#1 Choosing What to Sell

Hey, if we knew exactly what everyone wanted and would pay for, we’d be rolling in dough, amirite? This is a big challenge entrepreneurs face when starting a business. What’s gonna sell, and will you earn a living doing selling it.  

Let’s skip all the guessing games and go straight to the source — a freelance researcher. 

Identify the field or industry your business is in, and then get a freelance researcher to mine for gold. With their expertise, you can find out which niches to explore, their profit margins, and get a complete SWOT analysis: 

• Opportunities

#2 Figuring Out a Marketing Strategy and Finding Customers

There are so many ways to get your offerings in front of the right people. You’ve got inbound and outbound marketing, digital marketing, traditional print marketing, and so much more. But that’s not all. How do you fit them all together into a cohesive, effective strategy?

Here’s the key to creating an airtight marketing strategy and finding customers: 

Who is your audience? Where are they hanging out? How does your value proposition align with what they need and are looking for?

#3 Waiting and Self-doubt

Results are typically tardy to the party, and they take some time to show up. This doesn’t mean your business is doomed to fail. When I first started my business, it took almost nine months to get the cash flowing. And it began with a trickle.  

When you’ve worked so hard at your business, and the take-off is slow going, the self-doubt starts creeping in. 

Did I quit my 9-5 too soon? Will I never make enough to replace my income? Will my kids hate me and my cat run away?

All right, first of all, the answers are no, no , and no . The self-doubt you’re feeling is something that practically all of us entrepreneurs face when we’re in the early stages of a business venture. It’s natural to feel like this, but it’s not helpful. 

When self-doubt strikes, let’s take a trip down memory lane. 

What first drove you to become an entrepreneur? What are you passionate about? Think about all the times you hated working for a boss. Remember the excitement you felt the first time you ever sold something? 

Concentrate on the good stuff, the stuff that drove you to start a business. 

I know it’s hard to be patient and positive when the bills are coming in, and your kids need new shoes. But trust in the process. If you keep working hard and working smart, you’ll start replacing your old income. Which brings me to my next point. 

#4 Cash Flow, Inconsistent Income, and Late Payments

Getting the cash flowing is one thing. Managing that cash flow is a whole other ball game. If you’re struggling to pay your business bills, you’re not alone. 

Many new entrepreneurs hit this roadblock and have a tough time paying the bills, let alone paying themselves while they wait for the invoices to clear. So, what to do?

You’ve got to keep your business expenses separate from your personal expenses. Not only will this protect your cash flow, but it will also make tax prep and filing a lot easier. 

Budgeting and planning are crucial, but I’ll be honest with you. The budget alone won’t cut it. 

Get tough. Require a downpayment or a retainer for your services. If you bill for weekly recurring work, make the invoice due upon receipt. Doesn’t get paid? Then no more work. But really, just ask for down payments. Saves a lot of trouble. 

What if you’re consistently dealing with late payments ? Consider giving people a discount if they pay early. That way, they’ll have an incentive to do it. Late payments get charged a penalty. 

On the flip side, if you have a good relationship with your vendors, ask if they can invoice you every 45 or 60 days. This can help you stay on top of monthly bills and protect your cash flow. 

#5 Time Management When You Wear Many Hats

This is a significant problem for entrepreneurs who wear many hats. If you had more time, you could accomplish it all! It’s kind of like if you had more money, all your problems would go away. 

But here’s the thing about time. Like money, it doesn’t grow on trees. You’ve got to watch your spending and manage it. Getting a handle on your time management will help you strike the work-life balance you need. 

So, do this:

• Always ask yourself if what you’re doing is the best use of your precious time. 
• Create a goal list. Start big with the yearly goals. Break them down monthly, then weekly. Finally, break those down into daily goals. 
• Look at your daily goals. Do they absolutely positively have to be done by you? No? Great, let’s delegate. 

#6 Delegating and Building Your Team

Delegating will free up so much of your time and make things more efficient. A more efficient business will equal greater cash flow in the long run. 

So, what if you’ve delegated in the past, and stuff always got messed up? Well, there’s a couple of things you can do to overcome this entrepreneur challenge when starting a business. 

• You get what you pay for. If you keep going for the cheapest solution or contract work, you’ll get shoddy work, guaranteed. Take the blue pill. Start spending a little more on quality, and you won’t have to redo someone else’s work. 
• Be specific . Avoid assuming people know precisely what you want or know exactly how to do the things you need. It will take some time, but write down specific instructions. Instead of put the statistics in a spreadsheet and finish it Wednesday, instruct them to list the statistics alphabetically in an Excel spreadsheet and deliver by Wednesday 4 PM EST. 

Paying more for high-quality work and giving your team specific instructions will help them succeed. A consistently high-performing team is going to have better morale and more confidence. By being specific and investing in your team and business , you’re giving them the tools they need to win and deliver great results every time. 

#7 Balancing Perfection, Progress, and Keeping that Ego in Check

Are you a perfectionist? I’m raising my hand right now. When everything has to be just so it gets in the way of progress. Trust me, I know. As a bonafide perfectionist, I’ve had to learn this lesson myself. 

Here’s the thing, friend. Perfect is the enemy of good. You don’t need something to be perfect. In fact, nothing is ever perfect. Ever, okay? Things just need to be good enough and get the job done. Trying to make everything perfect will waste your time. 

We perfectionists struggle with letting go so others, who are just as capable, can shine and deliver. Delegate, let go of perfectionism and watch your business thrive and your team morale skyrocket. 

#8 Combating Loneliness

When I became an entrepreneur, this was a challenge that I had no idea I’d face. 

Most people are not entrepreneurs. They work a 9-5, and there’s nothing wrong with that. But it’s something that just isn’t for me, you know? I’m sure you can relate. When you’re the only entrepreneur in your peer group, it gets lonely . And quick. 

Most people don’t know what you’re going through. It’s hard to bounce ideas off of people who’ve never been in your shoes. Most can’t relate to your struggles with cash flow, delegation, coming up with a marketing plan, all that jazz. When you’re a visionary, you might struggle with feeling like an odd duck. 

Okay, so what to do? You’ve got to find your tribe. 

Join entrepreneur groups. Reach out to other business owners on social media. Prioritize your closest relationships and make more time for them. It’s in these types of relationships where we feel the most understood, helping combat loneliness. 

#9 Experiencing Business Growth

Business growth sounds like a good thing. And it sure is! But it also presents specific challenges. Grow, and you’ll eventually reach the point where you can’t take on any more work at your current capacity. 

Here’s what you need to do.

Create new processes with a focus on task delegation. You love wearing different hats, I get it. But you’ll need to hang some up if you want to keep your business profitable and productive. If you do everything, you’ll hit the ceiling — a self-imposed one. 

So, be your own best friend and not your worst enemy — breakthrough that ceiling through delegation and take yourself out of the production end. Go into management and on to pure unadulterated and blissful ownership. 

#10 Navigating Work-Life Balance

Struggling to balance the demands of business and personal life?

• •Establish firm boundaries between professional and personal time. 
• •Schedule regular breaks and allocate time for relaxation and family.

 It’s essential to prioritize self-care and maintain hobbies or activities that rejuvenate you. Balancing these aspects is crucial for long-term success and preventing burnout. Remember, a well-rounded life enhances your capacity to run your business effectively.

Overcoming Common Challenges as an Entrepreneur: Action Steps

Starting a business comes with many challenges. But know this — you’re not alone, and many have traveled this road before you. Me included. I’ve figured out how to overcome these obstacles, grow, and thrive, and I know these tips will help you do the same. 

You’re the builder, the designer, the chief architect of your business. You’re building this gorgeous castle and kingdom to rule over. So, how do you ensure that you’ve got a strong foundation from which to grow?

Marketing, growing, becoming profitable, and building a business you love really boils down to this: 

Branding. Branding.Branding.

Get my Branding with Influence Guide . It’s a proven step-by-step process for creating cohesive brand messaging and visuals across multiple channels and platforms. 

Branding is the key, the secret sauce, if you will, to building an audience and marketing your products effectively. Let’s get you on the road to success. 

You’re the architect of your business and a branding guide is your foundation . 

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Navigating the Early Challenges of Entrepreneurship & How to Overcome Them

Published: July 15, 2024

I know this isn’t a mind-blowing or revolutionary thing to say, but being an entrepreneur isn’t easy. It takes a lot of guts, persistence, business acumen, and strategic thinking — and even having those qualities in spades isn’t always enough for a business owner to stay afloat. 

The challenges of entrepreneurship can exist well beyond any entrepreneur’s control — but those troubling roadblocks aren’t insurmountable. Here, I’ve spoken to entrepreneurs to get their takes on the most common challenges of entrepreneurship and their advice for overcoming them. 

Let's jump in.

Challenges Entrepreneurs Will Face This Year

1. work-life balance.

In the State of Entrepreneurship survey I ran in early June 2024, I asked respondents about their biggest pain points as entrepreneurs and business owners. The top response was work-life balance. 

The definition of a good work-life balance is different for everyone, but to me, the main idea is that one doesn’t have to sacrifice work or personal life to accommodate the other. 

Evan McCarthy , President and CEO of SportingSmiles , told me he faced this challenge when he started entrepreneurship. He said, “I launched my company 15 years ago, and as a business owner, there's always a mountain of tasks to tackle. The main challenge I faced was finding a balance between my work and personal life.” 

When he started his business, he was single, which he says made things easier, but he worked nonstop for two months straight without taking days off. He said, “I was completely dedicated to making my business succeed, without any backup plan if things didn't work out.” 

He adds, “Looking back, I realize I should have paid more attention to my personal life. Taking better care of myself would have reduced stress and probably helped me focus more on growing the business.”

How to Overcome This Challenge

One of the biggest benefits of entrepreneurship is being your own boss. It gives you the freedom to set your hours and develop the work-life balance that works best for you, but things like hustle culture can make it seem like it’s important to always be on and ready to work. 

My recommendations for maintaining a work-life balance include: 

• Setting boundaries : This can be as simple as setting work hours that you stick to whenever possible. Busier days happen, but you have a primary schedule. 
• Take clear breaks: I’m a strong proponent of taking breaks. It helps me clear my head and come back with fresh eyes.
• Set realistic expectations: Overcommitting can make you feel like you have to keep working until everything on your list is complete, so aim to be honest about what you can accomplish every day. 
• Have fun when you’re not working: I’m sure this is a no-brainer, but it’s worth saying anyway. When you’re not working, do the activities that bring you joy, whether being with loved ones, setting aside time for a hobby, or even sitting around and doing nothing. 

2. Accessing capital and funding. 

Accessing capital and funding is the #2 challenge our survey respondents face. 

This makes sense to me  — starting a business without funding is impossible. In fact, the average small business owner spends around $40,000 in their first year of business. 

A majority of entrepreneurs told us that most of their funding comes from personal funds, which can be an added stress factor as personal funds are for personal needs. 

The best way to avoid cash flow issues is to create a budget . You’ll know how much you need and are supposed to have and can seek additional funding sources if expenses outweigh revenue. Some tried and true ways to get funding for your business include: 

• Crowdfunding : Websites like GoFundMe and Kickstarter give you financial backing from online campaigns. 
• Small Business Loans: Local small business organizations and development centers often offer loans for early-stage businesses to apply for. 
• Bank Loans: Bank loans are a common funding source. I recommend reviewing interest rates and repayment terms to make sure they align with your ability to repay. 
• Angel Investors : Angel investors are accredited professionals who offer funding. You typically have to pitch to these investors or apply for their funding offers. 
• Friends and Family: Some people have friends, family, and loved ones willing to pitch in and support. If this is the case for you, it’s a worthwhile source to take advantage of. 

3. Finding Customers

72% of respondents to a study by the Kauffman Group said they struggled to find customers.  

Finding customers is one of the (if not the ) most fundamental tasks to address if they want their business to take off, especially since you can’t always bank on customers simply finding their way to you.

As an entrepreneur, it’s on you to get the word out about your brand — self-promotion is how you get the ball rolling. 

The first step to finding customers is knowing who your ideal customer is. Doing buyer persona research will help you learn about your target audience, their interests, pain points, and the best way to attract them. You’ll also be able to determine your brand positioning, which helps you create targeted marketing efforts to get in front of customers. 

I assume you’re proud of your business, so I recommend boasting about it every opportunity. If you serve a local customer base, ask if you can leave a business card or flier at local establishments. 

Go to industry events and trade expos and really put your business on display. Keep an active presence on social media, and ask your friends, family, and anyone in your support network to get the word out. Create a referral program for your existing customers. 

It comes down to visibility, so, one way or another, make your presence known. Customers won’t find you if you stay isolated.

4. Finding Mentorship

Entrepreneurial endeavors can be challenging to navigate alone — particularly for younger or first-time founders. 

Access to advice, insight, and direction from more seasoned business owners can help keep things on an even keel, but pinning down that direction is easier said than done. In fact, 60% of aspiring entrepreneurs said finding a mentor who can provide guidance is challenging. 

