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What Is a Business Plan?

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

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

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

Key Takeaways

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

Investopedia / Ryan Oakley

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

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

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

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

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

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

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

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

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

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

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

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

2 Types of Business Plans

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

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

Why Do Business Plans Fail?

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

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

What Does a Lean Startup Business Plan Include?

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

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

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

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

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

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How to Write a Business Plan, Step by Step

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What is a business plan?

1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

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

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

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

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

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description. This should contain basic information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.

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

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

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

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

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

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

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

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

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

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

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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

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

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

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

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

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

Let’s get started.

Why Are Business Plans Important?

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

1. Proves Your Business Viability

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

2. Guides You Throughout the Business Cycle

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

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

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

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

3. Helps You Make Better Business Decisions

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

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

4. Eliminates Big Mistakes

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

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

5. Secures Financing and Attracts Top Talents

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

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

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

Key Elements of Business Plan

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

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

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

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

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

1. Executive Summary

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

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

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

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

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

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

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

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

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

Components of an Executive Summary

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

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

2. Business Description

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

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

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

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

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

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

Components of a Business Description

Your business description needs to contain these categories of information.

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

3. Market Analysis

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

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

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

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

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

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

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

Market Analysis Factors

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

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

Components of the Market Analysis Section

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

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

4. Marketing Plan

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

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

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

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

5. Sales Strategy

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

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

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

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

6. Competitive Analysis

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

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

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

This section should define the following:

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

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

7. Management and Organization

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

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

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

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

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

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

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

8. Products and Services

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

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

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

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

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

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

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

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

9. Operating Plan

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

The operating plan for your business should include:

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

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

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

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

10. Financial Projections and Assumptions

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

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

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

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

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

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

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

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

11. Request For Funding

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

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

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

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

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

12. Exhibits and Appendices

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

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

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

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

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

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

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

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• How to Use Your Business Plan Most Effectively
• The Basics of Writing a Business Plan
• 12 Reasons You Need a Business Plan
• The Main Objectives of a Business Plan
• What to Include and Not Include in a Successful Business Plan
• The Top 4 Types of Business Plans
• A Step-by-Step Guide to Presenting Your Business Plan in 10 Slides
• 6 Tips for Making a Winning Business Presentation
• 12 Ways to Set Realistic Business Goals and Objectives
• 3 Key Things You Need to Know About Financing Your Business
• How to Perfectly Pitch Your Business Plan in 10 Minutes
• How to Fund Your Business Through Friends and Family Loans and Crowdsourcing
• How to Fund Your Business Using Banks and Credit Unions
• How to Fund Your Business With an SBA Loan
• How to Fund Your Business With Bonds and Indirect Funding Sources
• How to Fund Your Business With Venture Capital
• How to Fund Your Business With Angel Investors
• How to Use Your Business Plan to Track Performance
• How to Make Your Business Plan Attractive to Prospective Partners
• Is This Idea Going to Work? How to Assess the Potential of Your Business.
• When to Update Your Business Plan
• How to Write the Management Team Section to Your Business Plan
• How to Create a Strategic Hiring Plan
• How to Write a Business Plan Executive Summary That Sells Your Idea
• How to Build a Team of Outside Experts for Your Business
• Use This Worksheet to Write a Product Description That Sells
• What Is Your Unique Selling Proposition? Use This Worksheet to Find Your Greatest Strength.
• How to Raise Money With Your Business Plan
• Customers and Investors Don't Want Products. They Want Solutions.
• 5 Essential Elements of Your Industry Trends Plan
• How to Identify and Research Your Competition
• Who Is Your Ideal Customer? 4 Questions to Ask Yourself.
• How to Identify Market Trends in Your Business Plan
• How to Define Your Product and Set Your Prices
• How to Determine the Barriers to Entry for Your Business
• How to Get Customers in Your Store and Drive Traffic to Your Website
• How to Effectively Promote Your Business to Customers and Investors
• What Equipment and Facilities to Include in Your Business Plan
• How to Write an Income Statement for Your Business Plan
• How to Make a Balance Sheet
• How to Make a Cash Flow Statement
• How to Use Financial Ratios to Understand the Health of Your Business
• How to Write an Operations Plan for Retail and Sales Businesses
• How to Make Realistic Financial Forecasts
• How to Write an Operations Plan for Manufacturers
• What Technology Needs to Include In Your Business Plan
• How to List Personnel and Materials in Your Business Plan
• The Role of Franchising
• The Best Ways to Follow Up on a Buisiness Plan
• The Best Books, Sites, Trade Associations and Resources to Get Your Business Funded and Running
• How to Hire the Right Business Plan Consultant
• Business Plan Lingo and Resources All Entrepreneurs Should Know
• How to Write a Letter of Introduction
• What To Put on the Cover Page of a Business Plan
• How to Format Your Business Plan
• 6 Steps to Getting Your Business Plan In Front of Investors

The Top 4 Types of Business Plans Not all business plans looks the same. Here's how to customize your plan to your specific goals.

By Eric Butow • Oct 27, 2023

Opinions expressed by Entrepreneur contributors are their own.

This is part 11 / 11 of Write Your Business Plan: Section 1: The Foundation of a Business Plan series.

When it comes to writing a business plan, one style does not fit all.

Different industries require different plans. A retailer isn't much like a manufacturer, and a professional services firm isn't much like a fast-food restaurant. Each requires certain critical components for success—components that may be irrelevant or even completely absent in the operations of another type of firm.

For example, inventory is a key concern for both retailers and manufacturers. Look at Walmart, one of the great all-time success stories in retail. Expert, innovative management of inventory is an integral part of its success. Any business plan that purported to describe the important elements of these businesses would have had to devote considerable space to telling how the managers planned to manage inventory.

Related: The Basics Of Writing A Business Plan

Contrast that with a professional services firm, such as a management consultant. A consultant has no inventory whatsoever. Their offerings consist entirely of the management analysis and advice they can provide. They don't have to pay now for goods to be sold later or lay out cash to store products for eventual sale. The management consultant's business plan, therefore, wouldn't have a section on inventory or its management, control, and reduction.

This is one obvious example of the differences among plans for different industries. Sometimes, even companies in more closely related industries have significantly different business plans. For instance, the business plan for a fine French restaurant might need a section detailing how the management intends to attract and retain a distinguished chef. At a restaurant catering to the downtown lunchtime crowd, you might devote much plan space to the critical concern of location and quick turnaround of diners with very little about the chef.

Related: The Benefits and Risks of Writing A Business Plan

You want your plan to present yourself and your business in the best, most accurate light. That's true no matter what you intend to use your plan for, whether it's destined for presentation at a venture capital conference or will never leave your office or be seen outside internal strategy sessions.

When you select clothing for a momentous occasion, odds are you try to pick items that will play up your best features. Think about your plan the same way. You want to reveal any positives your business may have and ensure they receive due consideration.

Related: The Main Objective Of A Business Plan

Business plans can be divided roughly into four distinct types: Mini-plans, presentation plans or decks, working plans, and what-if plans. Each plan requires different amounts of labor, not always with proportionately different results. A more elaborate plan is not guaranteed to be superior to an abbreviated one. Success depends on various factors and whether the right plan is used in the right setting. For example, a new hire may not want to read the same elaborate version that might be important to a potential investor.

The Mini-Plan

The mini-plan is preferred by many recipients because they can read it or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights while telling the same story. For a small business venture, it's typically all that you need. For a more complex business, you may need a longer version.

Related: How To Write A Business Plan

The Presentation Plan

Created with PowerPoint or a similar platform, this is how most plans are presented. And while today's plan is shorter than back in the day, it's not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of your business. However, presenting your plan as a deck can be very powerful. Readers of a plan can't always capture your passion for the business, nor can they ask questions when you finish. In 20 minutes, you can cover all the key points and tell your story from concept and mission statement through financial forecasts.

Related: How To Craft A Business Plan That Will Turn Investor Heads

Remember to keep your graphics uncluttered and to make comments to accentuate your ideas rather than simply reading what is in front of your audience. While a presentation plan is concise, don't be fooled. It takes plenty of planning. The pertinent questions—Who? What? Where? Why? When? and How?—need to be answered.

The Working Plan

A working plan is a tool to be used to operate your business. It is long on detail but cshort on presentation. As with a mini-plan, you probably can afford a somewhat higher degree of candor and informality when preparing a working plan.

Related: 6 Tips For Making A Winning Business Presentation

In a presentation plan, you might describe a rival as "competing primarily on a price basis." But in a working plan, your comment about the same competitor might be, "When is Jones ever going to stop this insane price-cutting?"

A plan intended strictly for internal use may also omit some elements that you need not explain to yourself. Likewise, you probably don't need to include an appendix with resumes of key executives. Product photos are also unnecessary. Internal policy considerations may guide the decision about including or excluding certain information in a working plan. Many entrepreneurs are sensitive about employees knowing the precise salary the owner takes home from the business.

Related: 12 Reasons You Need A Business Plan

To the extent such information can be left out of a working plan without compromising its utility, you can feel free to protect your privacy. This document is like an old pair of khakis you wear to the office on Saturdays or that one ancient delivery truck that never seems to break down. It's there to be used, not admired.

The What-If Plan

When you face unusual circumstances, you need a variant on the working plan. For example, prepare a contingency plan when you are seeking bank financing. A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Related: How To Hire The Right Business Plan Consultant

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training, and reduce duplicative efforts? Such what-if planning doesn't have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel, and other variables so you can make good decisions.

What sets these kinds of plans apart from the working and presentation plans is that they don't necessarily describe how you will run the business. They are essentially more like an addendum to your actual business plan. If you decide to acquire that competitor or grow dramatically, you will want to incorporate some of the thinking already invested in these special purpose plans into your primary business plan.

Related: Do You Need To Write A Formal Business Plan

If you are looking for extra guidance with an industry-specific business plan, you can visit Bplans.com to access over 500 free real-world business plan examples from a wide variety of industries to guide you through writing your own plan. If you're looking for an intuitive tool that walks you through the plan writing process, you can try LivePlan . It includes many of these SBA-approved business plan examples and is especially useful when applying for a bank loan or outside investment.

More in Write Your Business Plan

Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.

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Starting a Business | Listicle

4 Types Of Business Plans (Plus Software & Writing Services)

Published April 20, 2020

Published Apr 20, 2020

WRITTEN BY: Blake Stockton

This article is part of a larger series on Starting a Business .

A business plan is a written document that explains how a business will succeed. All businesses should have some type of plan. If you’re making a more in-depth business plan, consider using a software to keep your thoughts and financial projections well organized.

In this article, we talk about four types of business plans:

• One-page Business Plan
• Traditional Business Plan
• Business Model Canvas
• Business Pitch

Over time, you may make several of these business plans. For example, if your business starts as a weekend side-hustle, you may start with a one-page plan and a pitch—which verbally communicates your business.

Once your business grows, you may need financing from a bank. To be eligible for financing, you will need a traditional plan. If your business continues to grow and you have an executive team, you may choose to do a Business Model Canvas, which works well for input from a large group.

1. One-page Business Plan

The one-page business plan is for a very small business such as a side-business. It’s a great way to get your ideas on paper and to work out the fundamentals of the business. With this plan, you’ll write a couple of sentences for important business concepts. It should include items such as the business model (how will it make money?) and competitive advantage (what will it do better than competitors?).

You should plan on spending around an hour to write out a one-page business plan. The simplified financial projections will be the most challenging and time-consuming. You most likely will need to do research online to get accurate income and expense estimates.

Click here to download our one-page business plan template to start your business planning today

Sections For The One Page Business Plan

Write one to two sentences to answer the following questions:

• Problem: What problem will your business solve?
• Solution: What will your business provide to solve that problem?
• Business model: How will your business make money?
• Target customers: What type of people will buy your product or service?
• Promotion: How will your target customers learn about your business?
• Competitive advantage: What will your business do better than the competitors?
• Financial projections: How much money do you need to start? How much will you earn every month? And how much will you spend every month?
• Funding required: How much money do you need to start the business?

What To Do After Creating Your One-page Plan

Once you create your plan, don’t just shove it in a desk drawer. Share it with supportive friends, family, and mentors for feedback. Consider updating the mini-plan based on their thoughts.

You may also want to do a few of the one-page biz plans to work out several business ideas you have. If you can’t decide which business to start, here’s a strategy to decide on one business. While writing the plans, pay attention to which business plan gets you most excited. Let your excitement point you in the direction of which biz to choose.

2. Traditional Business Plan

The traditional business plan is more in-depth and thorough than the one-page business plan. A traditional plan may contain over 40 pages of info about your business. Typically, you’ll use this plan to get funding from a bank such as a larger loan. You may also use a traditional business plan to attract investors to your business.

You should plan on spending at least 30 hours creating a well-researched business plan. In addition to writing the plan, you will also spend time doing market research and creating financial projections.

As a small business consultant, I’ve reviewed dozens of traditional business plans. Most business owners can easily do the research and write the plan. Where most have difficulty are the financial projections, which require creating several financial documents. If you don’t have a financial analysis background or interest, it’s a wise strategy to purchase a business plan software that walks you step-by-step through the financial projection process.

Traditional Business Plan Sections

• Opening Organizational & Legal Pages: The opening pages of your business plan need to be a cover page, nondisclosure agreement, and a table of contents.
• Executive Summary: You will complete this section last. It is a summary of the entire plan in less than two pages.
• Company Summary: Discuss the basics of the company such as its history, location, facilities, company ownership, and competitive advantage.
• Products & Services: Talk about how your business makes money (business model), the products or services it provides, and future products or services.
• Market & Industry Analysis: This section analyzes your potential customers and industry. Include any data here about your current (or ideal) customers, business industry, and competitors.
• Marketing Strategy & Implementation Summary: How will you reach your customers? Discuss your marketing, sales, and pricing strategy.
• Management & Organization Summary: Who will own and operate the business? If your business isn’t open yet, give a compelling reason why your background will make it a success. Include information on any managers in the business as well.
• Financial Data & Analysis: Here you want to show in charts and graphs how your business will be a success. You will include financial projections such as a profit & loss statement, projected cash flow, and business ratios.
• Appendix: Any documents or information that doesn’t fit in the above categories goes in the appendix. You may want to include documents such as a floor plan, trademark, or marketing materials.

Financial Projections

For a new business owner to complete a business plan, the financial projections will be the most challenging part. It’s difficult because you are mostly guessing how much money the business will make and spend every month for the next three years. Additionally, financial terminology and how it all flows together can make your head hurt.

Bankers and investors require financial projections in a business plan because they want to learn how you believe they will make their money back. It’s also a great idea to track your projections and update it with actual data as the business progresses.

A no-cost way to create financial projections is to use SCORE’s free template . If you are overwhelmed by the free Excel document, I’d recommend using a business plan software . The LivePlan software walks you step-by-step through the financial projection process and turns your financial data into easy to read charts and graphs.

3. Modern Business Plan: Business Model Canvas

The Business Model Canvas (BMC) is an alternative to the traditional business plan. Released in 2008 , it updates sections such as Customer Relationships and Key Partnerships.

Many business owners prefer to use the BMC because it can be done as a visual exercise with the leadership team. Together, the team can go through each section and provide high-level input. Once you create the basics of the BMC, it’s easy to share with others. The contents can be summed up on one page, whereas the traditional plan above will likely be at least 40 pages.

Business Model Canvas Sections

• Customer Segments: Who are the most important type of customers or businesses that will be buying your products or services?
• Value Propositions: What value will you be delivering to customers? What customer problems are you trying to solve?
• Channels: What channels will you use to reach customers and maintain relationships?
• Customer Relationships: How will you maintain relationships with your customers?
• Key Resources : Who are the key people (inside the business), and what are the patents, places, and machines that the business couldn’t operate without?
• Key Activities: What crucial activities need to be done in the business so that you can serve your customers?
• Key Partnerships: What people or organizations (outside of the business) help your business operate such as suppliers or referral sources?
• Cost Structure: What are the largest expenses in your business? List at least seven.
• Revenue Streams: In what ways will your business earn money? If possible, list specific numbers such as the average earned per product or service performed.

Getting A Loan Or Investor with A BMC

Both banks and investors are becoming more open to accepting a Business Model Canvas instead of a traditional business plan. If you’re choosing to do a BMC to receive funding, always check with the bank or investor to determine if they will find it as an acceptable business plan.

Even though we didn’t discuss as a section for the BMC, when seeking funding, you must include thorough financial projections (similar to the traditional plan). Bankers and investors mostly care about how much money you believe the business will earn over the next three years, and how they will make their investment back.

Learn More About The BMC

You can learn about the specifics of the Business Model Canvas for free through blog posts and articles online. However, if you’re serious about applying it to your business, I recommend purchasing the official book by the creators of the BMC, called Business Model Generation. The book will walk you step-by-step through each section and provide several examples.

4. Business Pitch

A business pitch is a short explanation of your business in about 60 seconds. Many people also call this the elevator pitch. If you’re involved in the tech world, a business pitch is typically a 10 to 20-minute presentation given to angel investors and venture capitalists.

However, the typical business owner won’t be traveling to Silicon Valley, asking for a large sum of money.

When starting their business , the typical business owner will be explaining their business hundreds, if not thousands, of times. So in our perspective, the short verbal explanation is the business pitch. Use it to get customers, vendors, business peers, or potential partners excited about your business.

Business Pitch Structure

Depending on who you are telling your pitch to, the structure of your business pitch will change. For example, you probably won’t be including the business model info with a potential vendor; however, you would use it with a prospective business partner.

• Problem: In the first few seconds of the pitch, describe the problem your customer is having. If possible, try to connect it with the listener because it will make your message more personal.
• Solution: Immediately after the problem, discuss how you will solve it with your product or service.
• Business Model: If it isn’t apparent how your solution will make money, discuss it next. This clarification is especially important if you’re speaking to someone like an investor.
• Opportunity: Use statistics about your target customer and industry to explain how much potential your business has.
• Team: Mention your background and the team’s background. Consider mentioning facts like the total number of years’ experience in the industry, or prior successes.
• Ask: At the end of your pitch, your listener should be excited. Don’t let that excitement go to waste. Always ask for support in some way, which could be as small as visiting your website, or as large as asking for a million-dollar investment—just like Shark Tank!

How To Get Good At Delivering The Pitch

It’s a simple formula to get good at delivering the pitch: practice. Resolve to say your 60-second pitch 10 times per day. Say it in front of the mirror, in the car, and while walking the dog. The ultimate goal is to not stumble through your pitch, or stop to think what to say next.

Once you are somewhat confident in delivering the pitch, start saying it in front of people. Notice their body language. Do they make a face when you say a particular word or sentence? Maybe they are confused about what you’re saying. Do they look bored after 15 seconds? Perhaps your beginning hook isn’t strong enough.

Business Plan Software

A business plan software holds your hand step-by-step through the business plan creation process. Typically, software helps you create a traditional business plan that is ready to present to a banker or investor.

If you’re creating financial projections, I highly recommend purchasing business plan software. This purchase will keep you from working within a complicated Excel spreadsheet and makes your financial data look well organized in charts and graphs.

What To Look For In A Business Plan Software

Price: The cost of a business plan software is fairly similar. Expect to pay around $15 per month to access the software.

Ease of use: If possible, try a demo of the software to ensure it’s easy to use. Some biz plan software may not have been updated in several years and could be difficult to navigate.

Business plan design: When you print out your business plan, you want it to look professional. Also, certain software allows you to add graphics and visuals throughout your plan.

Diversity of products: In addition to the biz plan software, many companies provide resources such as marketing tools or connections with investors.

Educational materials: It’s important for a software to have quality educational materials so that you can learn as you create the plan. Some software includes video teachings.

Customer support: If you need help navigating the software or have questions about your biz plan, you’ll want to be able to reach a customer rep for guidance.

The Most Popular Biz Plan Software

The most popular business plan software available is from LivePlan They provide a 60-day free trial of their software so you can test it and make sure it’s the right fit for you.

One of LivePlan’s strongest features is its detailed and easy-to-use financial projections. The software asks you questions about your business, and it automatically calculates financial data like the gross margins and business ratios.

Software For A Tech Startup

If your business is a tech startup, your goals are different from the average business. You may need a large amount of capital to fuel your high-growth business.

Appealing to venture capital firms require different business plan elements such as working capital, gross margins, and available cash. Bizplanprovides those features for startups and helps them connect with potential investors.

Business Plan Writing Services

If you need a business plan, but don’t want to write it yourself and don’t want to use a software, you can pay a professional to create it for you. Several companies provide business plan writing services with experts who do market research and create custom-designed plans. Many of these companies also offer other writing services such as a pitch deck, feasibility study, or franchise-specific plan.

How To Choose A Biz Plan Writing Service

When choosing a business plan writing service, you first want to review the background of the writers. Some companies provide writers with MBAs (Master of Business Administration).

You also want to review samples of the business plans created. Remember, the company likely provided the best-designed business plans they have, so make sure to ask how much a particular well-designed business plan will cost, which may be out of your budget.

Cost Of A Business Plan Writing Service

A basic business plan writing service usually costs a minimum of $2,000. However, if your plan requires extensive research, custom graphics, and enhanced overall design, that cost can go up to over $10,000.

Contact Your Local SBDC For A Review

If you have your business plan and are looking for someone to review it for feedback, your local SBDC (Small Business Development Center) may be able to help. The SBDC provides no-cost consulting and is funded in part by the SBA (Small Business Administration). There are over 1,000 SBDC locations across the US.

One of the SBDC’s core services is to provide detailed reviews of business plans. Depending on the expertise of your local SBDC Consultants, you may get lucky and have a business plan expert at your local center. Inquire if he or she can review your biz plan and provide feedback.

Obtain Capital

After creating your business plan, the next step in your journey to start a business is to obtain adequate capital . When potential business owners hear the word “capital,” they often think about big loans from banks. However, capital could also be a much smaller amount, such as $2,000 from a credit card or $5,000 from a crowdfunding campaign.

Bottom Line

Remember to revisit your business plan often. Even after one month, you may learn new insights about your product and market that requires a business plan revision. If you’re creating financial projections, it’s a business best practice to update your projections monthly with actual sales and expense data to determine if your assumptions you made are accurate.