Networking events, industry-specific expos, and social media platforms are all opportunities to connect with like-minded and experienced businesspeople. You can also: 

• Talk to business people you admire . If you’ve developed a relationship, you can take it a step further and propose a mentoring situation. 
• Make it known that you’re looking for a mentor. People you might not have known yet might approach you first and present an opportunity. 
• Apply to mentorship programs designed to help you find qualified mentors in your industry. If you’re based in the U.S., contacting small business development centers is a great way to get started. 
• Connecting with your community, whether your local community or on platforms like LinkedIn, can help you find people with your shared interests. Hearing people's stories can be as helpful as connecting with someone with seniority. 

The key to finding a mentor is being willing to put yourself out there. There’s no guarantee that someone can offer guidance, but plenty of people are willing and excited to share their insights. 

My Recommended Reading 

• How Startup Mentorship Can Give Your Business a Boost
• The Complete Guide to Business Networking [+8 Key Tips You Should Leverage]

5. Staying motivated. 

Justin Silverman , Founder and CEO of Merchynt , told me, “The biggest challenge for me was staying motivated during the early days when revenue was nonexistent and growth was slow.” 

Motivation can be a struggle for everyone, no matter what stage of business. It can become even harder to maintain if you’re experiencing burnout or a lack of work-life balance. 

Motivation is, thankfully, something you can build back. 

Here’s what Silverman did to regain motivation: “I took inspiration from The Messy Middle and set a mix of small and large achievement goals. I put them on a board in front of my desk and checked them off as I went. This approach helped me see that little wins add up to big achievements over time. It kept me going when I had previously given up on other ventures.” 

He said this approach taught him the importance of celebrating small victories to maintain momentum and motivation. 

Breaking down your goals can make responsibilities feel more manageable, help you feel less overwhelmed, and help you prioritize the most important tasks. It’s a win every time you meet one of your smaller goals, and hopefully, it will leave you feeling accomplished, excited, and motivated. 

6. Being adaptable.

Scott Williamson , VP of Sales and Engineering at R. Williamson & Associates , said, “My biggest challenge as an entrepreneur was learning how to pivot and adapt quickly.” 

Markets are always changing, so it’s an understandable challenge. Unexpected hurdles (cough cough, pandemic) can arise and, even with contingency planning , pivoting can still be a challenge. 

Williamson adds, “When I first started my company, I had a vision for what I thought the business would become. But as we launched and started gaining real customers, the reality of the market and the competitive landscape became clear. Things weren't evolving exactly as I had imagined.” 

He said he had to learn to listen to customers and make quick adjustments to better align with their needs. Even though it was difficult to accept that his original vision wasn’t perfectly accurate, customer insight helped build a product that gained real traction. 

Williamson’s tip is to recognize that entrepreneurship is not about rigidly sticking to a plan : “It’s [entrepreneurship] about having a vision, testing it in the real world, listening to feedback, and being willing and able to adapt. The market is always changing, so entrepreneurs have to change with it.”

I recommend also staying up to date with industry news and trends and monitoring consumer trends. You’ll get a sense of the state of your industry and whether any changes are coming down the line. 

7. Inclusion and Opportunity-Related Barriers

I run Breaking the Blueprint , a HubSpot blog column dedicated to the unique challenges of underrepresented entrepreneurs. Many of the difficulties said groups face are because of historical practices that excluded them from equal opportunities.

As a result, minority-owned businesses still sometimes struggle to achieve the same level of success as their white counterparts. Here are some stats that outline the unique entrepreneurial landscape for minority entrepreneurs: 

• Almost half of women-owned small businesses responding to a QuickBooks survey said that having more funding or financial help would have the greatest impact on their business. 
• Nearly 8 in 10 Black small business owners say they’ve experienced racism from a customer.  
• LGBTQ+ founders created 36% more jobs, 114% more patents, and 44% more exists, but raised 16% less funding than the average founder. 
• Latino businesses received less than 1% of the $487 billion invested in the top 500 largest venture capital and private equity deals in 2020. 

These discrepancies are unfortunate because minority entrepreneurs contribute nearly $2 trillion annually to the U.S. economy. 

Many of the challenges underrepresented entrepreneurs face require action on behalf of institutions that have historically been unsupportive. 

Thankfully, though, individuals can take action to better their circumstances. For example, you can: 

• Seek out resources specifically for underrepresented entrepreneurs. (Another shameless plug for Breaking the Blueprint , where I publish this kind of content)
• Network and build relationships with people who have similar experiences. You can share advice, discuss challenges, and uplift each other through your entrepreneurial journeys. 
• Seek out business mentors who are willing to share their experience and expertise. 
• Apply for grants, loans, and funding opportunities for minority entrepreneurs , like minority business loans. 

8. Asking for help. 

Being comfortable asking for help is a learned skill. People like to be autonomous and can view asking for help as a sign of weakness. 

I think asking for help means the opposite — it shows a willingness to learn, and it can leave us better off in the long run because we’re getting support, and the opinions of others can push us to consider new ideas. 

Jody Swain , Founder of Hire & Fire Your Kids , struggled with asking for help when she started her journey. She told me, “By far, my biggest challenge as a first-time entrepreneur was trying to do it all by myself and not asking for help.” 

Swain adds, “I didn't want to bother people, take up their time, be judged, or be rejected, so instead, I did what I thought entrepreneurs were supposed to do. I hustled. Working too many hours in a day, for weeks that turned into months, triggered my family to host a full-blown intervention with me.” 

She says the intervention caused her to slow down and start seeking help. She discovered various resources available for entrepreneurs, such as grants, small business hubs, and accelerator programs.

“What took me way too long to learn was that there were actual people out there who wanted to help. The answer will always be no if you don't ask. Once I realized that all I had to do was be brave and just ask, the doors of support opened, and I haven't looked back,” Swain says. 

The best way to overcome feeling challenged by asking for help is to reframe it as a strength rather than a weakness. It shows that you’re self-aware, willing to receive feedback, and eager to grow.

9. Self-Doubt and Fear

Self-doubt and fear are common among entrepreneurs. You might feel like you’re risking your reputation, that you might fail , or that you’re not cut out for the job — 50% of entrepreneurs say these feelings are a major challenge. 

Impostor syndrome is a common manifestation of self-doubt, and research shows that 82% of people have experienced it. 

The business world is always in flux, so there’s no easy answer for remedying this issue, but there are ways to mitigate it. 

This seems like something someone would write on a mocking SpongeBob meme , but I stand by my tip: patience and persistence are great ways to combat self-doubt. 

You don’t know how things will turn out if you don’t give things a chance to happen. For example, if your self-doubt says you won’t be able to turn a profit, how can you confirm that to be true if you haven’t given yourself the time to bring in revenue?

Be kind to yourself when feelings of self-doubt arise because how you respond can impact how long it lasts. Positive self-talk and affirmations can help you avoid stress and anxiety. 

Even if you have to fake it ‘till you make it, you’re building a positive habit that will benefit you in the long run. 

10. Building and empowering a team. 

If your entrepreneurship journey started as a one-person show, building and empowering a team is an entirely new playing field. Instead of doing everything yourself, you’ll have to become comfortable delegating and trusting others to do their assigned tasks. 

Gauri Manglik , CEO and Co-founder of Instrumentl , told me that she struggled with this. She says, “As an entrepreneur, the biggest challenge I've faced has been finding the right balance between leading my team while also allowing them the autonomy to thrive. Early on, I tended to micromanage every detail out of fear that things wouldn't get done properly.” 

She adds, “I quickly learned that this level of control stifled creativity and hindered performance. The real key was hiring the right people, clearly communicating the vision and expectations, then getting out of their way. I had to recognize that innovation comes from empowered teams, not overbearing founders.”

Manglik dealt with this challenge by shifting her role. She learned to provide support through coaching and mentoring while trusting her staff to complete their tasks successfully. Embracing this approach brought greater engagement, output, employee job satisfaction, and better business results. 

She says, “The experience taught me that leadership isn't about control but enabling others to do their best work.”

Other effective strategies include:

• Communicating expectations and giving clear instructions
• Encourage your team to take ownership of their tasks and their achievements
• Highlight team wins to boost morale and strengthen team bonds

11. Keeping Pace With Changing Laws

Note: This does not constitute legal advice for your company to use or as a recommendation of any particular legal understanding. 

Business owners can struggle with keeping track of legal requirements. According to a list from Funding Circle, in 2020 alone, many companies had to account for overtime rule changes, shifts in health insurance requirements, minimum wage increases, and the introduction of internet privacy regulations like the California Consumer Privacy Act (CCPA) — among several other new and amended laws.

Luckily, most newly passed laws feature some runway before compliance becomes mandatory — giving you the flexibility to account and brace for new requirements.

Still, you need to remain mindful of any laws that might immediately affect your company, whether they are local, statewide, federal, or industry-specific.

The best ways to stay on top of legal, regulatory, and compliance matters are to monitor industry news, talk to peers, leverage reputable resources, or even have an attorney you can contact to guide you through this aspect of your business. 

If you need specific certifications, routinely check for changes or important renewal times. Some of the legal requirements you want to be aware of are: 

• Applying for necessary licenses (seller's permits, business licenses, etc.)
• Understanding small business tax requirements (the IRS website has the most comprehensive info)
• Monitoring global compliance and privacy requirements (like GDPR)

My Recommended Further Reading

• How to Register a Business — Everything You Need to Get Started
• 5 Things Every Marketer Should Know About Compliance
• Legal Support for Startups: From a Lawyer Who's Been There (Webinar)

Over to You

The roadblocks that entrepreneurs face can be imposing. 

I mentioned it earlier, but the best policy for anyone facing these challenges is to remain patient and persistent. Overcoming these issues can take time, but doing everything you can to cross the hurdles gives you the best shot.

Don't forget to share this post!

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Professional Development

Top 8 most common entrepreneur challenges, this article covers the common challenges entrepreneurs face when starting their businesses and how to overcome them — from finding the right idea to managing finance..

Being an entrepreneur can be incredibly rewarding. At the same time, there are challenges of starting a business that every entrepreneur faces. No matter how much we plan, unexpected things happen. One of the many entrepreneur challenges is to expect the unexpected and to find a solution to move forward. Keep reading to learn about common problems entrepreneurs face and how to overcome them. 

Getting Into Entrepreneurship

If you haven’t already given yourself a pat on the back for starting your own business, go ahead and do that now. This is a big decision, and one you should be proud of. Entrepreneurship comes with flexibility, creative control, and a sense of freedom. It can be a rewarding career path that allows you to embark on work that you truly love and enjoy doing. 

On the flip side, part of being a business owner involves understanding some of the issues in entrepreneurship. You’ll undoubtedly encounter various obstacles throughout your journey. Every business owner deals with setbacks and hurdles at some point in their career. Without a boss over you to report to, the weight of responsibilities falls on your shoulders. But don’t worry, we know you can handle it. So, what are challenges that you can expect? We’ve narrowed down some of the most common issues and solutions to prepare you for your entrepreneurial journey. 

Starting your own business is an exciting endeavor. To ensure a successful and smooth experience , keep these challenges in mind so you know how to overcome them. 

1. Finding the right idea

Before your business can take off, you need to have a viable, profitable business plan. This starts with your idea. Does your business offer something of value? Is there a target market for your business? Many beginners struggle with creating a business that can be sustained years down the line. Focus on the product or service you’ll offer and how it can solve a problem for your target audience. 

2. Lack of funding

As a business owner, you take on the financial responsibility needed to successfully run your business. Small business owners often begin as solopreneurs, who handle all the work themselves and don’t have a need to hire employees or outsource their work—at least not yet. If your goals involve hiring a team or expanding offices and locations, you’ll need some way to secure funding in order to grow. 

3. Hiring and managing employees

Assuming you have the financial resources to hire and manage a team, the next hurdle comes with finding the right people to work with you. In the age of gig work, it may be easy to find low-cost employees or contractors, but will their work be the kind of quality you’re looking for? One of the problems entrepreneurs face is hiring top-talent employees who still fit within their budget. 

4. Time management

Entrepreneurs often wear multiple hats, especially during the beginning stages of their business. From the moment the decision is made to start your business, to your launch, to actually running your business, you’re constantly involved in the process. It can be more time-consuming than expected, and many entrepreneurs run the risk of burnout. Finding a healthy balance between their work and personal lives can be a challenge. 

5. Marketing and sales

As with every other aspect of your business, you’re now in charge of promotion and marketing. You need to get the word out about your services or products so customers know what you offer and how to find you. A lot of time and strategy go into developing a successful marketing plan. For people who aren’t experienced in marketing or sales, this aspect of being an entrepreneur can feel daunting and intimidating. 

6. Competition

Due to the sheer amount of businesses that exist today, many industries are oversaturated with people trying to establish themselves as experts in their field. Whatever type of business you decide on, it’s important to realize the competition you’ll be faced with. As the industry grows and inevitably changes, so will your competition and your strategy to stand out among the crowd. 

7. Adapting to change

Part of the growth challenges as a business owner is the ability to adapt to changes within your industry or field. These changes can come in the form of a shift in market conditions, technological advancements, and customer needs. Entrepreneurs need to be mindful of industry trends and anticipate the change in order to remain competitive. 