About the Author

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Blake Stockton

Blake Stockton is a staff writer at Fit Small Business focusing on how to start brick-and-mortar and online businesses. He is a frequent guest lecturer at several undergraduate business and MBA classes at University of North Florida . Prior to joining Fit Small Business, Blake consulted with over 700 small biz owners and assisted with starting and growing their businesses.

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1.4: Chapter 4 – Initial Business Plan Draft

• Last updated
• Save as PDF
• Page ID 21278

• Lee A. Swanson
• University of Saskatchewan

Learning Objectives

After completing this chapter, you will be able to

• Develop a comprehensive business plan draft

This chapter describes an approach to writing your draft business plan. It also outlines the elements of a comprehensive business plan that can be used as a template for starting your business plan.

Figure 7 – Initial Business Plan Draft (Illustration by Lee A. Swanson)

Effective Business Plans

Effective business plans

• Provide statements that are backed by evidence or data
• Include context and references with every table, figure, or illustration
• Include relevant, clear, concise tables and financial information, and exclude unnecessary material
• Present timelines for distinct purposes
• Use clear sections customized to the particular business or its environment rather than generic sections

Writing the Draft Business Plan

Although there are various ways to approach the task of writing a draft business plan, one effective approach is to do the following:

• This will provide you with a template for the information needed for your plan.
• You can copy and paste the results of your essential initial research into the sections of your business plan template where you believe that they can be used to support or justify the strategies and other decisions you will later describe in those sections. Of course, you can later move those parts of your environmental scan as needed as you develop your plan. In general, this strategy results in a stronger business plan .
• Completing this step will give you the satisfaction of seeing some of your work so far taking shape in the form of a business plan.
• Also, inserting the results from your environmental scan into the relevant sections of your plan should later provide you with the stimulus and support you will need to develop solid, realistic, evidence-based strategies and decisions for those sections.
• Incorporate your business model into your new business plan template. As there is no section in a business plan in which you specifically describe your business model, you will need to incorporate your business model elements into appropriate sections of your plan.
• You will normally include both information that you got from particular sources and information based on an assumption you made (and that you might intend to replace later with more accurate information from valid sources).

Follow these practices as you develop your plan:

• When you do this, you help establish your credibility as a business plan writer, and your business plan’s credibility. It also might save you time later when you discover that you need to add a similar item along with its cost to your list.
• Note: Do not reinvent the wheel by “inventing” your own method to reference your sources and do not use multiple methods. Use one (and only one) proper and well-established referencing method, like APA. This will improve the degree of professionalism of your plan.
• Note: if you are an expert source on something—maybe you are a construction expert that business plan readers will trust to do estimates on building costs—you should establish your credentials and clearly indicate when some of the information in your plan is based on your own expert knowledge.
• When you flag your assumptions in this way, you can quickly and easily see what information needs to be replaced with sourced information before you finalize your business plan.
• Projecting realistic sales can be difficult, but setting up a method for doing so early gives business plan writers a significant start toward completing their business plan. A well-developed sales model that takes advantage of the powers of electronic spreadsheets gives business plan writers the opportunity to relatively quickly and easily make necessary changes to their assumptions and overall estimates when needed.
• When you use the schedules provided on the spreadsheet templates, and any others that you add, you will be well on your way to developing the financial component of your business plan.

General Business Plan Format

Letter of transmittal.

A letter of transmittal is similar to the cover letter of a resume. The letter of transmittal should be tailored to the reader, clearly identifying the customized ask of the potential investor or lender. It should be short and succinct, delineating the ask (i.e. funding, specialized recruiting, purchasing a product or service, obtaining advice, etc.) within a few paragraphs. It should not summarize the business plan, as that is the job of the executive summary.

• Includes nice, catchy, professional, appropriate graphics to make it appealing for targeted readers

Executive Summary

• Can be longer than normal executive summaries—up to three pages
• Written after remainder of plan is complete
• Includes information relevant to targeted readers as this is the place where they are most likely to form their first impressions of the business idea and decide whether they wish to read the rest of the plan

Table of Contents

List of tables.

• References every table, figure, and appendix within the text of the plan so the relevance of each of these elements is clear.

List of Figures

Introduction.

• Indicates the purpose for the plan
• Appeals to targeted readers

Business Idea

• May include description of history behind the idea and the evolution of the business concept if relevant

Value Proposition

• Explains how your business idea solves a problem for your expected customers or otherwise should make them want to purchase your product or service instead of a competitor’s
• Outlines what you intend for the venture to be
• Inspires all members of the organization
• Helps stakeholders aspire to achieve greater things through the venture because of the general direction provided through the vision statement

After articulating a good vision, the business plan writer should consider what achieving the vision looks like. Many business plan writers write their vision and leave it at that. The problem with this approach is that they often then do not take the necessary steps to illustrate how the strategies they outline in their plan will move them toward achieving their vision. If they make this mistake, their strategies might indicate that they are fulfilling their current mission, but are not taking steps to move beyond that.

Vision statements should be clear with context throughout the business plan. For example, if the goal is to be the premier business operating in that industry in Saskatchewan, does that mean you have one location and are considered the best at what you do it even though you only have a small corner of the market, or does it mean that you have many locations across the province and enjoy a large market share?

• Should be very brief—a few sentences or a short paragraph
• Indicates what your organization does and why it exists—may describe the business strategy and philosophy
• Consists of five to ten short statements indicating the important values that will guide everything the business will do
• Outlines the personal commitments members of the organization must make, and what they should consider to be important
• Defines how people behave and interact with each other
• Should be reflected in all of the decisions outlined in the business plan, from hiring to promotions to location choices
• Helps the reader understand the type of culture and operating environment this business intends to develop

Major Goals

• Describes the major organizational goals
• Specific, Measurable, Action oriented, Realistic, and Timely [SMART]
• Realistic, Understandable, Measureable, Believable, and Achievable [RUMBA]
• Aligns with everything in plan
• Written, or re-written as the second last thing you do before finalizing your business plan by proofreading, polishing, and printing it (writing the Executive Summary is the final thing you should write)

Operating Environment

Trend analysis.

• However, consider whether this is the right place for this analysis: it may be better positioned, for example, in the Financial Plan section to provide context to the analysis of the critical success factors, or in the Marketing Plan to help the reader understand the basis for the sales projections.

Industry Analysis

• Includes an analysis of the industry in which this business will operate
• As above, consider whether this is the right place for this analysis: it may be better placed, for example, in the Marketing Plan to enhance the competitor analysis, or in the Financial plan to provide context to the industry standard ratios in the Investment Analysis section.

Of course, your trend analysis will also include a market-level analysis (using a set of questions, like those listed in Chapter 2) and a firm-level analysis (using tools like a SWOT Analysis / TOWS Matrix, various forms of financial analyses, a founder fit analysis, and so on), but those analyses are usually best placed in other sections of your plan to support the strategies and decisions you present there. The market-level analysis will inevitably fit in the Marketing Plan section, but the firm-level analysis might be spread across some or all of the Operating Plan, Human Resources Plan, Marketing Plan, and Financial Plan sections.

Operations Plan

• Given these constraints, what is your operating capacity (in terms of production, sales, etc.)?
• What is the work flow plan for your operation?
• What work will your company do and what work will you outsource?

Operations Timeline

• When will you make the preparations, such as registering the business name and purchasing equipment, to start the venture?
• When will you begin operations and make your first sales?
• When will other milestone events occur such as moving operations to a larger facility, offering a new product line, hiring new key employees, and beginning to sell products internationally?
• Sometimes it is useful to include a graphical timeline showing when these milestone events have occurred and are expected to occur.

Business Structure and other Set-up Elements

• Sole Proprietorship
• Partnership
• Limited Partnership
• Corporation
• Cooperative

Note: Your financial statements, risk management strategy, and other elements of your plan are affected by the type of legal structure you choose for your business. For example, all partnerships should have a clear agreement outlining the duties, expectations, and compensation of all partners as well as the process of dissolution. Spreadsheet templates are formatted for corporations and will need to be formatted for other forms of businesses.

• Zoning, equipment prices, suppliers, etc.
• Leasing terms, leasehold improvements, signage, pay deposits, etc.
• Getting business license, permits, etc.
• Setting up banking arrangements
• Setting up legal and accounting systems (or professionals)
• Ordering equipment, locks and keys, furniture, etc.
• Recruiting employees, setting up the payroll system and benefit programs, etc.
• Training employees
• Testing the products/services that will be offered
• Testing the systems for supply, sales, delivery, and other functions
• Creating graphics, logos, promotional methods, etc.
• Ordering business cards, letter head, etc.
• Setting up supplier agreements and outlining why those sellers are preferred
• Buying inventory, insurance, etc.
• Revising business plan
• And many more things, including, when possible, attracting purchased orders in advance of start-up through personal selling (by the owner, a paid sales force, independent representatives, or by selling through brokers wholesalers, catalogue houses, retailers), a promotional campaign, or other means

Note: As part of your business set-up, you need to determine what kinds of control systems you should have in place, establish necessary relationships with suppliers prior to your start-up, and generally deal with a list of issues like those mentioned above.

• What is required to start-up your business including the purchases and activities that must occur before you make your first sale?
• When identifying capital requirements for start-up, a distinction should be made between fixed capital requirements and working capital requirements.

Fixed Capital Requirements

• What fixed assets, including equipment and machinery, must be purchased so your venture can conduct its business?
• May also show the financing required, often in the form of longer-term loans

Working Capital Requirements

• What money is needed to operate the business (separately from the money needed to purchase fixed assets) including the money needed to purchase inventory and pay initial expenses?
• May also show the financing required. Working capital is usually financed with operating loans, trade credit, credit card debt, or other forms of shorter-term loans

Risk Management Strategies

• Enterprise – liability exposure for things like when someone accuses your employees or products you sell of injuring them
• Financial – securing loans when needed and otherwise having the right amount of money when you need it
• Operational – securing needed inventories, recruiting needed employees in tight labour markets, operating when customers you counted on not purchasing product as you had anticipated, managing theft, arson, and natural disasters like fires and floods, etc.
• Avoid – choose to avoid doing something, outsource, etc.
• Reduce – through training, assuming specific operational strategies, etc.
• Transfer – insure against, outsource, etc.
• Assume – self-insure, accept, etc.

Figure 8 – Risk Management Strategies (Illustration by Lee A. Swanson)

Operating Processes

• What operating processes will you apply?
• How will you ensure your cash is managed effectively?
• How will you schedule your employees?
• How will you manage your inventories?
• If you will have a workforce, how will you manage them?
• How will you bill out your employee time?
• How will you schedule work on your contracts?
• How you will manufacture your product (process flow, job shop, etc.?)
• How will you maintain quality?
• How will you institute and manage effective financial monitoring and control systems that provide needed information in a timely manner?
• How will you manage expansion?
• May include planned layouts for facilities
• What are your facility plans?
• Expressed as a set physical location
• Expressed as a set of requirements and characteristics
• How large will your facility be and why must it be this size?
• How much will it cost to buy or lease your facility?
• What utility, parking, and other costs must you pay for this facility?
• What expansion plans must be factored into the facility requirements?
• What transportation and storage issues must be addressed by facility decisions?
• What zoning and other legal issues must you deal with?
• What will be the layout for your facility and how will this best accommodate customer and employee requirements?

Organizational Structure

• May include information on Advisory Boards or Board of Directors from which the company will seek advice or guidance or direction
• May include an organizational chart
• Can be a nice lead-in to the Human Resources Plan

Human Resources Plan

• How do you describe your desired corporate culture?
• What are the key positions within your organization?
• How many employees will you have?
• What characteristics define your desired employees?
• What is your recruitment strategy? What processes will you apply to hire the employees you require?
• What is your leadership strategy and why have you chosen this approach?
• What performance appraisal and employee development methods will you use?
• What is your organizational structure and why is this the best way for your company to be organized?
• How will you pay each employee (wage, salary, commission, etc.)? How much will you pay each employee?
• What are your payroll costs, including benefits?
• What work will be outsourced and what work will be completed in-house?
• Have you shown and described an organizational chart?

Recruitment and Retention Strategies

• Includes how many employees are required at what times
• Estimates time required to recruit needed employees
• Employment advertisements
• Contracts with employment agency or search firms
• Travel and accommodations for potential employees to come for interviews
• Travel and accommodations for interviewers
• Facility, food, lost time, and other interviewing costs
• Relocation allowances for those hired including flights, moving companies, housing allowances, spousal employment assistance, etc.
• May include a schedule showing the costs of initial recruitment that then flows into your start-up expense schedules

Leadership and Management Strategies

• Outlines your leadership philosophy
• Explains why it is the most appropriate leadership approach for this venture
• What training is required because of existing rules and regulations?
• How will you ensure your employees are as capable as required?
• Health and safety (legislation, WHMIS, first aid, defibulators, etc.)
• Initial workplace orientation
• Financial systems
• Product features

Performance Appraisals

• Identifies how you will manage your performance appraisal systems

Health and Safety

• Notes any legal requirements (and also legal requirements for other issues that may be included in other parts of the plan)
• Identifies accreditation you might pursue, such as ISO 9000, and if so, evaluates the costs, benefits, and time frame
• Outlines training for employees, such as WHMIS training or machinery handling training

Compensation

• Always justifies your planned employee compensation methods and amounts
• Always includes all components of the compensation (CPP, EI, holiday pay, etc.)
• Identifies how you will ensure both internal and external equity in your pay systems
• Describes any incentive-based pay or profit sharing systems planned
• May include a schedule that shows the financial implications of your compensation strategy and supports the cash flow and income statements shown later

Key Personnel

• May include brief biographies of the key organizational people

Marketing Plan

• You must show evidence of having done proper research, both primary and secondary. If you make a statement of fact, you must back it up with properly referenced supporting evidence. If you indicate a claim is based on your own assumptions, you must back this up with a description as to how you came to the conclusion.
• It is a given that you must provide some assessment of the economic situation as it relates to your business. For example, you might conclude that the current economic crisis will reduce the potential to export your product and it may make it more difficult to acquire credit with which to operate your business. Of course, conclusions such as these should be matched with your assessment as to how your business will make the necessary adjustments to ensure it will thrive despite these challenges, or how it will take advantage of any opportunities your assessment uncovers.
• If you apply the Five Forces Model, do so in the way in which it was meant to be used to avoid significantly reducing its usefulness while also harming the viability of your industry analysis. This model is meant to be used to consider the entire industry, not a subcomponent of it (and it usually cannot be used to analyze a single organization).
• Your competitor analysis might fit within your assessment of the industry, or it might be best as a section within your marketing plan. Usually a fairly detailed description of your competitors is required, including an analysis of their strengths and weaknesses. In some cases, your business may have direct and indirect competitors to consider. Maintain credibility by demonstrating that you fully understand the competitive environment.
• Assessments of the economic conditions and the state of the industry appear incomplete without accompanying appraisals outlining the strategies the organization can/should employ to take advantage of these economic and industry situations. So, depending upon how you have organized your work, it is usually important to couple your appraisal of the economic and industry conditions with accompanying strategies for your venture. This shows the reader that you not only understand the operating environment, but that you have figured out how best to operate your business within that situation.
• Outlines an effective analysis of your venture (see the Organizational Analysis section below)

Market Analysis

• Usually contains customer profiles, constructed through primary and secondary research, for each market targeted
• Contains detailed information on the major product benefits you will deliver to the markets targeted
• Describes the methodology used and the relevant results from the primary market research completed
• If there was little primary research completed, justifies why it is acceptable to have done little of this kind of research and/or indicate what will be done and by when
• Includes a complete description of the secondary research conducted and the conclusions reached
• Define your target market in terms of identifiable entities sharing common characteristics. For example, it is not meaningful to indicate you are targeting Canadian universities. It is, however, useful to define your target market as Canadian university students between the ages of 18 and 25, or as information technology managers at Canadian universities, or as student leaders at Canadian universities. Your targeted customer should generally be able to make or significantly influence the buying decision.
• You must usually define your target market prior to describing your marketing mix, including your proposed product line. Sometimes the product descriptions in business plans seem to be at odds with the described target market characteristics. Ensure your defined target market aligns completely with your marketing mix (including product/service description, distribution channels, promotional methods, and pricing). For example, if the target market is defined as Canadian university students between the ages of 18 and 25, the product component of the marketing mix should clearly be something that appeals to this target market.
• Carefully choose how you will target potential customers. Should you target them based on their demographic characteristics, psychographic characteristics, or geographic location?
• You will need to access research to answer this question. Based on what you discover, you will need to figure out the optimum mix of pricing, distribution, promotions, and product decisions to best appeal to how your targeted customers make their buying decisions.

Competition

• However, this information might fit instead under the market analysis section.
• Describes all your direct competitors
• Describes all your indirect competitors
• If you include a competitor positioning map, insure that the x-axis and y-axis are meaningful. Often, competitor maps include quality and price as axes. Unless you can clearly articulate the distinction between high quality and low quality, it may be more valuable to have more meaningful axes or describe your value proposition relative to your competitors in the absence of a positioning map.

Figure 9 – Competitor Positioning Map (Illustration by Lee A. Swanson)

• You must clearly communicate the answers to these questions in your business plan in order to attract the needed support for your business. One caution is that it may sound appealing to claim you will provide a superior service to the existing competitors, but the only meaningful judge of your success in this regard will be customers. Although it is possible some of your competitors might be complacent in their current way of doing things, it is very unlikely that all your competitors provide an inferior service to that which you will be able to provide.

Marketing Strategy

• Covers all aspects of the marketing mix: your promotional decisions, product decisions, distribution decisions, and pricing decisions
• Outlines how you plan to influence your targeted customers to buy from you (your optimum marketing mix, and why is this one better than the alternatives)

Organizational Analysis

• Leads in to your marketing strategy or is positioned elsewhere depending upon how your business plan is best structured
• If doing so, ALWAYS ensure this analysis results in more than a simple list of internal strengths and weaknesses and external opportunities and threats. A SWOT analysis should always prove to the reader that there are organizational strategies in place to address each of the weaknesses and threats identified and to leverage each of the strengths and opportunities identified.
• An effective way to ensure an effective outcome to your SWOT Analysis is to apply a TOWS Matrix approach to develop strategies to take advantage of the identified strengths and opportunities while mitigating the weaknesses and threats. A TOWS Matrix evaluates each of the identified threats along with each of the weaknesses and then each of the strengths. It does the same with each of the identified opportunities. In this way strategies are developed by considering pairs of factors.
• The TOWS Matrix is a framework with which to help you organize your thoughts into strategies. Most often you would not label a section of your business plan as a TOWS Matrix because this would not add value for the reader. Instead, you should describe the resultant strategies—perhaps while indicating how they were derived from your assessment of the strengths, weaknesses, opportunities, and threats. For example, you could indicate that certain strategies were developed by considering how internal strengths could be employed toward mitigating external threats faced by the business.

Product Strategy

• If your product or service is standardized, you will need to compete on the basis of something else—like a more appealing price, having a superior location, better branding, or improved service. If you can differentiate your product or service, you might be able to compete on the basis of better quality, more features, appealing style, or something else. When describing your product, you should demonstrate that you understand this.

Pricing Strategy

• If you intend to accept payment by credit card (which is probably a necessity for most companies), you should be aware of the fee you are charged as a percentage of the value of each transaction. If you don’t account for this you risk overstating your actual revenues by perhaps one percent or more.
• Sales forecasts must be done on at least a monthly basis if you are using a projected cash flow statement. These must be accompanied by explanations designed to establish their credibility for readers of your business plan. Remember that many readers will initially assume your planned time frames are too long, your revenues are overstated, and you have underestimated your expenses. Well crafted explanations for all of these numbers will help establish credibility.

Distribution Strategy

• If you plan to use e-commerce, you should include all the costs associated with maintaining a website and accepting payments over the Internet.

Promotions Strategy

• As a new entrant into the market, must you attract your customers away from your competitors they currently buy from or will you be creating new customers for your product or service (i.e. not attracting customers away from your competitors)?
• If you are attracting customers away from competitors, how will these rivals respond to the threat you pose to them?
• If you intend to create new customers, how will you convince them to reallocate their dollars toward your product or service (and away from other things they want to purchase)?
• In what ways will you communicate with your targeted customers? When will you communicate with them? What specific messages do you plan to convey to them? How much will this promotions plan cost?
• If your entry into the market will not be a threat to direct competitors, it is likely you must convince potential customers to spend their money with you rather than on what they had previously earmarked those dollars toward. In your business plan you must demonstrate an awareness of these issues.
• Consider listing the promotional methods in rows on a spreadsheet with the columns representing weeks or months over probably about 18 months from the time of your first promotional expenditure. This can end up being a schedule that feeds the costs into your projected cash flow statement and from there into your projected income statements.
• If you phone or visit newspapers, radio stations, or television stations seeking advertising costs, you must go only after you have figured out details like on which days you would like to advertise, at what times on those days, whether you want your print advertisements in color, and what size of print advertisements you want.
• Carefully consider which promotional methods you will use. While using a medium like television may initially sound appealing, it is very expensive unless your ad runs during the non-prime times. If you think this type of medium might work for you, do a serious cost-benefit analysis to be sure.
• Some promotional plans are developed around newspaper ads, promotional pamphlets, printing business cards, and other more obvious mediums of promotion. Be certain to, include the costs of advertising in telephone directories, sponsoring a little league soccer team, producing personalized pens and other promotional client give-always, donating items to charity auctions, printing and mailing client Christmas cards, and doing the many things businesses find they do on-the-fly. Many businesses find it to be useful to join the local chamber of commerce and relevant trade organizations with which to network. Some find that setting a booth up at a trade fair helps launch their business.
• If you are concerned you might have missed some of these promotional expenses, or if you want to have a buffer in place in case you feel some of these opportunities are worthwhile when they arise, you should add some discretionary money to your promotional budget. A problem some companies get into is planning out their promotions in advance only to reallocate some of their newspaper advertisement money, for example, toward some of these other surprise purposes resulting in less newspaper advertising than had been intended.