8. Managing finance

Unless you have a background in finance, many small business owners aren’t familiar with managing finances and cash flow. It’s a challenging aspect of being an entrepreneur, as keeping track of your budget and profitability isn’t an easy task. Without the proper knowledge or guidance on how to manage your finances, you run the risk of doing harm to your business’s finances. 

How To Overcome Difficulties: Main Tips

Now that you’re familiar with some of the most common entrepreneur challenges business owners face, here are a few tips to help you navigate through these obstacles. 

Research and planning

The best way to prepare yourself is to do your research before launching your business. As excited as you may be to start your business, creating a solid business plan will help guide you throughout your journey. You want to go into this endeavor feeling confident and secure in your marketing strategy. 

Identify your priorities, potential pain points, and brainstorm ways to overcome these challenges. It’s a good idea to come up with a Plan B, maybe even a Plan C, just in case you need it. You never know what kind of situations you may encounter with your business. This is where problem-solving can come in handy and help get you through these hurdles. 

Seek funding and support

Many entrepreneurs assume they have to foot the bill for their business completely on their own. For many, this might be your only option as you’re starting out. But know that there are other ways to obtain funding and support to help your business grow. 

Consider applying for loans or grants to help get your business off the ground. Another option is to connect with your community and host a crowdfunding event or ask for donations. You’ll be surprised how many people are in your corner who want to support you. You can also look into participating in an incubator program, where you often receive funding, mentorship, and networking support during the early stages of your business. 

Build a strong team

The best business owners and CEOs are pivotal leaders in their industry . They recognize the value of hiring top-talent employees and invest time and money into their training and development. Cultivating a team that shares your vision for your business is an integral part of being a successful business owner. Take the time to recruit the best possible candidates for your team. These are the people who will represent your company and support you in your success. 

Prioritize and delegate

Part of being a good leader in the workplace is the ability to prioritize work and know when to share the responsibility of getting it done. Even though you may feel comfortable doing all the work yourself, your team is there to support you. 

As your business continues to grow, you’ll find more tasks and responsibilities to share. In order to maximize your time and work efficiently, allow yourself to delegate work to other people on your team. This can also help you maintain a healthy balance between your work and personal life. 

Develop and strong brand and marketing strategy

By now we know that brand voice and a strong marketing strategy are essential elements of building a business. No matter your service or product, consumers want to connect with the brand and the person behind the brand. Create your own unique brand identity that showcases your place in the market that will help you stand out. 

Embrace change and innovation

Every industry goes through waves of change, so it’s important to stay up to date with the latest trends and developments in technology. As business owners, it’s our responsibility to evolve with the times. It might be scary, and it may mean investing more time and effort into these changes, but they’ll be worth it so long as you remain relevant to your audience. 

Find the Right Platform For You!

Being a business owner can be truly rewarding and lead to many wonderful opportunities in your career. Will it be tough? Yes. Will it require time, some research, and a bit of planning? You bet. Do you have to do it alone? Absolutely not. Practice is your one-stop-shop CRM (customer relationship management) software to run your small business. You can manage your clients, accept payments, and you can even message your clients easily and effortlessly through our platform.

For those entrepreneurs who need a bit more customization, our Pro Plan is for you. Add a custom domain, include your own branding, plus add digital signatures into your workflow. Don’t forget our integration ability to connect Practice to all your other tools for seamless automation. Run your business with Practice for the stress-free client management system you’ve been looking for. 

Give your clients a simple and professional experience

Simple client management designed for teams, free form templates from practice.

A Coaching Relationship Questionnaire Template to help professionals create meaningful relationships with their clients. Get started today and set your clients up for success! #coaching

Ready to take your life to the next level? Our Life Coach Clarity Call Form Template will help you and your clients get clarity on your goals and objectives.

Coaching Discovery Call Questionnaire Template: Quickly assess your clients' needs and objectives with this comprehensive guide. Perfect for professionals who want to help their clients succeed.

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11.4 The Business Plan

Learning objectives.

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

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/entrepreneurship/pages/1-introduction

• Authors: Michael Laverty, Chris Littel
• Publisher/website: OpenStax
• Book title: Entrepreneurship
• Publication date: Jan 16, 2020
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Writing a Business Plan? 13 Challenges to Overcome

Starting a business? Entrepreneurs know that dreaming up a business idea is the easy part — it’s making your dreams come to fruition that’s the real challenge. And one of the first steps to taking on that challenge is creating a business plan, a task that can be pretty daunting no matter how great your idea is.

Your business plan is essentially your map to success — it’s an outline of the goals, research and projections you have for your new company so that you can stay on the right track, and is an especially important document to have if you’re seeking funding.

Business News Daily asked business owners, strategists and experts what the most difficult part of writing a business plan is. Here are 13 challenges you’ll face writing your business plan.

Actually starting it

“The hardest part about writing a business plan is getting it started. Lock yourself in a room, turn off your phone and focus.”

– John Gavigan, executive director, 43North

Filling out your financials

“The most difficult part of writing a business plan is the financial section. It is difficult to project figures on a brand-new business with, possibly, a brand-new concept. There is not roadmap, no one to follow. The best you can do is find a similar company and try to gauge what they are making.”

– Rosemary O’Brien, owner, Pocket Parks Publishing

Knowing your demographics

“The hardest but most important piece is getting your target demographics dialed in properly. You need to know who you’ll be selling to and how big the market is to estimate with some accuracy how many people you can reach and sell your product or service to.”

– David Batchelor, founder, DialMyCalls.com

Planning for tech changes

“Predicting the unforeseen technology variables that the future holds [is a challenge]. When I started my business nearly 10 years ago, there was no marketing on Facebook, and Twitter and Instagram did not yet exist. Today, these social media platforms play a huge role in my business’ marketing strategy and directly affect sales.”

– Monif Clarke, CEO and founder, Monif C.

Being concise

“[One of the top challenges is] keeping it short and sweet. The more concise and focused a plan is, the more likely business owners are to achieve the goals they have set out for themselves and their business.”

– Rick Faulk, chairman and CEO, Intronis

Making it interesting

“The hardest thing about writing a business plan is being able to tell your story in such a way that people buy into your idea. If you tell a lousy story, people won’t want to invest.”

– MJ Pedone, president and founder, Indra Public Relations

Establishing workable goals

“Establishing clear, concise and understandable goals — these goals must also be realistic. When people can’t see the vision of the plan, they won’t take action to pursue the plan. In addition, by having set goals that align with your plan, you have measureable targets to track your progress.” – Mike Rodriguez, coach and business consultant

Staying grounded

“[You need] to be honest with yourself. Entrepreneurs are by nature dreamers and optimists and business plans require them to challenge their assumptions about market opportunity, the competition, the value of their product and growth projections. That is where they get caught up in defining an aspirational, but somewhat realistic, business plan.” – Vikram Aggarwal, CEO and founder,EnergySage

Being realistic about the outcome

“The biggest issue I see with most business plans is lack of perspective. Excited by their idea, business plan writers start from the point of view that it can’t fail and never fully identify all of the risks associated with their plan.”

– Charlie Johnson, president, Magnolia Financial

Finding the right amount of flexibility

“The hardest thing about writing a business plan is making it flexible enough to allow for change without making it so flexible that it isn’t really a plan. There is a happy medium between these worlds and this is where the most success can be found.”

– Idan Shpizear, owner and founder, 911 Restoration

Proving that your idea is worth it

“Proving monetization is undoubtedly the biggest challenge when it comes to developing business plans. Often, startups will have innovative ideas and a lot of ambition, but not necessarily a budget or the funding to bring their ideas to life. When companies come to us, we always ask [if there is] a need, because need drives business. If there is no need, you won’t be able to succeed with your business plan.”

– Kim Connors, director of strategy, Blue Fountain Media

Being unable to predict everything accurately

“No matter how detailed you make [your business plan], you will always be wrong! Predicting revenues is like looking into a crystal ball. Costs are easier to predict as they are under the company’s control and depend on overall strategy and focus, but even here, some costs may be contingent.”

– Neha Mittal, head of strategy and business development, Arrow Devices

Making your plan useful

“In my experience, the biggest challenges CEOs face is creating a business plan that can actually be successfully implemented. Many companies create plans, but too often, those plans sit on the shelf with actions not done, targets not met.”

– Renee Fellman, management expert, Renee Fellman & Associates

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Business Plan Roadmap: Building Your Path to Business Success

Published: 31 December, 2023

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Table of Contents

In today’s fast-paced entrepreneurial landscape, a meticulously crafted business plan functions as the guiding star for your venture’s journey toward success. Whether you’re an experienced entrepreneur or a budding startup creator, possessing a comprehensive business plan is indispensable, serving as the key to securing funding, making well-informed decisions, and effectively navigating the ever-evolving business environment.

Within the confines of this article, we will embark on a comprehensive exploration of the art of crafting an engaging and impactful business plan . We shall dissect critical components, including in-depth market research, meticulous financial projections, savvy marketing strategies, and effective operational blueprints. Additionally, we will unveil a plethora of tips and best practices designed to elevate your business plan above the competition, rendering it a value proposition for those seeking to invest in or collaborate with your enterprise.

What is a Business Plan

A business plan definition is a written document that outlines the goals, strategies, and detailed operational and financial plans of a business. It serves as a roadmap for the business, providing a clear direction for its growth and development. A typical business plan includes information about the company’s mission and vision, its products or services, market analysis, competition, target audience, marketing and sales strategies, organizational structure, financial projections, and funding requirements. Business plans are commonly used to secure funding from investors or lenders, guide the company’s operations, and communicate its vision and strategy to stakeholders.

A conventional business plan typically divides into two primary segments:

• The Explanatory Segment: This portion encompasses written content that serves the business purpose of providing a detailed description of the business idea and/or the company. It covers elements such as the executive summary, company overview, market analysis, product or service particulars, marketing and sales strategies, organizational structure, operational blueprints, and funding needs.
• The Financial Segment: Within this section, you’ll discover financial data and projections, encompassing income statements, balance sheets, cash flow forecasts, and detailed information regarding financing prerequisites and potential sources. This segment offers a quantitative view of the business’s financial situation and future expectations.

Components of a Business Plan: What is Included in a Business Plan

Crafting a thorough and compelling business plan is a fundamental step for entrepreneurs and business leaders seeking to chart a successful course for their ventures. A well-structured business plan not only serves as a roadmap for your business’s growth but also communicates your vision, strategy, and potential to investors, partners, and stakeholders. The key components of a business plan make up a robust business plan, offering valuable insights and practical tips to help you create a document that inspires confidence and aligns your team with a shared vision. Each key element plays a critical role in constructing a business plan that not only secures financial support but also guides your organization toward sustainable success. Let’s delve deeper into these components, adding depth and clarity to your business plan ‘s narrative.

• Executive Summary: This should succinctly encapsulate the essence of your business plan . It should briefly touch on the market opportunity, your unique value proposition, revenue projections, funding requirements, and the overarching goals of the business.
• Company Description: Elaborate on your company’s history, including significant milestones and achievements. Clearly define your mission, vision, and values, providing insight into what drives the company’s culture and decisions.
• Market Analysis: Delve into the market’s nuances by discussing not only its size but also its growth rate, trends, and dynamics. Highlight specific target market segments, customer personas, and pain points that your business aims to address. Include a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to showcase your understanding of the competitive landscape.
• Products or Services: Offer a detailed explanation of your offerings, emphasizing their key features and benefits. Describe how these offerings fulfill specific customer needs or solve problems, and explain any proprietary technology or intellectual property.
• Marketing and Sales Strategy: Provide a comprehensive overview of your marketing and sales plans. Discuss your pricing strategy in depth, outlining how it aligns with market dynamics. Explain your distribution channels and marketing tactics, including digital and traditional methods.
• Organizational Structure: Present bios of key team members, underscoring their relevant experience, expertise, and roles within the organization. Include an organizational chart to illustrate reporting relationships and the structure’s scalability.
• Operational Plan: Go into detail about your daily operations, covering everything from production processes and supply chain management to facility requirements and technology utilization. Discuss quality control measures and scalability strategies.
• Financial Projections: Provide a thorough breakdown of financial forecasts, including monthly or quarterly projections for at least three to five years. Explain the assumptions behind these numbers, including factors such as market growth rates and pricing strategies. Highlight critical financial metrics like burn rate, customer acquisition costs, and return on investment.
• Funding Requirements: Specify the exact amount of capital you’re seeking, the purpose of the funds, and how the investment will be utilized to achieve specific milestones. Outline potential sources of funding, such as equity investment, loans, or grants. Clarify the expected terms and conditions.
• Appendix: In the appendix, include supplementary materials that reinforce your business plan’s credibility and depth. This can encompass market research reports, letters of intent, prototypes, patents, legal contracts, and any other relevant documentation that adds value to your case.

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You can now access the complete Business Model Canvas Package, including a full presentation, related models and instructions for use.

The UNITE Business Model Canvas

Creating a business plan essential steps.

Creating a business plan is a crucial step in launching or growing a business. Here’s a step-by-step guide to help you create an effective business plan :

1- Draft an Executive Summary:

• Write a concise overview of your business, including the mission, vision, and goals.
• Summarize the business concept, target market, and unique value proposition.
• Keep it brief but compelling to grab the reader’s attention.