Financial Plan

• Contains financial statements
• Various funding options and exit strategies for potential investors
• Business valuation (be cautious not to over value your business)
• Break-even analysis

Business Valuation

There are a multitude of sophisticated business valuation methodologies. A rule of thumb for business valuations is a multiple of its earnings. For example, if the chosen multiple is five and the business’ earnings before taxes are $55M, the business’ valuation would be approximately $275M.

Break-Even Analysis

Break-Even Point = FC/(P-VC)

• FC = Fixed Costs
• P = Unit Price
• VC = Variable Cost

Example: If the business’ total fixed costs are $1,000,000.00, it costs $5.00 to produce the widget, and the business sells the widget for $7.00, the break-even point is 500,000 widgets.

• You will most certainly need to make monthly cash flow projections from business inception to possibly three years out. Your projections will show the months in which the activities shown on your fixed capital and working capital schedules will occur. This is nearly the only way to clearly estimate your working capital needs and, specifically, important things like the times when you will need to draw on or can pay down your operating loans and the months when you will need to take out longer-term loans with which to purchase your fixed assets. Without a tool like this you will be severely handicapped when talking with bankers about your expected needs. They will want to know how large of a line of credit you will need and when you anticipate needing to borrow longer-term money. It is only through doing cash flow projections that you will be able to answer these questions. This information is also needed to determine things like the changes to your required loan payments and when you can take owner draws or pay dividends.
• Your projected cash flows are also used to develop your projected income statements and balance sheets.

Pro forma Cash Flow Statements

Pro forma income statements, pro forma balance sheets, investment analysis, projected financial ratios and industry standard ratios, critical success factors (sensitivity analysis), list of items a business may need to purchase.

• Business license
• Registration for name, etc.
• Domain name registration
• Initial product inventory
• All the little things like curtains/blinds, decorations, microwave for staff room, etc.
• All the things needed to run the business from day #1 (like cutlery, plates, cooking pots, table settings etc. for restaurants; like towels, soap, etc. for gyms; like equipment and so on for manufacturing and service places)
• Set-up and testing of new facilities—new factories and offices do not operate at peak efficiency for some time after start-up because it takes time for the new systems to kick into high gear
• Professional services needed
• Lawyer’s fees to make sure agreements are solid
• Graphic designer or design company needed to develop visuals
• Accounting firm needed to set up initial systems
• Insurance—maybe not a direct cost to this one to account for
• Accounting system software
• Computer, printer, other things needed like scanner
• Office furniture
• Initial office supplies—paper, pens, etc.
• Internet/wifi
• Microwave and coffee maker and similar supplies for staff room or coffee room
• Bank fees—business banking is normally not free—might also need to have business cheques

Customer Interaction

• Cash register
• Loyalty cards/system

Production/Operations

• Safety equipment (fire extinguishers, AED)
• Security systems
• Equipment maintenance
• Janitorial services and cleaning supplies
• Bathroom supplies—toilet paper, soap, towels
• Membership costs for various associations, including the local chamber of commerce, any professional associations for the relevant industry, etc.
• Subscriptions for things like important trade publications, etc.
• Shelving and storage systems
• Even when not full restaurant, operations like coffee shops still require equipment like dishwasher
• Safety—prior to start-up and ongoing and for new employees
• Ads, travel expenses—flights, hotels, taxi rides, meal allowances, etc.—to recruit people through interviews, meeting meals, set up with real estate agents, etc.
• Website development
• Costs for setting up and managing social media (can take a lot of an employee’s time)
• Grand opening costs
• If buying, include property taxes and all utilities in cash flows and income statement and include building maintenance and maybe build up a reserve fund to pay for things like future roof repairs and needed renovations and upgrades
• If renting/leasing, include rental/least cost and whatever utilities are not included in rental/lease payment

Renovations

• Construction
• Utility hookups
• Inspections
• Interior signage
• Fencing, parking lot, exterior lighting, other exterior things

Risk Management

• Insurance (need to choose the types needed)
• Training costs
• Things like snow removal, de-icing sidewalks, etc.

Chapter Summary

This chapter described the basic elements of a comprehensive business plan.

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

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8 Sections of Every Successful Business Plan Format

Have you ever had a bright idea in the middle of dinner so you wrote it down on a napkin so you don’t forget it? What happens when the waiter accidentally takes that napkin, it blows away, or you forget it in your pocket and you do the laundry?

Transfer your ideas from the restaurant napkin into a more complete business plan format. This will help you fully envision your business idea, help you secure funding and investors, and set you up on a path for business success.

There are many business plan formats you can use, but here the eight sections every business plan should have to maximize your success.

Part 1: Executive Summary

This is your “make it or break it” section. After reading this a person will decide if it’s worth their time to keep reading or just toss it in the trash. This section is generally 1-2 pages long and summaries the key points from your business plan. It should also clearly state the problem your business is solving, who your key client or customers are, what your solution or product is, and some brief financial projections to entice the reader to keep reading.

In addition to your executive summary, this section of your business plan format should also include your:

• Mission Statement : Write a brief (usually a few sentences) summary of the long term goals for your business. Your mission statement governs all facets of your company and is the main purpose of your business. Be bold and brave here and avoid outrageous claims or missions that are too close to your competitors’ mission statements
• Vision Statement : Write one or two sentences about what the world will be like when your mission is achieved. Think of the bigger impact you seek to have in the world.

Part 2: Company Overview

Even the most innovative products won’t sell themselves. The way you structure your business will contribute to the success of your company. In this section, you will provide an overview of your company structure.

This section will often contain four parts:

• Company Summary : Think of this like an elevator pitch. You could discuss progress on prototypes and your minimal viable products, a brief story of how/why your company was formed, and any other high-level metrics about your progress so far.
• Your Team : Introduce the key players on your team. This should include owners, senior management, and key personnel. It’s also a place to mention any gaps that you are currently seeking to fill. A brief discussion of compensation details is helpful too.
• Milestones : Even if your company is new, you have milestones to note. That may include incorporation details, signing of property leases, ordering prototypes, or bringing in new investors.
• Critical Success Factors : This is where you will set some critical success factors (or goals) for the business. Unlike traditional goals, these do not have to be measurable. They may relate to client satisfaction, customer service standards, number of products sold, number of new hires every quarter, or streamlining fulfillment services.

Part 3: The Business Opportunity

This is the meat and bones of your business. This is where you talk about your specific products and services and the problems they solve for your target market.

This section is often divided into two sections:

• The Problem : The best businesses sell a product people actually need. In 2018 if you launched a business that sold face masks you probably struggled. But if you launched a face mask manufacturing business in 2020, your sales probably skyrocketed, because there was a clear, urgent need for the product. Use this section to talk about the pain points your target market has (as they relate to your offering).
• The Solution : This is where you get to talk about your offer. Talk about the features and benefits of that offer as they relate to meeting the pain points of your target market, and as they differentiate you from similar products on the market already.

Part 4: Industry Analysis

After you’ve looked at the pain points of your target market, it’s time to make sure that you’re targeting the right market and that the market isn’t oversaturated.

When you write your industry analysis section be sure to include:

• Total Available Market : Is your market targeted only at a handful of potential customers in a small geographical area? It’s important to know this because if your market of potential customers is small and there are already several competitors targeting them, you’ll need to find something new you can bring to the table to win these customers or else consider changing your target market.
• Market Trends and Growth Rate : Are people going to get tired of your products like they do with those fad diets? Talk to a market analyst to get insight into the future of the market for your product. Ideally, you’d want to see market trends in your favour.
• Key Competitors : Do some research to uncover who your main competitors are. Look at what they are already doing well and where there is room for you to do better than them. This information can help you while structuring your business, refining your products and services, and creating more effective marketing campaigns and strategies.

Part 5: Your Business Model

Two companies can sell the “same” product, but one can be profitable and the other could fail. Why? The way they structure their business may contribute to their success or failure.

In your business plan, talk about these 3 components of your business model:

• Your Unique Selling Point : What makes your product or how you run your business unique. This will be key to designing your product to be memorable and strategically plan your marketing to stand out in saturated markets.
• Revenue Streams : The COVID-19 pandemic taught businesses the value of multiple revenue streams. For your business plan, consider the different ways you will bring in cash. This could include product or service sales, selling tickets to events and workshops, membership programs, selling online content online, referral programs, or business partnerships that bring in new business.
• Business Pipeline : Most customers are not going to find your company at noon and buy your $997 product by dinner. There is a process to making a sale and it’s often referred to as a business pipeline or a sales funnel. Each step of the pipeline will lead people through various activities to gauge their engagement and potential for a sale. Categorizing and tracking prospects as they go through your pipeline can tell you a lot about the health of your business and the flow of leads for your business.

Part 6: Your Marketing Strategy

Another key component of your business plan format includes outlining your marketing strategy and plans. This could get quite in-depth depending on what marketing and advertising avenues you choose to use.

For the purposes of summarizing your marketing strategy in your business plan, consider including a summary of these key areas:

• Strengths – What are you doing better than the competition?
• Weaknesses – Where are your competitors doing better than you?
• Opportunities – What opportunities are open to you, what trends can you take advantage of, and how can you turn your strengths into opportunities.
• Threats – What could harm your business, how could your competition harm you, how could your weaknesses harm you.
• Target Audience : Use this section to go into more detail about your target customers as it relates to your product or service.
• Key Channels : Being on every single social media channel and advertising in every newspaper and magazine probably isn’t the best use of your marketing budget. Focus on channels where your target audience is likely to frequent and list them along with a high-level strategy for each one.
• Sales Plan : How do you plan to sell your product? Are you going to have a sales team, seek referral partners, or sell in other ways? Outline how you will bring in sales in this section.
• Key Performance Indicators (KPIs) : To track your progress and success, determine what your KPIs are. These are measurable goals and metrics that could include things like downloads of a free PDF, number of walk-in customers to your store, percentage of repeat customers, number or value of monthly sales.

Part 7: Investment Proposal

If your business plan will be used to secure loan, grant, or investor funding, this section is extremely critical. It’s basically your financial ask.

Be as detailed and specific as you can and include:

• Investment Proposal : Clearly outline your ask of the lender or investor. State if you are offering a stake in the company, are expecting the investor to be a silent partner, and what involvement the investor will plan (if any) in the company. Set clear expectations.
• Capital Allocations: Outline specifically how the funds will be used in the business. This may include allocating funds for R&D, inventory purchases, rent or property acquisitions, staff wages, marketing, investments.

Part 8: Financial Projections

A successful business needs to be profitable. All successful business plan formats include a financial projections section.

This section of your business plan will often include:

• Opening Balance Sheet : A balance sheet is a spreadsheet with 2 columns: Assets (left) and liabilities and owner’s equity (right).
• Income Statement : This summarizes your income for the last 12 months in business or if you are a start-up, as much as you can to-date. Your summary should include gross revenue, gross profits, operating profits, profits before tax, and net profits.
• Business Ratios : These determine the health of your company. You may choose to report debt-to-asset ratios, debt-to-equity ratio, cash ratio, working capital ratio, net profit margin, return on investment, and return on equity.

Customizing your business plan format

A business plan is not a one-size-fits-all report. You will find many sections are similar for nearly every business, but you will likely need to customize the content based on your stage of business and your reason for writing a business plan.

To give you more samples of ideal business plan formats, download our free business plan samples . We look forward to helping you create the best business plan for your business.

How can we help you?

Get in touch with us or visit our office

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The Top 4 Types of Business Plans

When it comes to writing a business plan, one style does not fit all.

Different industries require different plans. A retailer isn’t much like a manufacturer, and a professional services firm isn’t much like a fast-food restaurant. Each requires certain critical components for success—components that may be irrelevant or even completely absent in the operations of another type of firm.

For example, inventory is a key concern for both retailers and manufacturers. Look at Walmart, one of the great all-time success stories in retail. Expert, innovative management of inventory is an integral part of its success. Any business plan that purported to describe the important elements of these businesses would have had to devote considerable space to telling how the managers planned to manage inventory.

Contrast that with a professional services firm, such as a management consultant. A consultant has no inventory whatsoever. Their offerings consist entirely of the management analysis and advice they can provide. They don’t have to pay now for goods to be sold later or lay out cash to store products for eventual sale. The management consultant’s business plan, therefore, wouldn’t have a section on inventory or its management, control, and reduction.

This is one obvious example of the differences among plans for different industries. Sometimes, even companies in more closely related industries have significantly different business plans. For instance, the business plan for a fine French restaurant might need a section detailing how the management intends to attract and retain a distinguished chef. At a restaurant catering to the downtown lunchtime crowd, you might devote much plan space to the critical concern of location and quick turnaround of diners with very little about the chef.

You want your plan to present yourself and your business in the best, most accurate light. That’s true no matter what you intend to use your plan for, whether it’s destined for presentation at a venture capital conference or will never leave your office or be seen outside internal strategy sessions.

When you select clothing for a momentous occasion, odds are you try to pick items that will play up your best features. Think about your plan the same way. You want to reveal any positives your business may have and ensure they receive due consideration.

Business plans can be divided roughly into four distinct types: Mini-plans, presentation plans or decks, working plans, and what-if plans. Each plan requires different amounts of labor, not always with proportionately different results. A more elaborate plan is not guaranteed to be superior to an abbreviated one. Success depends on various factors and whether the right plan is used in the right setting. For example, a new hire may not want to read the same elaborate version that might be important to a potential investor.

The Mini-Plan

The mini-plan is preferred by many recipients because they can read it or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights while telling the same story. For a small business venture, it’s typically all that you need. For a more complex business, you may need a longer version.

The Presentation Plan

PowerPoint presentations changed how many, if not most, plans are presented. And while the plan is shorter than its predecessors, it’s not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of your business. However, presenting your plan as a deck can be very powerful. Readers of a plan can’t always capture your passion for the business, nor can they ask questions when you finish. In 20 minutes, you can cover all the key points and tell your story from concept and mission statement through financial forecasts.

Remember to keep your graphics uncluttered and to make comments to accentuate your ideas rather than simply reading what is in front of your audience. While a presentation plan is concise, don’t be fooled. It takes plenty of planning. The pertinent questions—Who? What? Where? Why? When? and How?—need to be answered.

The Working Plan

A working plan is a tool to be used to operate your business. It is long on detail but cshort on presentation. As with a mini-plan, you probably can afford a somewhat higher degree of candor and informality when preparing a working plan.

In a presentation plan, you might describe a rival as “competing primarily on a price basis.” But in a working plan, your comment about the same competitor might be, “When is Jones ever going to stop this insane price-cutting?”

A plan intended strictly for internal use may also omit some elements that you need not explain to yourself. Likewise, you probably don’t need to include an appendix with resumes of key executives. Product photos are also unnecessary. Internal policy considerations may guide the decision about including or excluding certain information in a working plan. Many entrepreneurs are sensitive about employees knowing the precise salary the owner takes home from the business.

To the extent such information can be left out of a working plan without compromising its utility, you can feel free to protect your privacy. This document is like an old pair of khakis you wear to the office on Saturdays or that one ancient delivery truck that never seems to break down. It’s there to be used, not admired.

The What-If Plan

When you face unusual circumstances, you need a variant on the working plan. For example, prepare a contingency plan when you are seeking bank financing. A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training, and reduce duplicative efforts? Such what-if planning doesn’t have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel, and other variables so you can make good decisions.

What sets these kinds of plans apart from the working and presentation plans is that they don’t necessarily describe how you will run the business. They are essentially more like an addendum to your actual business plan. If you decide to acquire that competitor or grow dramatically, you will want to incorporate some of the thinking already invested in these special purpose plans into your primary business plan.

If you are looking for extra guidance with an industry-specific business plan, you can visit Bplans.com to access over 500 free real-world business plan examples from a wide variety of industries to guide you through writing your own plan. If you’re looking for an intuitive tool that walks you through the plan writing process, you can try LivePlan. It includes many of these SBA-approved business plan examples and is especially useful when applying for a bank loan or outside investment.

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» Business Administration (B.S.): Suggested 4-year Plan for 2023-24

This 4-year plan is for first-year students entering Chapman during the 2023-24 Academic Year .

If you entered Chapman in a previous academic year, you should work with your advisor and use the Catalog for your year of entry to plan your course schedule.

Preparing for your Chapman Experience

Four-year Plans only include major-specific courses . In addition to those classes, you will take General Education courses and courses related to your chosen Exploration Focus (e.g., a minor, double major, Themed Inquiry or the Honors Program), which you will learn more about through the advising process. Just know: There are infinite possibilities .

How to Use your 4-year Plan

• This is a suggested 4-year plan for your major and not meant to replace regular academic advising.
• The plan is flexible and can be changed to accommodate studying abroad, a second major/minor(s) or AP/IB credits.
• You should work with an academic advisor to develop a plan that meets your interests and goals.
• You must earn a minimum of 120 credits to graduate and 61-64 major-specific credits to earn a B.S. in Business Administration.
• Transfer students and those looking to add B.S. in Business Administration as a second major should contact the program advisor for degree planning.
• If you have any questions, please contact [email protected] .

Suggested 4-year Plan

• We encourage you to select your General Education (GE) and minor/second major/Themed Inquiry/Honors program around the plan below. Once you fill your GE classes around your major classes, you will have a better idea of space remaining each semester when choosing your Exploration Focus.
• To be enrolled full time, you must take at least 12 credits a semester .
• In order to graduate within 4 years , we recommend you take 30 credits a year .

Fall Semester (6 credits for major)

• MATH 109 - Calculus with Applications in Business and Social Science (3 credits)*
• ECON 200 - Principles of Microeconomics (3 credits)

Spring Semester (9 credits for major)

• ECON 201 - Principles of Macroeconomics (3 credits)
• ACTG 210 - Introduction to Financial Accounting (3 credits)
• COM 219 - Business and Professional Communication for Business Majors (3 credits)

If you need to take MATH 100 & MATH 100L, you can visit the Argyros Advising Office to reconfigure your plan. Also, you may substitute MATH 110 Single Variable Calculus I (3 credits) for MATH 109 Calculus with Applications in Business and Social Science (3 credits).

Fall Semester (7 credits for major)

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The Leading Source of Insights On Business Model Strategy & Tech Business Models

Business Model Vs. Business Plan: When And How To Use Them

A business model is a holistic framework to design how a business might create and capture value. A business plan is a document explaining how a business might become viable. Where a business model is made to be tested, a business plan’s primary goal is to gain investments. 

Table of Contents

The key difference between a business model and a business plan

It is easy to confuse a business model with a business plan . Yet those tools have specific functions, in some cases similar, in most other cases completely different.

Indeed, while a business model is a framework to understand the way an organization works, a business plan is a document that helps to understand the future strategy of an organization and its expected performance in a three to five years time frame.

While in some cases, a business plan can also serve the purpose of better understanding your own business, and in some other cases, the business model can be comprised within the business plan .

Indeed, as an investor, I want to know exactly how your business works or how you think it will work in the future. Keeping a distinction between those tools is critical.

In particular, I want to focus on the critical difference from two perspectives:

• external (investors, stakeholders, and other parties)
• internal (owners, top management, shareholders)

External:  business plan or business model?

If you’re looking for a tool whose aim is to show how attractive your business is, a business plan is the most suited for that.

Indeed, suppose you want to attract investors and grow your business via external resources.

In that case, a detailed business plan is the most effective way to allow those investors to understand the several parts of your business.

Also, the business plan is a way to show where you see the business in the future. Indeed, one key ingredient of a business plan is a set of projections for three-five years.

While investors will also want to know what kind of business model you want to build (depending on whether or not your business model will be scalable will make or break the interests of investors).

The primary tool to show where your business will be in the future and to address the kind of resources needed to get there is the business plan. In short, for external subjects to know about your business and invest in it, the business plan is the best tool.

Internal: business plan or business model?

Among the tools to leverage on to understand your business, a business model is one of the most effective.

Indeed, the business model is a framework (usually a one-page) that allows you to understand how your business works from several perspectives.

Depending on what kind of business you’re trying to build or where you want to steer your organization, you might want to look at a few tools, such as:

• FourWeekMBA Busines Model 
• Business Model Canvas
• Blitzscaling Business Model Innovation Canvas
• Value Proposition Canvas
• Lean Startup Canvas

Each of those tools will help you to build a different kind of business.

For instance, in a start-up phase, the business model canvas and the lean startup canvas are the most suited.

In a phase of scale-up, the lean startup is better suited than the business model canvas.

Instead, if you’re trying to blitzscale your business , the Blitzscaling Canvas will be your best companion.

In conclusion, if you’re looking for a way to understand better your business in the present or how to design a business model that can help you grow, the business model frameworks are the most suited to the business plan .

In some cases, though, a business plan might also work for that purpose, especially a one-page business plan.

Key takeaway and resources

A business plan is a tool that is most suited to shot external stakeholders where your business is headed and why they should finance or invest in its future.

The business model instead, is a framework that helps you assess how your business works from several angles and the kind of actions you can take in the now.

Below you can find an example on how to build a one-page business plan as well:

Key Highlights:

• Business Model vs. Business Plan: A business model is a comprehensive framework for creating and capturing value in a business, while a business plan is a document that outlines how a business can become viable. The primary goal of a business plan is often to secure investments.
• Key Difference: The main distinction between a business model and a business plan lies in their functions. A business model explains how an organization operates, while a business plan focuses on the future strategy and expected performance over three to five years.
• External Perspective: For external stakeholders like investors and partners, a detailed business plan is essential. It helps them understand various aspects of the business and provides projections for the future. Investors also want to know about the scalability of the business model.
• Internal Perspective: When looking to understand the current state of your business or design a business model, tools like the Business Model Canvas, Lean Startup Canvas, and others are more effective. These tools offer insights into how the business operates and can guide decision-making.
• Choosing the Right Tool: The choice between a business model and a business plan depends on your goals and the stage of your business. For startups, the Lean Startup Canvas and Business Model Canvas are useful. In a scale-up phase, Lean Startup tools might be more suitable, and for rapid growth , the Blitzscaling Canvas can be valuable.
• Key Takeaway: A business plan is best suited for presenting your business to external stakeholders and securing financing, while a business model is a framework for understanding your business from multiple angles and making informed decisions in the present.
• Resources: Various tools, such as the Business Model Canvas and Lean Startup Canvas, can help you analyze and improve your business model. A one-page business plan can also be effective in clarifying your business’s core problem, target customers, and distribution channels .