2- Compose a Business Description:

• Provide detailed information about your business, industry, and the problem or need your product/service addresses.
• Explain your mission, vision, and core values.
• Describe the legal structure of your business (e.g., sole proprietorship, LLC, corporation).

3- Conduct a Market Analysis:

• Conduct thorough market research to understand your industry, target market, and competitors.
• Define your target audience and demonstrate a clear understanding of market trends.
• Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).

4- Outline Organization and Management:

• Outline the organizational structure of your business.
• Introduce key team members and their roles, highlighting their relevant experience.
• Provide an overview of your advisory board or external support.

5- Detail the Product or Service Line:

• Describe your products or services in detail.
• Highlight the features, benefits, and unique selling points.
• Explain how your offerings meet the needs of your target market.

6- Develop a Marketing and Sales Strategy:

• Develop a comprehensive marketing strategy to reach your target audience.
• Outline your sales process, distribution channels , and pricing strategy.
• Include a sales forecast and customer acquisition plan.

7- Specify Funding Request (if applicable):

• Specify the amount of funding you are seeking (if any) and how you plan to use it.
• Justify the funding request with clear financial projections and a solid business case.

8- Prepare Financial Projections:

• Prepare detailed financial statements, including income statements, balance sheets, and cash flow statements.
• Provide assumptions and methodologies used for financial forecasts.
• Demonstrate your business’s profitability and financial viability.

9- Include an Appendix:

• Include supplementary materials such as resumes, permits, contracts, market research, or any other relevant documents.
• Keep this section optional but use it to provide additional context.

10- Review and Revise:

• Review your business plan thoroughly for clarity, consistency, and completeness.
• Seek feedback from mentors, advisors, or potential investors.
• Revise the plan based on feedback and ensure it aligns with your business goals.

Remember, a business plan is a dynamic document that should be revisited and updated regularly to reflect changes in your business environment. It serves as a roadmap for your business and a valuable tool for communicating your vision to others.

Types of Business Plans

Startup business plan:.

A comprehensive document crafted by entrepreneurs to outline the vision, mission, target market, competition analysis, financial projections, and strategies for launching and operating a new business.

Feasibility Business Plan:

A plan designed to assess the viability of a business idea or project by analyzing market demand, potential challenges, financial feasibility, and overall sustainability before committing resources.

One-Page Business Plan:

A condensed version of a traditional business plan, focusing on key elements such as the business concept, target market, value proposition, marketing strategy, and financial projections—all presented on a single page.

What-If Business Plan:

A flexible and dynamic plan that explores various scenarios and outcomes based on changing factors or assumptions. It helps businesses anticipate challenges and adjust strategies accordingly.

Growth Business Plan:

Tailored for businesses aiming to expand, this plan outlines strategies for scaling operations, entering new markets, launching products or services, and includes financial projections to support growth initiatives.

Operations Business Plan:

Geared towards day-to-day activities, this plan details operational procedures, resource allocation, supply chain management, and other aspects essential for the smooth functioning of the business.

Strategic Business Plan:

A long-term plan outlining the organization’s mission, vision, core values, and strategic initiatives. It guides decision-making, sets priorities, and aligns the company toward achieving overarching objectives.

The purpose of a business plan

A business plan is not a static document with a limited shelf life; rather, it evolves alongside the company it represents. It serves as a dynamic tool that adapts to changing market conditions, emerging opportunities, and evolving strategic priorities. Here’s a closer look at its continuous relevance:

• Guiding the Business ( Business Concept/Business Idea and Strategy ) : A business plan serves as an internal guide that helps entrepreneurs and management teams set clear objectives, develop business strategies, and make informed decisions. It provides a framework for prioritizing tasks, allocating resources, and monitoring progress toward achieving business goals.
• Securing Financing: One of the primary reasons for creating a business plan is to secure financing from lenders, investors, or banks. A well-prepared plan presents a compelling case for why the business is a viable and profitable investment. It includes financial projections, market research, and a clear explanation of how the funds will be used to achieve growth.
• Attracting Investors: For startups and early-stage companies, attracting equity investors is often crucial for rapid growth. A comprehensive business plan not only showcases the business opportunity but also outlines how investors can potentially realize significant returns on their investment. It highlights the company’s unique value proposition and competitive advantage.
• Setting Goals and Objectives: Business plan s articulate both short-term and long-term objectives for the company. Specific, measurable, and time-bound goals are essential for motivating employees, aligning efforts, and tracking progress. Objectives can encompass revenue targets, market share goals, expansion plans, and more.
• Managing Operations: Business plans include detailed operational plans, covering aspects such as production processes, supply chain management, inventory control, quality assurance, and logistics. These operational details ensure that the business runs smoothly and efficiently.
• Market Analysis: Comprehensive market research within the business plan helps the company understand its target market, customer demographics, and competitive landscape. This knowledge enables the business to adapt to changing market conditions and identify opportunities for growth, product development, or market expansion.
• Communicating the Vision: A well-crafted business plan communicates the company’s mission, vision, and values to both internal and external stakeholders. This clarity fosters a shared sense of purpose among employees and resonates with customers and partners.
• Risk Management: Business plans identify potential risks and challenges that the company may encounter. By acknowledging these risks upfront, the plan can outline strategies for risk mitigation or contingency plans. This proactive approach helps the business better navigate unforeseen challenges.
• Measuring Progress: A business plan serves as a benchmark for assessing the company’s performance and growth. By comparing actual results to the plan’s projections, the business can identify areas where it is excelling and areas that require adjustment. Regularly measuring progress is crucial for making data-driven decisions.
• Exit Strategy: In some cases, especially for entrepreneurs and investors, a business plan includes an exit strategy. This strategy outlines how the business owners plan to realize their investment, whether through selling the company, going public, or transitioning leadership to others.
• Competitive Adaptation: In the face of a constantly changing competitive landscape, a well-maintained business plan allows a company to regularly assess its competitive position. It aids in identifying emerging competitors, market shifts, and areas where the business can gain a competitive edge.
• Performance Measurement: By providing a baseline for projected financials and key performance indicators (KPIs), a business plan becomes a tool for measuring actual performance against expectations. This ongoing evaluation enables the organization to identify strengths, weaknesses, and areas for improvement.
• Resource Allocation: As a company grows, it often requires additional resources such as capital, personnel, or technology. The business plan assists in rationalizing and justifying resource allocation decisions to support expansion or address operational challenges.
• Innovation and Adaptation: In today’s rapidly changing business environment, adaptation and innovation are essential. A business plan encourages a culture of adaptability by fostering discussions on new opportunities and strategies for staying ahead of industry trends.
• External Engagement: Externally, the business plan remains a valuable tool for engaging with investors, partners, lenders, and other stakeholders. It provides a transparent and comprehensive view of the company’s past performance and future potential.

Important External Tasks of a Business Plan

A business plan holds significance beyond its internal utility, as it acts as the company’s calling card in external contexts. Primarily, it serves as a persuasive tool for potential investors, bolstering the chances of securing essential financing, whether during startup or later stages for marketing initiatives or product development. Additionally, a well-crafted business plan proves valuable in negotiation discussions with potential key partners and regulatory bodies, enhancing the stability of current and future business relationships with customers and suppliers alike.

Here are some significant external tasks associated with a business plan:

• Securing Financial Support: One of the primary external objectives of a business plan is to attract external financing from investors or lenders. A well-prepared plan should clearly communicate the company’s financial requirements and how those funds will be utilized to achieve its objectives.
• Presenting to Investors: If you are seeking investment from angel investors, venture capitalists, or private equity firms, you must effectively present your business plan . This entails pitching your business to potential investors, highlighting key aspects of your plan, and addressing their inquiries and concerns.
• Applying for Financing or Grants: If you intend to secure loans or grants to fund your business, your business plan will be a crucial component of your application. It should demonstrate your capacity to repay loans or meet grant criteria, as well as how the funds will drive growth.
• Negotiating Partnerships and Collaborations: When pursuing partnerships, joint ventures, or alliances with other businesses, a business plan can outline the strategic advantages and potential outcomes of the collaboration. This is vital for persuading potential partners of the value of working together.
• Ensuring Regulatory Compliance: Depending on your industry and location, you may need to submit your business plan to regulatory agencies for approval or compliance. This is particularly common in sectors like healthcare, finance, and energy.
• Obtaining Licenses and Permits: If your business requires specific licenses or permits to operate, your business plan may be requested during the application process to demonstrate your readiness and compliance with regulations.
• Facilitating Mergers and Acquisitions: In mergers or acquisitions, both the acquiring and target companies may need to provide business plans to potential investors or lenders involved in the transaction. This aids in evaluating the financial viability and strategic fit of the merger or acquisition.
• Attracting Strategic Partners: In addition to traditional investors, you may seek to attract strategic partners who can offer resources, expertise, or distribution channels. You r business plan should compellingly illustrate why potential partners should collaborate with your company.
• Preparing for an IPO (Initial Public Offering): If your long-term strategy includes taking your company public, a comprehensive business plan is essential to attract public market investors. It must provide a detailed view of your company’s financial health, growth potential, and market position.
• Undergoing Due Diligence: When external parties consider investing in or partnering with your company, they often conduct due diligence. Your business plan should be precise and comprehensive to withstand scrutiny during this process.

When is a Business Plan Needed

When starting a new business, it makes sense to write a business plan . A strong business concept helps you find investors and convince big business figures, investors, or banks of your business idea.

In addition, a business plan forces a start-up to confront the strengths but also weaknesses of its business idea. However, an already existing company can equally benefit from a business plan. Many companies often lack a clearly recognizable strategy or guidelines against which success can be measured.

A business plan also leads to more transparency in entrepreneurial decisions and is necessary for an already existing company when raising outside capital and investors. An increasing number of investors and capital providers demand the submission of such a plan, thus making a strong business concept so important.

• Startup Phase : A business plan is essential when starting a new venture as it helps define your business concept, target market, and competitive strategy. It outlines your initial funding requirements, revenue projections, and expected milestones, providing a roadmap for the early stages of your business.
• Securing Financing : Whether you’re seeking a bank loan, angel investment, venture capital, or crowdfunding, a detailed business plan is a prerequisite. It should include financial forecasts, an analysis of your industry and competitors, and a clear description of how the funds will be used to grow the business.
• Strategic Planning : Regularly updating your business plan is crucial for strategic planning . It allows you to assess your company’s strengths, weaknesses, opportunities, and threats (SWOT analysis) and adjust your strategies accordingly. It provides a long-term vision and helps align the organization’s efforts toward common goals.
• New Product or Service Launch : Before launching a new offering, a business plan helps you research the market, understand underserved customer needs, and determine the product’s unique selling points. It outlines your marketing and sales strategy, pricing structure, and expected return on investment.
• Mergers and Acquisitions : In mergers and acquisitions (M&A) transactions, a business plan is used to evaluate the financial viability and strategic fit of the deal. It provides insights into the target company’s operations, revenue streams , and potential synergies with the acquiring company.
• Partnerships and Alliances : When exploring collaborations with other businesses, a business plan outlines the mutual benefits and objectives of the partnership. It clarifies roles and responsibilities, risk-sharing arrangements, and how the partnership aligns with each party’s strategic goals.
• Regulatory Compliance : Certain industries, like healthcare, finance, and energy, require businesses to submit comprehensive business plans to regulatory authorities. These plans demonstrate compliance with industry-specific regulations and provide transparency in operations.
• Licensing and Permits : When applying for licenses or permits, particularly in regulated industries such as food service, healthcare, or construction, a business plan may be necessary to prove that your operations meet safety, health, and environmental standards.
• IPO (Initial Public Offering) : Making a company public is a complex process. A thorough business plan is crucial to attract public investors. It should provide historical financial performance, future growth prospects, and a clear value proposition for potential shareholders.
• Crisis Management : In times of financial distress or operational challenges, businesses may develop a crisis management or turnaround plan. This specialized business plan outlines the steps needed to stabilize the company’s finances, restructure operations, and restore profitability.

Example of Business Plan Structure

Generally, there are no fixed guidelines as to how a business plan should be structured. Business concepts heavily depend on the recipient of the business plan and the orientation and structure of the company. The following bullet points are therefore only to be understood as basic building blocks that must be adapted to the individual situation.

1. Business Concept/Business Idea and Strategy:

• Illustrate your business concept, including the idea and methods for successful implementation.
• Include a timeline for implementing the concept.
• Optionally, provide information about your company and headquarters.

2. Company Description:

• Provide detailed information about your company, including its name, location, legal structure, and history.
• Explain your business’s purpose and the problems it aims to solve.
• Describe your target market and your business’s role within it.

3. Target Market:

• Market volume and potential.
• Growth potential.
• Barriers to entry and market restrictions.
• Supplier positioning.
• Relevant laws and regulations.
• Competitor analysis (strengths, weaknesses, product range).
• Identifying potential customers.

4- Operational Plan:

• Describe your business’s day-to-day operations, including location, facilities, equipment, and technology.
• Explain your supply chain, production processes, and quality control.
• Address any regulatory or compliance requirements.