Case Studies

Case Study 1: Nike – Business Model vs. Business Plan

• Nike utilizes its business model to create, deliver, and capture value. It focuses on the core components of a business’s operations and revenue generation.
• When considering external stakeholders like investors, Nike might develop a detailed business plan to showcase its future strategies and financial projections.

Case Study 2: Coca-Cola – Business Model vs. Business Plan

• Coca-Cola employs digital marketing channels like social media and email marketing to better communicate its products and engage with consumers.
• Coca-Cola may use a business model framework to understand how it creates and delivers value through marketing , while a business plan could be used to outline future marketing strategies and financial goals.

Case Study 3: Amazon – Business Model vs. Business Plan

• Amazon uses technology not only for its e-commerce platform but also integrates customer feedback into its product design, enhancing its business model .
• In the process of attracting investors or lenders, Amazon might create a comprehensive business plan to demonstrate its long-term growth strategy , financial viability, and risk mitigation.

Case Study 4: Tesla – Business Model vs. Business Plan

• Tesla leverages technology to shape its electric vehicles, constantly improving features and performance based on user feedback and data collected from their vehicles.
• Tesla could use a business model to understand how it delivers value through innovation and customer feedback. Simultaneously, a business plan might outline its future growth strategies and financial projections.

Case Study 5: Airbnb – Business Model vs. Business Plan

• Airbnb operates a two-sided platform that connects hosts and travelers, creating interactions that generate value for both parties.
• To secure investments for expansion or growth , Airbnb may develop a business plan that outlines its financial outlook, expansion strategies, and risk management, while its business model emphasizes how interactions drive its value.

Case Study 6: Uber – Business Model vs. Business Plan

• Uber’s platform connects riders and drivers, creating a multi-sided marketplace driven by network effects .
• Uber could use a business model to understand the dynamics of its marketplace. When seeking investors or funding, it might present a comprehensive business plan highlighting its growth potential, financial projections, and strategies to address market challenges.

Case Study 7: Apple – Business Ecosystem vs. Business Plan

• Apple’s App Store has evolved into a thriving business ecosystem that benefits both the company and app developers.
• While the business ecosystem concept is central to Apple’s strategy , the company may use a business plan to outline its future ecosystem development, financial projections, and governance design for potential investors.

Case Study 8: Ethereum – Business Ecosystem vs. Business Plan

• Ethereum’s blockchain platform facilitates the creation of decentralized applications (dApps) and smart contracts within a larger business ecosystem .
• Ethereum might use a business model to understand how its ecosystem creates and captures value. For attracting investors or funding, a business plan could illustrate its growth strategies, financial outlook, and governance design.

Key Difference – Business Model vs. Business Plan

• A business model is a strategic framework for understanding how a business creates, delivers, and captures value. It focuses on the core components of a business’s operations and revenue generation.
• A business plan is a comprehensive document outlining a company’s goals, strategies, financial projections, and operational details, often used for fundraising and as a roadmap for the business.

Choosing the Right Tool

• The choice between a business model and a business plan depends on the goals and stage of the business. While a business model helps understand the present and guide innovation , a business plan is primarily for external stakeholders, showcasing future strategies and financial projections.

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Biden to discuss new student loan forgiveness plan in Wisconsin on Monday: Sources

President Joe Biden is expected to discuss the framework for a new major student loan forgiveness plan on Monday during a trip to Wisconsin, sources familiar with the White House's plans confirm to ABC News.

Biden is scheduled to travel on Monday to Madison, home to a major university and in a crucial battleground state.

A proposed rule that could impact millions of borrowers may be close to being finalized, sources said. The White House would not yet confirm any details.

The latest proposal was first reported by The Wall Street Journal on Friday.

Sources told ABC News that unlike the sweeping student loan forgiveness plan that was struck down by the Supreme Court last year, this new one will require borrowers to fall into specific categories to get relief, such as possible financial hardship or holding debt that because of interest is now bigger than the amount originally borrowed.

That distinction -- a more targeted approach to debt cancellation -- is part of what makes the White House confident in their legal footing this time should a new proposal be challenged as well, sources said.

The Department of Education has been engaged in recent months in public listening sessions with stakeholders -- a move considered best practice and a way to firm up justification and standing for new regulations.

The Supreme Court struck down the Biden administration's initial loan forgiveness plan in June 2023. In a 6-3 decision, the court ruled the Department of Education exceeded its authority when it moved to wipe out more than $400 billion in federal student loan debt.

The program would have forgiven up to $10,000 in debt for borrowers making less than $125,000 a year. Borrowers who took out Pell Grants to pay for college could have had up to $20,000 canceled.

Forty-three million Americans would have qualified for the program, and the Education Department had already approved applications for 16 million borrowers before halting due to legal challenges.

Biden, who made tackling student loan debt a key campaign pledge, said following the ruling that "the fight is not over."

Money blog: Sales of viral Prime drink sink - as one supermarket 'sells at discount price'

Sales of the viral Prime sports drinks have fallen sharply in 2024 and are down by more than half year on year. Read this and the rest of today's personal finance news in the Money blog - and comment on any of the stories we're covering, or leave a Money Problem, in the form below.

Monday 8 April 2024 22:10, UK

• Pensions rising 8.5% today - as benefits go up 6.7%
• Money Problem : The monthly charge on my leasehold flat has gone up by more than £60 a month - what are my rights?
• Sales of viral Prime drinks sink - as one supermarket 'sells at discount price'
• London restaurant chain ditches tips - just before new legislation saying staff must get 100%
• You may be buying herbs and spices all wrong - and spending six times more than you need to
• The price of getting divorced

Ask a question or make a comment

Higher interest rates mean more people are opting to take out out longer mortgages in order to afford their repayments.

If you've recently agreed a mortgage deal that will take you past retirement age, we'd like to hear from you.

Are you worried, or do you feel it doesn't matter? Have you had to change any of your life plans to take on the mortgage?

Let us know by sending us a message via our  Whatsapp here.

More products were available to mortgage borrowers at the start of the month than at any point in the last 16 years, new figures show.

Moneyfacts said 6,307 mortgage options were on offer for house buyers, including fixed and variable deals. It was the highest number recorded since February 2008, when 6,760 products were available.

Some 335 of the deals were 5% mortgages - the biggest choice in nearly two years.

Meanwhile, the number of options for people with 10% deposits rose to the highest level since March 2020.

Santander UK , Britain's fifth-biggest high street bank, is cancelling its membership of a key lending standards body because of the duplication of regulatory standards to which the industry is required to adhere.

Sky News has learnt that the Spanish-owned bank served notice last week of its intention to quit the Lending Standards Board, citing the establishment of the City watchdog's Consumer Duty and the imminent implementation of new fraud reimbursement rules overseen by the Payment Systems Regulator.

Read City editor Mark Kleinman's story here ...

Some people eager to maximise their 2024-25 ISA allowance were moving money around just minutes into the new tax year, according to Bestinvest.

The investment platform said the latest ISA subscription went through at 11.55pm on 5 April - while the first came in at three minutes past midnight on 6 April.

Bestinvest said it was just 52 minutes past midnight when the first client maximised their £20,000 ISA allowance.

Aldi is now Britain's third-biggest supermarket after kicking Asda from the bronze medal spot, according to one set of industry figures.

NIQ data shows Asda's growth has slowed, with sales up just 0.8% in the past three months - the worst performance of any big-name retailer.

Its market share has also dropped below Aldi's, with Asda making up 11.7% of the grocery market in the 12 weeks to 23 March, compared with 12.2% for Aldi.

The cost of living crisis has seen major supermarkets in the UK battle to market themselves as the best value for money for shoppers.

Aldi's UK operation reported a 26% rise in sales in December compared to the previous year.

Ex-Lidl UK boss Ronny Gottschlich said previously that he thinks the combined share of the two budget supermarkets will overtake Tesco "by 2027 at the latest".

Here's the latest Which? survey on the UK's cheapest supermarket for a basket...

Sales of the viral Prime sports drinks have fallen sharply since the start of 2024 and are down by more than half year on year, according to a report.

Chaos broke out in UK supermarkets at the end of 2022 following the release of the drinks, with some being re-sold by shoppers at inflated prices due to intense demand.

Prime, founded by KSI and fellow YouTuber Logan Paul, was the fastest growing food and drink brand in 2023, according to The Grocer.

But a new  report by the grocery news outlet cites NIQ data which shows that sales of Prime in the first quarter of 2024 sat at just £12.8m - less than half the £26.8m reported over the same period last year.

A picture emerged on social media last month of bottles of Prime being sold for just 31p in Tesco - although it's worth pointing out that the supermarket giant had previously been reluctant to stock them and other companies are still selling them at around the £2 mark.

You no longer have to pay a fee to sell pre-owned clothing on eBay.

The online marketplace says it has scrapped the charge for private sellers in the UK in a bid to prevent items from ending up in landfill.

In reality, eBay is trying to compete with popular apps such as Vinted and Depop. These apps tend to attract a younger market - which eBay is eager to infiltrate.

Under its change, all items are covered except hats, footwear, watches, bags and jewellery, which still incur a fee.

Items listed before today will benefit from the change.

Kirsty Keoghan, general manager of global fashion for eBay, said: "Free fashion selling has come at the right time for a nation sitting on billions of pounds worth of unwanted clothes.

"We know selling clothes can sometimes feel like a chore, so free selling and new updates like new AI-powered listings will help more of us to sell clothes easily, putting more cash in pockets."

By Sarah Taaffe-Maguire , business reporter

The price of oil is hovering around $90 a barrel, levels last seen six months ago in the wake of the Hamas attacks on 7 October.

It's a slight fall from the $91.50 recorded on Friday but still not good news for motorists and for most of the economy, which is largely reliant on oil to fuel production. 

The FTSE 100 index of most valuable companies on the London Stock Exchange is down 0.03% this morning with Marks and Spencer experiencing the biggest fall. 

Its share price is down 2.45%, followed by the London Stock Exchange Group (LSEG) itself. 

Following stories of a shareholder revolt in LSEG, as its chief executive David Schwimmer is in line for a pay rise from £6.3m to £13.2m, the share price fell 1.9%. 

A pound buys $1.2616 and €1.656.

Nail salon prices across the UK are going up today as thousands of workers band together.

The Nail Tech Org (NTO) says its member nail technicians make on average just under £7 per hour, well below the minimum wage of £11.44 - and so they're collectively coming together to raise prices to help increase pay.

Lauren Pritchard, owner of The Beauty Bar in Birmingham, told Sky News the cost of opening her salon on a day-to-day basis has doubled in the last four years because of increased energy and product costs.

She says she has already lost some clients after announcing her price increase of £2-3 per service.

"It's always going to be a bit scary," she said, but increasing her prices at the same time as others makes it easier.