5. Products and Services:

• Describe your products or services, highlighting how they differentiate from competitors.
• Unique Selling Proposition.
• Customer Benefits.
• Competitive Advantages.
• Innovation or optimization of existing products.
• Patent or property rights.

6. Marketing and Sales Planning:

• Outline your marketing strategy and timetable.
• Specify market entry plans.
• Set company goals related to market leadership, market share, revenue, and brand awareness.
• Discuss sales policy, pricing policy, and communication policy & advertising.
• Address sales methods, future developments, and pricing strategy justification.

7. Management, Employees, and Organization:

• Highlight management skills, qualifications, and key team members.
• Emphasize industry knowledge, social skills, previous successes, and professional experience.
• Mention personnel development strategies.
• Describe the organizational structure , focusing on procurement, development, production, sales, and administration.

8. Opportunities and Risks:

• In the ‘Opportunities’ section, showcase the potential of your business idea and the conditions for exploiting that potential.
• Address risks comprehensively, demonstrating a detailed and critical approach.
• Include potential risk scenarios and proposed solutions.

9. Financial Planning:

• Present concrete financial figures derived from previous analyses and plans.
• Profit Planning: Include a profit and loss statement (P&L).
• Balance Sheet: Provide an overview of assets, liabilities, and equity.
• Liquidity Plan: Compare expenditures with available funds.

10. Appendix:

• Include necessary documents like commercial register excerpts, business registrations, shareholder agreements, and legal forms.
• Attach CVs and references of key team members.
• Include relevant financial spreadsheets, patents, permits, licenses, brochures, leaflets, and organizational charts or graphs.

Reasons for Business Plan Failures

• Lack of Market Research: Failing to thoroughly understand the target market and its needs can lead to products or services that don’t resonate with customers.
• Inflexibility: A rigid plan that doesn’t adapt to changing market conditions or feedback from customers can become obsolete quickly.
• Overly Optimistic Projections: Unrealistic financial projections can mislead investors and hinder the business’s ability to meet expectations.
• Poor Execution: Even the best plan will fail without proper execution. A lack of skilled team members, resources, or a clear execution strategy can doom a business.
• Ignoring Competition: Ignoring or underestimating competitors can lead to a business being unprepared for market competition.
• Insufficient Funding: Underestimating the capital required to launch and sustain the business can lead to financial troubles.
• Inadequate Marketing: Without effective marketing, even great products or services may go unnoticed by potential customers.
• Ignoring Customer Feedback: Not listening to customer feedback and adjusting the business accordingly can result in products or services that don’t meet market needs.

Connecting The Dots: Importance of Business Model Canvas in Business Plan

Integrating the Business Model Canvas (BMC) into a traditional business plan is a pivotal process in crafting a comprehensive and highly effective business strategy . The Business Model Canvas , with its visual and succinct approach, offers a distinctive viewpoint on your business model. It functions as a complementary tool to the in-depth components of a traditional plan, strengthening your strategic capabilities. You can download it now.

The synergy between these two strategic instruments not only facilitates communication but also empowers you to analyze and adjust your business strategy with precision, ultimately fostering a pathway to success. In the following discussion, we delve into the significance of bridging the gap between these two potent tools within the domain of business planning. Here’s why the Business Model Canvas is essential within the context of a business plan:

• Visual Representation: The Business Model Canvas provides a visual framework that allows you to quickly grasp and convey the fundamental elements of your business model. This visual clarity is especially valuable when presenting your business concept to potential investors, partners, or team members.
• Concise Overview: While a traditional business plan can be lengthy and detailed, the BMC offers a concise summary of key components, including customer segments, value propositions, channels, revenue streams, and cost structures . It distills complex business concepts into a simplified format, making it easier to communicate and understand.
• Iterative Planning: The BMC encourages an iterative approach to business strategic planning . It enables you to experiment with different business model hypotheses and make adjustments as you gather feedback and insights. This agility is vital, especially for startups and businesses in rapidly evolving markets.
• Focus on Value: The Business Model Canvas places a strong emphasis on understanding customer needs and value creation . It prompts you to identify your unique value propositions and how they address customer pain points, aligning your strategy with customer-centric principles.
• Holistic View: By using the BMC, you’re prompted to consider all aspects of your business model, from customer acquisition to revenue generation and cost management. This holistic perspective helps identify potential gaps, dependencies, and opportunities that might be overlooked in a traditional plan.
• Alignment and Coordination: The BMC fosters alignment among team members and stakeholders. It’s a collaborative tool that encourages discussions about the business model, ensuring that everyone shares a common understanding and vision. This alignment is critical for execution.
• Integration with Traditional Plan: While the BMC is an excellent starting point, it can be seamlessly integrated into a traditional business plan. The insights and clarity gained from the BMC can inform and enrich the sections of the plan related to products/services, target market, marketing strategy, and financial projections.
• Efficiency: The BMC saves time and resources, particularly in the early stages of planning when you’re exploring different business model scenarios. It allows you to focus on the most critical aspects of your strategy before diving into the details.
• Adaptability: In a rapidly changing business environment, having a flexible and adaptable business model is essential. The BMC’s modular structure makes it easier to pivot or adapt your strategy in response to market shifts, competitive pressures, or emerging opportunities.

In summary, a business plan is a multifaceted and indispensable tool for businesses at every stage of their journey. It serves as a compass, guiding strategic decisions, securing essential financing, and attracting potential investors. Its ongoing relevance is a testament to its adaptability, enabling businesses to measure performance, allocate resources, and manage risks effectively. Beyond its practical utility, a business plan is a communication tool, conveying a company’s vision and objectives to both internal teams and external stakeholders. It is a dynamic and ever-evolving document that empowers businesses to navigate uncertainties, foster innovation, and drive sustainable growth, making it an indispensable companion in the pursuit of business success.

Frequently Asked Questions

1- how does a business plan relate to business strategy.

A business plan is closely intertwined with a company’s business strategy. The plan lays out the specific actions and tactics required to achieve the strategic goals of the business. It provides a roadmap for implementing the chosen strategy, outlining how resources will be allocated, what markets will be targeted, and how the business will position itself in the competitive landscape.

2- Is a business plan necessary if I already have a solid business strategy?

Yes, a business plan is still essential, even if you have a well-defined strategy. It serves as the detailed execution plan for your strategy, providing clarity on how you will achieve your strategic objectives. It also helps you anticipate challenges, manage risks, and secure financing or investments by demonstrating the viability of your strategy.

3- Can I use the Business Model Canvas in place of a business plan for a startup?

While the Business Model Canvas is an excellent tool for conceptualizing and validating your business model, it is often not a substitute for a comprehensive business plan , especially when seeking financing or investments. Startups may begin with Canvas to clarify their model but should eventually develop a full business plan to provide in-depth financial projections, market analysis, and operational details.

4- How often should I update my business plan to align with my evolving strategy?

It’s advisable to review and update your business plan regularly, typically at least once a year. However, major changes in your business environment, such as shifts in market conditions or strategic pivots, may require more frequent updates. Keeping your plan current ensures it remains a relevant and effective tool for guiding your business.

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The challenges of growing a business - and how to meet them

Growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions - what worked a year ago might now be not the best approach. All too often, avoidable mistakes turn what could have been a great business into an also-ran.

Recognising and overcoming the common pitfalls associated with growth is essential if your business is to continue to grow and thrive. Crucially, you need to ensure that the steps you take today don't themselves create additional problems for the future. Effective leadership will help you make the most of the opportunities, creating sustainable growth for the future.

This guide highlights the particular risks and mistakes that most commonly affect growing businesses and outlines what you can do about them.

Keeping up with the market

Planning ahead, cash flow and financial management, problem solving, the right systems, skills and attitudes, welcoming change.

Market research isn't something you do as a one-off when you launch your business. Business conditions change continually, so your market research should be continuous as well. Otherwise you run the risk of making business decisions based on out-of-date information, which can lead to business failure.

The more you succeed, the more competitors notice - and react to - what you are doing. A market-leading offer one day may be no better than average a few months later.

Apparently loyal customers can be quick to find alternative suppliers who provide a better deal.

As products (and services) age, sales growth and profit margins get squeezed. Understanding where your products are in their lifecycles can help you work out how to maximise overall profitability. At the same time, you need to invest in innovation to build a stream of new, profitable products to market.

Information sources

Published information can provide useful insights into market conditions and trends. As a growing business, your own experience can be even more valuable.

You should be able to build up an in-depth picture of what customers want, how they behave and which of your marketing approaches work best.

Taking the time to talk to key customers pays off. Your suppliers and other business partners can be important sources of market information. You should encourage your employees to share what they know about customers and the market. Effective IT systems can also make it easier to share and analyse key information such as customers' purchasing behaviour and preferences.

You may want to carry out extra research as well - for example, to test customer reaction to a new product. You might do this yourself, or use a freelance researcher or market research agency.

The plan that made sense for you a year ago isn't necessarily right for you now. Market conditions continually change, so you need to revisit and update your business plan regularly. See the page in this guide on keeping up with the market.

As your business grows, your strategy needs to evolve to suit your changed circumstances. For example, your focus is likely to change from winning new customers to building profitable relationships and maximising growth with existing customers. Existing business relationships often have greater potential for profit and can also provide reliable cash flow. Newer relationships may increase turnover, but the profit margins may be lower, which may not be sustainable. See the page in this guide on cash flow and financial management.

At the same time, every business needs to be alert to new opportunities. There are obvious risks to relying solely on existing customers. Diversifying your customer base spreads those risks.

Following the same business model, but bigger, is not the only route to growth. There are other strategic options such as outsourcing or franchising that might provide better growth opportunities.

It's important not to assume that your current success means that you will automatically be able to take advantage of these opportunities. Every major move needs planning in the same way as a new business launch.

Watch out for being too opportunistic - ask yourself whether new ideas suit your strengths and your overall vision of where the business is going. Bear in mind that every new development brings with it changing risks. It's worth regularly reviewing the risks you face and developing contingency plans.

Good cash flow control is important for any business. For a growing business, it's crucial - cash constraints can be the biggest factor limiting growth and overtrading can be fatal

.Making the best use of your finances should be a key element in business planning and assessing new opportunities. With limited resources, you may need to pass up promising opportunities if pursuing them would mean starving your core business of essential funding.

Every element of working capital should be carefully controlled to maximise your free cash flow. Effective credit management and tight control of overdue debts are essential. You may also want to consider raising financing against trade debts.

Good stock control and effective supplier management tend to become increasingly important as businesses grow. Holdings of obsolete stock may become a problem that needs periodic clearing up. You may want to work with suppliers to reduce delivery cycles, or switch to suppliers and systems that can handle just-in-time delivery.

Planning ahead helps you anticipate your financing needs and arrange suitable funding. For many growing businesses, a key decision is whether to bring in outside investors to provide the equity needed to underpin further expansion.

New businesses often run in perpetual crisis mode. Every day brings new challenges that urgently need resolving and management spends most of their time troubleshooting.

As your business grows, this approach simply doesn't work. While a short-term crisis is always urgent, it may not matter nearly as much as other things you could be doing. Spending your time soothing an irritated customer might help protect that one relationship - but focusing instead on recruiting the right salesperson could lay the foundations of substantial new sales for years to come

.As your business grows, you also need to be alert to new problems and priorities.

For example, your business might be increasingly at risk unless you take steps to ensure your intellectual property is properly protected.

If you are focusing on individual marketing campaigns, you might need to devote more resources to developing your brand.

Identifying the key drivers of growth is a good way of understanding what to prioritise.

A disciplined approach to management focuses on leading employees, developing your management team and building your business strategy. Instead of treating each problem as a one-off, you develop systems and structures that make it easier to handle in the future.

All businesses produce and rely on large volumes of information - financial records, interactions with customers and other business contacts, employee details, regulatory requirements and so on. It's too much to keep track of - let alone use effectively - without the right systems.

Responsibilities and tasks can be delegated as your business grows, but without solid management information systems you cannot manage effectively. The larger your business grows, the harder it is to ensure that information is shared and different functions work together effectively. Putting the right infrastructure in place is an essential part of helping your business to grow.

Documentation, policies and procedures also become increasingly important. The informality that might work with one or two employees and a handful of customers simply isn't practical in a growing business. You need proper contracts, clear terms and conditions, effective employment procedures and so on.

Many growing businesses find using established management standards one of the most effective ways of introducing best practice. Quality control systems can be an important part of driving improvements and convincing larger customers that you can be relied on.

Investing in the right systems is an investment that will pay off both short and long term. You benefit every day from more effective operations. If you ever decide to sell the business, demonstrating that you have well-run, efficient systems will be an important part of proving its value.

Entrepreneurs are the driving force behind creating and growing new businesses. All too often, they are also the people holding them back.

The abilities that can help you launch a business are not the same as those you need to help it grow. It's vital not to fool yourself into valuing your own abilities too highly. The chances are that you'll need training to learn the skills and attitudes required by someone who is leading growth.

To grow your business, you need to learn to delegate properly, trusting your management team and giving up day-to-day control of every detail. It's all too easy to stifle creativity and motivation with excessive interference. As the business becomes more complex, you also need to develop your time management skills and learn to focus on what's really important.

As your business grows, you may need to bring in outsiders to help. You'll want to delegate responsibility for particular areas to different specialists, or appoint a non-executive director or two to strengthen your board. As you start tackling a new opportunity, someone who has experience of that activity can be vital.

For many successful entrepreneurs, learning to listen to - and take - advice is one of the hardest challenges they face. But it may also be essential if you are going to make the most of your opportunities. Some entrepreneurs, recognising their own limitations, even appoint someone else to act as managing director or chairman.

Complacency can be a major threat to a growing business. Assuming that you will continue to be successful simply because you have been in the past is very unwise.

Regularly revisiting and updating your business plan can help remind you of the changing market conditions and the need to respond to them. See the page in this guide on planning ahead.

An up-to-date plan helps you identify what action you need to take to change your business and the way it operates, for example:

• Changing to suppliers who can grow with you and meet your new priorities. As your business grows, consistent quality and reliability may be more important than simply getting the cheapest offer.
• Renegotiating contracts to take account of increased volume.
• Training and developing employees. Your own role will also evolve as the business grows. See the page in this guide on skills and attitudes.
• Making sure that you keep up to date with new technologies.

You need to be fully committed to your strategy, even if it takes you out of your comfort zone. This may involve hard decisions - for example making employees redundant or switching business away from suppliers you have become friends with. But unless you're prepared to do this, you risk putting your business at a dangerous competitive disadvantage.

Original document, The challenges of growing a business - and how to meet them , © Crown copyright 2009 Source: Business Link UK (now GOV.UK/Business ) Adapted for Québec by Info entrepreneurs

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8 Common Challenges Entrepreneurs Face (and How to Overcome Them)

Updated Aug. 5, 2022 - First published on May 18, 2022

By: DP Taylor

The challenges of starting a business are well-known. You wouldn't be here if you didn't wonder what you're in for as you contemplate launching the next app or developing a new beverage.

Entrepreneurial issues are many and varied, and they're unlike any you'll find as an employee in a business. So review entrepreneur challenges first before starting a business, and you'll avoid making common rookie mistakes.

1. Deciding what to sell

Probably the biggest challenge of entrepreneurship is figuring out what kind of product or service to offer. It’s not an easy question because getting it wrong means your business will fail no matter how well-designed and set up it is.

Entrepreneurs must understand the customer who is likely to purchase their product, what market they are seeking to serve, what the competition looks like, what they could offer to give themselves a competitive advantage, if their target market is large enough to support the product, if their target market is too broad, and a host of other issues.

How to overcome it: Self-assess and research

Why a business credit card could transform your small business.

These business credit cards that offer a convenient and efficient way to separate personal and business expenses, simplifying accounting and tax reporting.

Additionally, business cards can provide valuable perks such as rewards points, cashback, and expense tracking tools, enhancing financial management and the potential to help save money in the long run.

You also have to assess yourself to determine if you have the energy to pursue this idea to fruition and whether you have the right skills and strengths for the job.

2. Marketing

To paraphrase sales guru Grant Cardone, if people don’t know you, they can't buy from you -- not won't buy from you but can't buy from you. Marketing introduces you and your brand to customers so it is possible for them to even consider buying your product and service.

But marketing is a challenge for entrepreneurs because oftentimes they’re strapped for cash, and building a brand through marketing can be expensive with no immediate benefit early on. You’ve got to decide how to market your product or service -- choose from mobile, social media, or print -- and determine whether it’s wise to work with outside agencies.

How to overcome it: Test and examine

When you’re starting out lean, you must figure out where your marketing money will get the most bang for the buck. Start small with free social media platforms and try out a few different approaches.

Consider broad, more capital-intensive approaches based on some of the results you see. Always start with a small marketing effort and collect extensive data and business metrics on various approaches before jumping in with both feet.

3. Hiring talent

Entrepreneurs who want to expand must find help. At a certain point, you can’t do it all on your own. But finding the right people is a big challenge, especially early on before you have your own human resources department and processes.

You must learn how to identify what type of people you need, how to evaluate them, and how to integrate them into your business so they are vital parts of your organization rather than “gofers” who need constant direction. You must invest time in reviewing credentials and candidates, or employees may actually hinder success.

How to overcome it: Narrow your focus

Develop a specific description of the role you’re hiring for and a detailed breakdown of what skills and personality attributes you need for the position. Then start vetting applicants, checking each box to see how many of these attributes they meet so you can compare them later. Considering using outside headhunters to take over the process.

4. Delegating authority

It’s not good enough to hire a bunch of people -- you must properly delegate work and responsibility to them. As an entrepreneur, the temptation is to try to do everything yourself, but this is not productive and will limit your company’s growth. Strike a balance between monitoring the business and trusting others to accomplish objectives.

How to overcome it: Learn to trust

Give your employees clear roles and responsibilities, as well as rewards for meeting certain benchmarks. Make them stakeholders in your company’s success. Avoid micromanaging people and processes. Give people the space to use their talents and only step in for minor course corrections. Be patient with others -- and with yourself.

5. Managing time

While it may seem like money is constantly in short supply, time is the only thing that will always be limited. Entrepreneurs must make sure their time is spent on the most important tasks, and they must avoid spending time on tasks team members can do. By freeing up this time, they can focus on the bigger-picture issues, such as how to take the company in a direction for growth.

How to overcome it: Be organized and delegate

Identify tasks that can be delegated and then delegate them. Resist the urge to do them yourself because you know you could do it perfectly. Trust your team members -- they will surprise you with how much they can get done and how well they can do it. Focus on your own strengths and let others handle everything else.

6. Guarding cash flow

Cash is always running for entrepreneurs, so you must guard it carefully. It’s a challenge to ensure revenue is consistent and can always cover costs and payroll. The last thing you want to do is start paying employees late because you didn’t plan cash flow properly, which can have ripple effects on the morale of your staff and their trust in your company and leadership.

How to overcome it: Budget and plan

Entrepreneurs need an effective billing system in place and good record-keeping, which is where accounting software can save the day. This software can account for all costs and help entrepreneurs promptly invoice for service and products. Consider working with an accounting professional if you need extra help in this area -- it’s that important.

7. Finding capital

Before they even get to worry about cash flow issues, an entrepreneur needs capital to get off the ground. This is one of the most significant problems faced by entrepreneurs, particularly those striking out on their own who aren’t well-connected to angel investors with deep pockets.

Without enough financial resources to start your business, it will be doomed to fail. You will need capital for space, equipment, or to develop and produce your product.

How to overcome it: Be resourceful and aggressive

Just like you must be a good salesman to get customers to buy your product, you must also market yourself and your company to potential investors. Consult with banks and investors in your area, or look to public platforms like Kickstarter. Consider approaching family, friends, and associates seeking investment or for connections to someone who might be willing to invest.

A word of caution on taking money from friends and family, however: That money will affect your relationship if things go south, so be very careful before taking this route.

8. Projecting confidence

Becoming an entrepreneur seems fun and exciting, and sometimes it is. But most of the time -- particularly early on -- you’re constantly battling self-doubt. Do you have the confidence it takes to be an entrepreneur ? Are you able to shake off feelings of the imposter syndrome?

Unless you are brimming with confidence and have the spirit to fight through adversity -- because you will face significant obstacles you can’t foresee -- you will struggle as an entrepreneur and will likely quit.

How to overcome it: Believe in your skills and vision

One way to deal with imposter syndrome is to remind yourself that, even when you’re failing, that’s never true. You have skills that are valuable, and your persistence and hard work is admirable and something most people aren’t even brave enough to attempt.

Seek support and advice from other entrepreneurs to get you through the tough times. And don’t completely bat away feelings of doubt. Sometimes they open your eyes to problems that you need to fix, so be honest with yourself and willing to learn from setbacks.

Before you jump in, you need a gut check

Are you excited about entrepreneurship? That’s a good attitude to have. But approaching it like a get-rich-quick scheme with no real interest in the venture itself will result in you flaming out almost immediately.

You must take entrepreneurship very seriously. There is a lot of risk, and the failure rate is high. An entrepreneurial mindset is not enough -- one thing that millionaires and billionaires don't often reveal in their books is how much money they started out with, what kind of connections they or their family had, or other advantages that you probably don't have.

Don’t be fooled by those who suggest the only thing stopping you from overnight success is ambition. Most entrepreneurs either throw in the towel after a short time, or they spend years or even decades slowly building their business.

If you want to be one of the latter, first ask yourself whether you have the stamina to work nights and weekends while you keep your day job to support yourself and your family. Is that a lifestyle you could handle? How badly do you want this?

Once you answer that, the path forward becomes a lot clearer.

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Business Intelligence

Turning Dreams into Reality Starting Your Own Business from Scratch

The thrill and challenge of starting your own business.

Starting your own business can be one of the most exhilarating and rewarding experiences of your life. The prospect of taking control of your future, being your own boss, and turning your passion into a thriving enterprise is undoubtedly exciting. However, it’s also a challenging endeavor that requires meticulous planning, relentless effort, and unwavering determination. This blog post aims to guide you through the essential steps needed to start your own business from scratch, providing valuable insights and practical tips along the way.

Research and Conceptualization

Understanding your target market.

Before you can start your business, you need to understand who your customers are. Conducting thorough market research will help you identify the needs, preferences, and pain points of your target audience. Utilize surveys, focus groups, and online research tools to gather relevant information. Knowing your audience inside and out will enable you to tailor your products or services to meet their specific needs effectively.

Refining Your Business Idea

Once you have a clear understanding of your target market, it’s time to refine your business idea. Evaluate its feasibility by considering factors such as market demand, competition, and potential profitability. Seek feedback from trusted mentors, industry experts, and potential customers. This step will help you fine-tune your concept and ensure it has a strong foundation for success.

Creating a Solid Business Plan

Outlining your business objectives and goals.

A well-crafted business plan serves as your roadmap to success. Start by outlining your business objectives and goals. Clearly define what you aim to achieve in the short term and long term. Your goals should be specific, measurable, achievable, relevant, and time-bound (SMART). This clarity will guide your decision-making process and keep you focused on your mission.

Conducting a Competitive Analysis

Understanding your competition is crucial for standing out in the market. Conduct a competitive analysis to identify your direct and indirect competitors. Analyze their strengths, weaknesses, opportunities, and threats (SWOT analysis). This information will help you differentiate your business and capitalize on gaps in the market, giving you a competitive edge.

Establishing a Financial Plan

A robust financial plan is essential for securing funding and managing your business finances effectively. Outline your startup costs, operational expenses, and anticipated revenue streams. Create detailed financial projections, including profit and loss statements, cash flow statements, and balance sheets. This plan will provide a clear picture of your financial health and help you make informed decisions.

Legal and Administrative Preparations

Choosing a business structure.

Selecting the right business structure is a critical decision that impacts your legal and financial responsibilities. Common options include sole proprietorship, partnership, limited liability company (LLC) , and corporation. Each structure has its advantages and disadvantages, so it’s important to consult with legal and financial advisors to determine the best fit for your business.

Registering Your Business

Once you’ve chosen a business structure, you need to register your business with the appropriate government authorities. This process typically involves selecting a unique business name, filing the necessary paperwork, and obtaining any required licenses or permits. Proper registration ensures your business operates legally and protects your brand identity.

Obtaining Necessary Permits and Licenses

Depending on your industry and location, you may need specific permits and licenses to operate legally. Research the regulatory requirements for your business and ensure you comply with all local, state, and federal regulations. Failing to obtain the necessary permits can result in fines, penalties, and potential business closure.

Building Your Brand and Online Presence

Crafting your brand identity.

Your brand identity is the face of your business. It encompasses your logo, color scheme, typography, and overall visual style. More importantly, it reflects your values, mission, and personality. Invest time in creating a cohesive brand identity that resonates with your target audience and sets you apart from competitors.

Creating a Professional Website

In today’s digital age, having a professional website is essential for any business. Your website should be visually appealing, user-friendly, and optimized for search engines. It serves as a virtual storefront where customers can learn about your products or services, contact you, and make purchases. Consider working with a professional web designer to ensure your site reflects the quality and professionalism of your brand.

Engaging in Digital Marketing Strategies

Effective digital marketing strategies are crucial for attracting and retaining customers. Utilize social media platforms, email marketing, content marketing, and search engine optimization (SEO) to reach your target audience. Consistent and engaging online presence will help you build brand awareness, drive traffic to your website, and generate leads.

Financial Preparation and Funding

Managing personal finances.

Starting your own business often requires personal financial investment. It’s essential to manage your personal finances wisely to avoid unnecessary stress and financial strain. Create a budget, reduce unnecessary expenses, and save diligently. Having a solid personal financial foundation will give you the confidence and stability to pursue your entrepreneurial dreams.

Exploring Funding Options

Securing adequate funding is a common challenge for many startups. Explore various funding options such as personal savings, bank loans, angel investors, venture capital, and crowdfunding. Each option has its pros and cons, so carefully evaluate which one aligns with your business goals and financial needs.

Setting Up an Efficient Accounting System

An efficient accounting system is crucial for tracking your income, expenses, and overall financial health. Invest in reliable accounting software and consider hiring a professional accountant. Proper financial management ensures transparency, helps you make informed decisions, and keeps you compliant with tax regulations.

Setting Up Operational Infrastructure

Sourcing suppliers and vendors.

Establishing a reliable network of suppliers and vendors is essential for ensuring the smooth operation of your business. Research and negotiate with potential suppliers to secure quality materials at competitive prices. Building strong relationships with your suppliers will help you maintain consistent inventory levels and meet customer demands.

Establishing Business Processes

Efficient business processes are the backbone of a successful operation. Document and streamline your workflows, from production to customer service. Implementing standardized procedures will enhance productivity, reduce errors, and improve overall efficiency. Regularly review and optimize your processes to adapt to changing business needs.

Hiring and Building a Team

Your team plays a vital role in the success of your business. Hire individuals who share your vision and bring diverse skills to the table. Foster a positive work culture that encourages collaboration, creativity, and continuous learning. Investing in your team’s growth and development will lead to a motivated and high-performing workforce. You should also consider looking into hosted call center solutions to make it easier on your team to manage the calls that will be flowing in.

Launching and Growing Your Business

Planning a successful launch.

A well-executed launch can set the tone for your business’s future success. Develop a comprehensive launch plan that includes marketing strategies, promotional activities, and customer engagement initiatives. Create buzz and excitement around your launch to attract attention and generate interest. A strong start will lay the foundation for long-term growth.

Strategies for Early Growth

Once your business is up and running, focus on strategies to drive early growth. Monitor key performance indicators (KPIs) and adjust your strategies accordingly. Continuously engage with your customers, gather feedback, and make improvements. Explore opportunities for partnerships, collaborations, and expansion to reach a wider audience and increase your market share.

The Journey Ahead and Ongoing Adaptation

Starting your own business is a dynamic and evolving journey. While the initial steps may seem daunting, remember that every successful entrepreneur started somewhere. Stay committed to your vision, be open to learning, and adapt to changing market conditions. Challenges will arise, but with determination and resilience, you can overcome them and achieve your business goals.

Additional Resources and Tools for Aspiring Entrepreneurs

For further guidance and support on your entrepreneurial journey, consider exploring additional resources and tools. Online courses and business forums can provide valuable insights and assistance. Surround yourself with a supportive network of fellow entrepreneurs and mentors who can offer advice and encouragement.

Starting your own business from scratch is a rewarding and fulfilling endeavor. By following these steps and staying focused on your goals, you can turn your entrepreneurial dreams into reality. Best of luck on your exciting business venture!

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How to Overcome Challenges of Remote Work

Respite from the nerve-wracking commute. No co-workers or managers chattering away at your head, disturbing your peace. The flexibility of eating whenever you want, in whichever attire suits you best. Remote work surely sounds wonderful, doesn’t it? But does it come without its challenges? Unfortunately, no.

Remote work is not all rays of sunshine and rainbows, no matter how much we want it to be. The public and social shutdowns caused by the Covid-19 pandemic taught us that much. According to a report by the United Nations International Labor Organization, employees are more likely to be productive when working outside the orthodox office environment, but they are also more likely to be vulnerable to work-home interferences, longer hours of work, and a relatively more intense work pace, all leading to greater stress in the long run.

According to Upwork’s Future of Workforce Pulse Report , more than 36.2 million Americans will be working remotely by 2025, propelling the world into an 87% increase from pre-pandemic levels. Similarly, a Gallup poll indicates that 56% of U.S. citizens are presently working remotely, either full-time or part-time. With remote work becoming the norm , unprecedented challenges are bound to follow.

So how do we cope with the challenges that accompany remote work environments? Whether you are working remotely, thinking of doing so, or your business operates in such a setting, facing and eradicating these challenges head-on is the key to happiness and success. Let us dive into the most significant problems faced by remote workers and uncover effective tips and strategies on how to overcome them.

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Getting the most important work done.

Remote work can lead to an accumulation of work-related tasks that never seem to end, no matter how many you check off your list. So, how can you ensure that your day is productive while maintaining a suitable workflow?

Mark Twain famously asked people to “eat the frog” first thing in the morning. Meaning, that if you start your day by consuming a live frog, you can continue your day with the satisfaction that the worst thing that could happen to you has already happened. By frog, he did not mean a croaking toad. Instead, frog here refers to the most crucial and biggest task on your to-do list. This is the task you are highly likely to procrastinate on.

1.    Limiting Your Daily Tasks

Just as managing a suitable workflow can prove a hassle in remote work, remote workers are highly likely to take on several tasks each day as unintentional compensation for working from home. So how can you prevent yourself from overestimating your work hours and devoting suitable time to yourself? There are several ways to do so:

Using the Eisenhower Matrix

The Eisenhower matrix works wonders in preventing unnecessary tasks that distract you from your work schedule and enabling you to plan your day as effectively as possible. The plan is to satisfy the 1-3-5 rule by undertaking one big thing, 3 medium things, and 5 small things every day.

Manage Your Energy Instead of Time

One of the primary reasons a big chunk of our to-do list remains unchecked is to plan your tasks according to time instead of your energy. Our energy wanes throughout the day depending upon the kind of tasks we undertake, and thus planning out your day by keeping their energy drain levels can help you spend a productive day at remote work.

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Use Distraction Limiting Tools

Try installing distraction-limiting tools that can help you stay focused. These may also include time-restricted various applications on your mobile phone. Examples of focus tools include:

• Cold Turkey Blocker which blocks your whole system from distracting activities.
• RescueTime tracks the time you spend browsing.
• LeechBlock NG which blocks your browser usage.
• Freedom will block all devices from time-wasting and distracting activities at one time.

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2.    interruptions during the day.

Unprecedented interruptions are bound to hinder your remote work, may it be a doorbell, uninvited guests, or pets. Space restraints can make working remotely even more challenging; it may not always be easy to find a quiet room where you can take your conference call uninterrupted.

So, how can you deal with the various interruptions at home?

There is no magical way of steering clear of all kinds of interruptions when working remotely. It is, however, important to categorize the necessary interruptions from the unnecessary ones: unexpected guests calling on you can wait, but your child getting hurt or asking for lunch because they are hungry, cannot.

Use a “Do Not Disturb” Sign

Apart from being clear about the kind of interruptions allowed during work hours, set up a kind of signal that alerts your family, friends, or neighbors about your unavailability. This may include putting up a “Do Not Disturb” sign outside your door; locking your door altogether and acting like you are not home; or simply putting on noise-canceling headphones and letting the world go away.

Busting Interruption

Another way is to calmly explain to your family and friends how their unnecessary interruptions meddle with your work. Breaking your concentration and expressing your appreciation for their staying out of your way at designated times during the day may help. Communication goes a long way in boosting productivity.

You can also arrange for suitable childcare for your children unless you plan to work only during the hours they are asleep. One of the best ways to avoid interruptions when working remotely is to train your significant other and children to be capable of sustaining themselves. You do not always have to be the person who knows where the broom is or how to fix the baby seat in your car.

Maintain Strict Work Hours

Working remotely without interruptions also requires maintaining strict working hours and allowing only work-related tasks during that time. Use your mobile phone’s work mode option and ignore all irrelevant calls if they interfere with your concentration.

Still, if nothing else works, escape! The best way to make things work in extreme circumstances is to escape to a library, coffee house, or co-working space to finally get the peace you deserve.

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3.    effective communication.

Effective communication goes hand in hand with effective remote working. You can avoid misunderstandings and complications by regularly communicating with your employer and ensuring that you are up to date on all deliverables, expectations, and potential problems. Make sure that you take your employer into confidence and inform them of any challenges that you may come across.

Communicate Regularly

Regular communication minimizes misunderstandings by bringing everyone onto the same page. If you are a remote employer, it is critical to establish an effective and straightforward communication channel that allows unhindered connection. Additionally, you also need to clearly articulate your work expectations as a remote employer, including work schedules, compensation rates, and the tools available for use.

Adequate Access to Resources and Training

Providing your remote employees convenient access to support and training is as critical as their in-person counterparts, which includes IT support and access to necessary hardware and software. You can effectively maintain the morale and productivity of your remote employees by connecting with them and offering feedback and appreciation where it is due.

Another way is to enroll in most business management degree programs to augment your understanding of your workplace requirements and boost productivity while doing something productive with your time.

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4.    lack of human interaction leading to loneliness.

Remote work sounds appealing when it comes to its various benefits. However, your co-workers make up a significant portion of your social circle, if not the whole. Remote work can often lead to feelings of loneliness or disconnection with all of your co-workers online and remote. You may experience this phenomenon even more if you live alone, with no family members to compensate for a lack of physically present co-workers.

You are likely to develop “cabin fever” even with the various technological advancements that bring people closer. Remote workers are also likely to remain in their homes all day after getting off from work, which may further augment such feelings of isolation. So how can you prevent yourself from falling prey to these overbearing feelings? Let us look at some.

Grab a Meal!

Remote workers typically work asynchronously with their co-workers, but nothing stops them from getting together after work hours. Getting together for a meal or sharing other moments of interaction whenever possible can help you develop a tight bond with your remote co-workers. This can help reduce feelings of isolation and dread.

Indulge in Social Activities

However, this is easier said than done since socializing may require considerable effort if one of the primary reasons you work from home is to minimize human interaction. Whether you are an introvert or an extrovert, it is important to strike a balance between your social and work life by including social breaks in your schedule. You can do this by working a few hours and then going out to indulge in a social activity outside your house, such as grabbing lunch with friends or even just going for a walk and getting a snack while casually conversing with the counter person.

You can also opt for co-working spaces to poke a pin in your bubble of isolation, as having humans around you can at least make you feel a part of society. You are likely to develop a bond or friendship with people who work in the same space as you or are simply regular customers.

Another effective strategy to combat the potential sense of doom when working remotely is being more open to local meetings or groups. You can attend networking conferences, meetup groups, or even take recreational classes at centers close to you.

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Remote work is all fun and games as long as you begin to fall prey to a repetitive cycle of isolated work within the same four walls of your room. You are also likely to give way to distractions or end up overworking yourself, which is why striking a balance in your remote work is critical. There are various ways to make remote work even more productive and fun, and now you know all of them! Happy remote working!

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10 Things to Do to Start a General Contracting Business

Embarking on the journey of starting and running a general contracting business can be not just profitable, but also immensely rewarding and exciting under the right circumstances. However, there’s much to consider before you take the leap and strike out on your own.

Ultimately, you need to decide if you wish to be in a leadership role, are prepared financially to follow through on your vision, and have a plan to reach your goals. But be practical. Holding onto your day job may be worthwhile and working your startup general contracting business on the side until things get rolling.

Before going solo, here are 10 things you need to do or think about to get your business off the ground and ensure it grows:

1. Do Your Research

First and foremost, are you truly ready for this? Being an entrepreneur or business owner is a significant responsibility. It means investing time, energy, effort, and money into every aspect of your general contracting business. Thorough research is key to understanding the industry and being prepared for the challenges ahead. 

You need to know everything involved from top to bottom in construction and be responsible for all phases of every project. That includes being your company’s primary salesperson, site project manager, accountant and more. It also means having a business continuity plan .

So, weigh the pros and cons of taking the leap into self-employment and starting your own company. Then, speak to other general contractors who run successful ventures and get their advice and recommendations.

2. Create a Business Plan

A goal without a plan is just a wish. In this case, a comprehensive business plan is your roadmap to success and profitability. It’s a tool that can help you get organized, identify potential challenges, and outline the steps you will take to achieve your goals. It’s also a crucial document when applying for a small business loan, as most financial institutions will want to see your plans before providing funding.

Your business plan should consist of several elements. Include things like the business’s name, description and concept, the types of services you will provide, your target market, your estimated startup costs, and financial projections for how much profit you’ll earn year-over-year.

3. Ensure You Have Financing

Your business plan will help you identify what your startup costs are. Now, you must ensure you have the capital to launch your company, the necessary equipment, and be able to invest in your business. 

Next, you’ll need to open a business bank account (which can help establish credit) and understand your operational costs. That includes equipment and materials expenses and being prepared for unexpected equipment breakdowns and repairs or replacements – which is why tools and equipment insurance for contractors is highly recommended. 

Finally, do a complete review of your finances and estimate your needs now and in the future. After all, even if you have clients lined up, it could be several months before you get paid for the projects you complete, so managing your cash flow is crucial.

4. Register Your Business

Another necessary step is to register your business with the federal government. You’ll need to have a main office address, detail the province or provinces you will operate in, a business name, and select the type of business (sole proprietorship, partnership, corporation, or co-operative).

5. Get Business Permits and Licences

General contractors need to be licensed in their respective provinces to operate legally. You’ll also need to acquire building permits for some projects through the municipality where you’re working, especially if the project involves structural changes to a building.

6. Get Liability Insurance

You must protect yourself, your business, and your customers from unexpected mishaps and accidents. That means getting a contractor’s business insurance policy tailored to your needs. You might require a contractor’s all-risk insurance policy depending on your services and liability risks.

Speak to a licensed broker and ensure you discuss everything to get the coverage you need for your services, vehicles, and equipment. In many instances, a client will require you to have a valid certificate of insurance , or they won’t hire you.

7. Maintain Accurate Bookkeeping

You’ll need to closely monitor all your expenses and income, as well as charge and remit taxes. 

Accounting software such as QuickBooks can help simplify these necessary tasks and is significantly cheaper than hiring an accountant or bookkeeper. 

However, once your business revs up and you’re busy as a bee, hiring a qualified accountant or bookkeeper will ensure you’re profitable and paying your provincial and federal taxes on time while taking advantage of many tax deductions .

8. Promote Your Business

Developing and defining your brand is what will distinguish you from your competitors. Your brand should tell prospective clients who you are, what you do, and your values. Therefore, you’ll need to create a logo that resonates with people (the first thing people will see) and represents who you are as a business.

Once you have an established brand, it’s time to embrace digital marketing online and promote your business offline. For instance, printing high-quality flyers and business cards and distributing them to local businesses and residences can help build brand awareness, as does email marketing , establishing a website and a presence on social media networks . 

These things don’t need to cost a significant amount of money. When starting, you can use a website-building tool such as WordPress or Wix to build a website, and signing up for social media networks such as Instagram and Facebook are free.

9. Establish Supplier Relationships

Developing relationships with your suppliers and vendors can help you secure the raw materials and supplies you need at competitive prices, and may lead to better pricing, service, and reliable delivery.

Based on your services, think about the suppliers you’ll be relying on, such as building materials, electrical, concrete, and landscaping. Prioritize the ones you need most and build resilient and mutually beneficial partnerships with them.

10. Hire Subcontractors

Although you’re the master of your universe as the business owner, you can’t possibly do everything. That means hiring qualified, experienced subcontractors to ensure you deliver high-quality work on time and within budget to your clients. 

For most policies, you will need to ensure your subcontractors have their own insurance . Also, be aware of the taxation and legal requirements involved with hiring and paying an employee or outsourcing work.

Investigating joining a recognized association relevant to your general contracting business may also be worthwhile. For example, if you’re launching a home renovation business in Ontario , you should inquire about becoming a member of the Ontario Home Builders’ Association or the Canadian Home Builders’ Association. Doing so can help you keep abreast of important matters relevant to your industry, provide the opportunity to network and forge partnerships with other contractors, and take advantage of learning resources to grow your venture.

You may need to take several other steps to get your entity off the ground, such as consulting a business lawyer, but now you’re on the cusp of running a contractor business. So, let the real work begin!

– Updated August 9, 2024.

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Event — October 10, 2024

NFTE National Youth Entrepreneurship Challenge 2024

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Student business winners from around the country will compete in this annual challenge. Watch the top 3 present pitches to our VIP judges!

On Thursday, October 10, 2024, 48 regional challenge finalist businesses from around the country will compete in the nineteenth annual NFTE National Youth Entrepreneurship Challenge, presented by the  Citi Foundation  and  EY  with support from  PayPal  and  Santander , and with aspiring entrepreneurs’ travel sponsored in part by the  Ralph Lauren Corporate Foundation.

The Challenge is one of NFTE’s signature events and our most high-profile business plan competition of the year. It culminates with the top 3 finalists competing in front of an invited audience and VIP judge panel, for a total of $18,000 in prizes.

The evening will begin with a cocktail reception and youth entrepreneur showcase at which guests will be able to meet, learn about, and even purchase products from our competitors.

Thursday, October 10, 2024

6:30 pm   EDT  Doors open; youth business expo and cocktail reception 7:30 pm   EDT  Final competition and awards ceremony 9:30 pm EDT  program concludes

Who will be there?

• NFTE alumni, students, teachers and staff
• Key partners, supporters and volunteers
• Entrepreneurs, venture capitalists, investors, and industry executives

The Times Center 242 West 41st Street New York, NY 10018

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5 Ways to Outsmart Seasonal Slumps and Keep Your Online Sales Active Year-Round Seasonal changes offer challenges but also growth opportunities. Businesses can achieve sustainable success by diversifying products, reaching diverse markets, fostering loyalty and conducting strategic planning.

By Slava Bogdan Edited by Micah Zimmerman Aug 8, 2024

Key Takeaways

• Offer more than one type of product to dodge seasonal sales dips.
• Embrace FOMO: Create unique campaigns that turn slow periods into profitable opportunities.

Opinions expressed by Entrepreneur contributors are their own.

The ecommerce landscape is heavily influenced by the calendar year. Specific dates and seasons play a crucial role in shaping consumer behavior and sales trends. Recognizing these key periods – holidays like Mother's Day, Valentine's Day, Back-to-School and Christmas – is crucial for online retailers aiming to optimize their marketing strategies and inventory management.

According to recent data , the holiday season in 2023 saw online spending increase by 6.3% year-over-year compared to in-store spending, which only grew by 2.2%. These periods often see a surge in consumer spending, making them prime opportunities for ecommerce businesses to boost sales and attract new customers.

As the CEO of Flowwow, a global gifting marketplace, I understand the challenges of seasonality firsthand. While our sales naturally peak around holidays, we've developed strategies to smooth out these fluctuations and ensure year-round growth.

Here, I share five key tactics to help your brand overcome seasonality and achieve sustainable growth.

1. Embrace product diversification

Expand your product or service offerings to cater to different yearly needs. Starting as an online bookstore, Amazon has become a retail giant offering everything from electronics and groceries to clothes and furniture. In 2023, Amazon's total consolidated net sales revenue amounted to 575 billion U.S. dollars.

During the pandemic, Flowwow transformed from a floral marketplace to a comprehensive gift-giving platform featuring local brands, resulting in a 77% year-over-year increase in orders. Initially focused on B2B ecommerce, it expanded its horizons with consumer-oriented platforms like Taobao and Tmall and ventured into international markets with AliExpress and cloud services through Alibaba Cloud. This diversification has fueled impressive growth, with Alibaba's revenue surging by a staggering 1692.56% from 2014 to 2024.

Related: How to Recognize Money-Making Trends in The Market

2. Leverage the power of diverse markets

Businesses can create a smoother revenue flow by strategically targeting different markets with distinct peak seasons. For example, Flowwow has successfully leveraged diverse cultural celebrations across its 30+ markets. A Ramadan-themed card game campaign resonated deeply with consumers in the UAE, generating over 10 million media mentions. Similarly, campaigns aligned with Mother's Day in Spain reached a vast audience, underscoring the importance of cultural relevance.

Fashion retailer ASOS provides another compelling example. ASOS has optimized its inventory and marketing strategies by identifying seasonal variations in fashion preferences across different regions. For instance, the company ensures a robust selection of winter apparel for markets in the Southern Hemisphere while catering to summer fashion trends in the Northern Hemisphere.

Related: How Much Do Small Businesses Pay Their Employees? It Varies Significantly By State — Here's the Full Ranking.

3. Build customer loyalty through connection

Many bigger companies allocate part of their marketing budget towards 'customer happiness,' which proves efficient: consumers with high emotional engagement choose the brand 82% of the time. Positive experiences are the cornerstone of brand loyalty. Companies understand this, so they strive to foster closer interactions with their customers.

As for 2023, Amazon is second on the list of brand loyalty . Benefits of the service, like free two-day shipping, video streaming, and Prime Day sales, keep customers coming back. And Amazon consistently seeks to enhance customer satisfaction by improving its delivery and fulfillment systems and creating new merchandise.

Focus on a convenient interface, relatable deals, compassionate customer service, and high-quality service, and witness the growth of your brand's satisfaction score and the strengthening of brand affinity. A mere 5% increase in customer retention can lead to a staggering 25-95% increase in profitability.

Related: 5 Ways to Build Highly Valuable Brand Loyalty

4. Plan for peak days in advance

Peak seasons offer growth opportunities, but they can strain resources. Analytics and forecasting are crucial to smooth out expenses throughout the year. We base our spending on the previous standard month's income, allocating a portion for marketing and hiring based on performance.

Peak seasons can overload platforms. Unexpected bottlenecks can emerge while we prepare by analyzing load, conducting tests, and expanding capabilities. For example, a partner payment processor might be unprepared for the surge. Customer support is crucial during these periods. Our large customer support and online reputation management departments handle feedback. When negativity spikes, other teams, particularly marketing, are involved to address concerns. This is how we processed three million orders in 2023 with a 97% customer satisfaction score.

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More From Forbes

The 10 biggest challenges every entrepreneur faces (and how to conquer them).

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To be an entrepreneur means to be someone who takes on challenges. It is absolutely synonymous. It also means you are a problem solver. Knowing what is ahead is half the battle.

The list below is compiled from the challenges that I have recognized from interviewing some of the most successful entrepreneurs on the DealMakers Podcast .

1) Taking the First Leap

The biggest struggle for most would be entrepreneurs is taking that first leap. It may be quitting a job, putting up a website, entering a startup accelerator program, approaching someone with your first pitch, or just announcing your venture to the world and family and committing the dollars and credit you have.

This normally comes after a fair amount of brainstorming and planning. That can be a time when your mind frequently plays tricks on you. Fear and doubt creep. You can make plenty of excuses. There are more than enough to choose from. Including timing of your launch.

From all the super successful entrepreneurs I’ve interviewed two things stand out here. The first is that many of the most successful billion dollar startups were launched and acquired in what most would consider the worst crises and economic times. The timing is always better than you think. Figuring it out as you go is one of the most fun and rewarding parts of being an entrepreneur. Just do it.

2) The Time it Takes for Results to Show Up

Big ‘overnight’ success is really the culmination of steady, consistent small efforts over time. That applies to sales, press, and fundraising. Unfortunately, the vast majority of entrepreneurs fold and quit right before the big pay off hits.

If only they would have held on for another day, week or month, everything would have come together. Often far bigger than they imagined.

In fact, just like Muhammad Ali, the big startup winners are often just those who held out longer, and kept going when everyone else quit and went home. Determine to hang in there. It’s worth it.

3) Cash Flow

Cash flow shortages are one of the most common reasons for new business failures is cash flow management.

During his interview on the DealMakers Podcast, the founder of the hot TRX suspension training brand, Randy Hetrick, warns that you can go broke in your best month ( listen to the full episode here ). In fact, that’s often when it happens. You may have just taken a record number of orders. Yet, you also may have a record amount of expenses to deliver on those promises before you get paid and put the money back in the bank. A hurricane could come through and stall your income for a month. A government shutdown could kick in and freeze all the payments from a big government contract.

Beat this by paying attention to your cash flow needs and projections. Then make sure you have insurance and have some financial reserves. Or at least some emergency credit. Always raise more money than you think you’ll need.

4) Fundraising for Your Startup

There’s a lot more work to startup fundraising than most new entrepreneurs realize. Not having a full understanding of the process and what it takes can lead to a lot of frustration, if not failed rounds, or at least miserable terms.

Raising a round can take from 6 to 12 months. Even the best startups and founders can face 200 no’s for every check they bring in. Then it all starts again.

When it comes to fundraising it is all about mastering storytelling and capturing the essence in 15 to 20 slides.  For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel ( see it here ) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M ( see it here ).

5) Due Diligence

What really becomes challenging in fundraising is the due diligence process after you get funding commitments. The same applies to exits.

Learn as much about this process in advance, and get expert advice on how to manage it well. Not only in terms of execution, strategy and investor updates, but mentally and physically surviving the mayhem and stress as well.

6) Time Management

We all, always want more time. Why can’t there be 48 hours in a day, and 10 days in a week

Unfortunately, we all share exactly the same number of hours in a day. Some will have far fewer days than others.

There will be a lot more to juggle than you imagine if you are hoping to build a true fast growth startup. You’ll be wearing many hats, and probably doing tasks you never imagined. Yet, you can’t allow that to rob you of time for a full life either. There are no do-overs when it comes to relationships.

Set some boundaries in advance. Remember what is truly most important. Harness all the best time and productivity hacks you can.

7) Delegating

Many great entrepreneurs and business owners still really struggle with this. They may preach it. They may be very intelligent and talented. They just can’t get out of their own way. So, they get stuck owning a small business or being a freelance agent, instead of scaling a true startup and industry disrupting company.

The bottom line is that you aren’t going very far unless you learn to hire, outsource, delegate, and more importantly, empower those people to do awesome work. Hire the best. They might not do it 100% like you, but they may actually generate even better results.

8) Balancing Perfection & Progress

The above is a great way to break the chains of getting bogged down in the never ending pursuit of perfection and detailed minutiae.

Do pay attention to the details and polish. It can make a difference. Yet, you aren’t getting anywhere unless you actually take action.

As Seth Godin puts it, you need to recognize the difference between almost barely good enough, and perfect enough.

9) Keeping Ego Under Control

So far this list has focused on challenges in getting to the top. Well, success can bring more. Chief among them is ego. Your ego can lead you to make many mistakes, bad decisions, and generally let your inner beast go on rampage at the cost of your relationships, if you aren’t mindfully keeping it in check.

10) Seeing The Company Fail After an Exit

It’s a lot sexier to talk about raising big rounds of VC money and selling companies for billions of dollars. What few talk about is the challenge and pain in seeing a company once loved not be used, underperform or go bankrupt after an exit.

If you’re lucky you might be able to buy it back at a discount. A better strategy is to find a great home and custodian for it when you decide to sell. That may be far more valuable to you than the price you get.

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