"It's us coming together to encourage each other rather than pitching us against each other by undercutting prices."

The state pension rises by 8.5% today.

The "new" state pension, for those reaching state pension age on or after 6 April 2016, will rise to £221.20 a week - up from £203.85.

The "basic" state pension, for those who took it out prior to April 2016, is rising to £169.50 a week. These people may also get SERPs (State Earnings Related Pension Scheme), which goes up by 6.7%.

Both groups may get more or less depending on individual circumstances. 

While the rise is welcome news for some 12 million pensioners, we reported last week that 650,000 additional pensioners could be dragged into paying income tax for the first time.

This is down to state pensions rising in line with inflation while the tax threshold has been frozen at £12,570 (and will remain so until 2028).

The 8.5% increase in the "new" state pension this week will take it to £11,502. While welcome, it means any pensioner with an additional income over £1,068 per year - for example from a private pension - will trigger a tax bill.

Means-tested benefits will also increase today - along with other benefits increases this weekend and at the start of the month. Here's a round up...

• Child benefit

The amount people can earn before child benefit is reduced or taken away is increasing.

At the moment, people lose 1% of the benefit for every £100 they earn over £50,000. At £60,000, the benefit is cut completely.

From this month, the benefit won't be reduced until one parent earns more than £60,000. And it will only go completely at £80,000.

Benefits and tax credits that are linked to inflation will rise by 6.7% this month.

That was the level CPI in September.

These benefits have to go up 6.7% by law:

• Personal independence payment (PIP)
• Disability living allowance
• Attendance allowance
• Incapacity benefit
• Severe disablement allowance
• Industrial injuries benefit
• Carer's allowance
• Additional State Pension
• Guardian's allowance

The government also pledged the same raise for benefits including:

• Universal credit
• Contributory employment and support allowance
• Contributory jobseeker's allowance
• Statutory maternity/paternity pay and maternity allowance
• Income-based jobseeker's allowance (JSA)
• Income-related employment and support allowance (ESA)
• Income support
• Working tax credit
• Child tax credit

From April universal credit rates are:

• Single and under 25 - £311.68
• Single and 25 or over - £393.45
• Live with partner, both under 25 - £489.23 (for you both)
• Live with partner, either of you are 25 or over £617.60 (for you both)

Every Monday we put your financial dilemmas or consumer disputes to industry experts. You can find out how to submit yours at the bottom of this post.

This week, Sky News reader SBwrry  asks...

"I own a flat in a block where the developer contracted a company to manage the communal facilities. The first year the monthly charge was £149 per month. From April they will increase the monthly charge to £216 per month. What rights do I have to challenge this increase?"

Mark Chick, senior partner at Bishop and Sewell law firm, picks up the first half of this one...

Firstly, we need to understand whether this is a shared ownership property or not. 

However, assuming the lease has a service charge, and that the common facilities form part of the costs which are recoverable under the terms of the lease, then the leaseholder would have the right to challenge the costs in the first-tier tribunal.

In accordance with the provisions of the Housing Act 1985, service charges must be "reasonable" and you have the right to bring a challenge.

In this situation, the leaseholder would need to pay their own costs of going to tribunal and therefore it may make sense to act collectively; if the tribunal did order the service charge is "unreasonable" and should be reduced, this should benefit all those that pay it.

But the first step is to write to the freeholder or manager querying why the increase has been levied, and also to review carefully the provisions of the lease to ensure these are costs which they can legitimately pass on to you as the flat owners.

The Money team's Katie Williams has looked at another avenue you could explore...

Leaseholders in a block of flats can take over management of the building under a process introduced in 2002 called right to manage (RTM).

The leaseholders have to set up a RTM company in order to be able to take over management duties. It can be done without the permission of the landlord, but they will have a right to be a part of the company. They'll also have the option to dispute the claim if they think the RTM company isn't entitled to manage the building.

The RTM process can be used to take back control of a poorly managed block, but flat owners don't need to prove mismanagement to exercise their right.

There are some conditions that have to be met before management can be taken over:

• The building must be self contained and include at least two flats;
• At least two-thirds of the flats in the building have to be leasehold;
• At least 75% of the building must be residential;
• At least half the leaseholders must participate, or all if the building consists of two flats only.

The advantage of right to manage is that you have greater control over the cost of running the building which could lead to big savings - but a potential disadvantage is that it could be time-consuming and stressful in the long run.

This feature is not intended as financial advice - the aim is to give an overview of the things you should think about. Submit your dilemma or consumer dispute, leaving your name and where in the country you are, in the form above or by emailing [email protected] with the subject line "Money blog". Alternatively, WhatsApp us  here .

If you regularly buy herbs and spices from the supermarket, it could be that you're doing it all wrong.

These items have their own section, usually somewhere near the stock cubes and gravy.

If that's where you pick up your cumin or chilli flakes, for example, you should consider having a look down the world aisle instead.

They're usually much, much cheaper per 10g, and although you'll likely have to buy a slightly bigger packet, you're getting much better value for money.

The Money team popped into a Tesco Extra to have a look - though you'll find this applies to all the big supermarkets where they have a world food aisle.

• East End ground cumin - 13p for 10g v Tesco own brand 23.3p
• East End chilli flakes - 7.6p for 10g v Tesco own brand 35.7p
• East End cinnamon sticks - 13p for 10g v Tesco own brand 83.3p
• Rajah chilli powder - 5p per 10g v Tesco own brand 20p
• Rajah turmeric - 6p per 10g v Tesco own brand 22.2p
• East End fennel seeds - 13p per 10g v Tesco own brand 27.8p
• Natco ground coriander - 14.5p per 10g v Tesco own brand 27.8
• East End garlic powder - 13p per 10g v Tesco own brand 22.2p

And it's not just herbs and spices.

For example, we saw desiccated coconut at £4.25 per kg down the world aisle, compared with £7.25 for Tesco's own brand.

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25 million student loan borrowers could see their balances shrink under Biden’s new forgiveness plan

President Joe Biden and his administration are moving forward with plans to provide student debt relief to as many people as possible.

The administration announced Monday the details of its new plan to reduce student debt balances for millions of borrowers. The proposed regulations — which were drafted as part of the months-long negotiated rulemaking process — feature several different ways for borrowers to see their debt balances reduced, if not eliminated entirely. 

The provisions of the plan include forgiving excessive interest that has accrued, discharging balances that have been in repayment for 20 years or more and relief for borrowers who attended now-closed or insolvent institutions.

"[The] plan is focused on the reasons that people are struggling with their student loan debt," James Kvaal, Under Secretary of Education, told CNBC Make It. 

"People who are upside down on their student loans because interest has racked up faster than they could pay it, people who have been making payments on their loans for decades and still owe those loans — it's a sign of how aggressive the President is [being] in tackling the student loan crisis," he said.

The relief provisions will soon be open for a public comment period where the administration will consider revisions to its proposal before it goes into effect. Some provisions are expected to roll out as early as this fall, the administration said.

As with Biden's previous student debt forgiveness proposals, it's possible this plan will come under legal scrutiny if challenged by opponents. But this plan differs from his previous action by using a different legal authority — the Higher Education Act — and narrowing the scope of borrowers eligible for relief.

In the event this plan is enacted and a future presidential administration wanted to repeal it, it would need to go through the same lengthy rulemaking process, Kvaal said.

Here's the relief borrowers may expect to see in the coming months.

Up to $20,000 of accrued interest forgiven

Interest accrues daily on student loans and some borrowers have interest rates as high as 8%. As a result, many borrowers wind up with balances higher than what they initially took out for school, despite making regular payments.

Biden's plan aims to address that "runaway interest" by canceling up to $20,000 of the amount a borrower's balance has grown due to unpaid interest after entering repayment. Single borrowers who earn $120,000 or less and married borrowers earning $240,000 or less who enroll in an income-driven repayment plan would be eligible to have their entire excess interest balances discharged, the administration said. 

Some 25 million borrowers stand to benefit from their interest balances being reduced if the plan goes into effect as proposed. An estimated 23 million of those borrowers will have their entire balance growth forgiven, according to the administration.

Automatic loan discharge for forgiveness-eligible borrowers

The Biden administration has canceled debt for over 1 million borrowers through existing forgiveness programs, including Public Service Loan Forgiveness , income-driven repayment and closed school loan discharges.

The administration estimates another 2 million borrowers are eligible to have their debt forgiven under these programs, but have not yet applied .

The new plan will allow the administration to use available data to identify and automatically clear balances for these borrowers as they are eligible, without borrower action.

Debt forgiveness for long-term borrowers

Another 2 million borrowers could benefit from a provision that will clear debt balances that are at least 20 years old for undergraduate borrowers and 25 years for graduate borrowers. It will apply to undergraduate borrowers with direct loans or direct consolidation loans who entered repayment on or before July 1, 2005, and graduate school borrowers who entered repayment on or before or July 1, 2000.

Currently, borrowers enrolled in the Saving on a Valuable Education plan or other income-driven repayment plans are eligible to have their remaining balances discharged after 20 or 25 years, but the new regulation would eliminate the IDR requirement.

Relief for attendees of 'low-financial-value' programs

The Biden administration has made a concerted effort to "hold colleges accountable when they leave students with mountains of debt and without good job prospects," it said in its statement. 

As such, the new plan would waive loans for borrowers who attended institutions or programs the administration identifies as "low-financial-value."

That includes schools that have lost eligibility to receive federal student aid or were denied recertification due to cheating or taking advantage of students, as well as programs that have since closed or have a history of leaving students with high debt loads and poor earnings outcomes.

Help for borrowers facing financial hardship

The administration says it is committed to pursuing a "specific action" for student loan borrowers experiencing a variety of financial hardships , although it's not yet clear who may receive relief and to what degree their balances will be reduced.

"This could include delivering automatic forgiveness to borrowers predicted to be likely to default on their loans, or through an individualized applications where borrowers could detail their financial hardship that is preventing them from being able to fully pay back their loan, such as a child care or medical expense," the administration said in its statement.

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I quit my tech job to be a stay-at-home boyfriend who cooks, cleans, and sews for my girlfriend. I have no plans to return to the 9 to 5.

• William Conrad, 25, and his girlfriend Levi Coralynn, 26, have been together for three years. 
• Conrad is a stay-at-home-boyfriend, while Coralynn, a content creator, supports them financially. 
• Conrad previously worked in tech but has no plans to return.

This as-told-to essay is based on a conversation with William Conrad, a 25-year-old stay-at-home boyfriend and content creator from Canada. The following has been edited for length and clarity.

For the last three years, I've been a stay-at-home boyfriend. I cook, clean, and do the laundry — and I've never been happier.

My girlfriend Levi is big on social media and makes enough to provide for us both financially. She works from home, and I do 90% of the domestic chores. Our dynamic very much flips societal norm on its head, but it works for us, and we love it.

On a typical day I wake up a little earlier than Levi to make us some coffee. We usually share a coffee, hang out for a while, and do Wordle together. Then, she'll do some work while I either prepare food or do other household chores. If we're not ready to eat, I might do some work on the computer alongside her.

Since she works from home, we pretty much spend every minute of every day together, which I love because she's my best friend before anything else.

We lead a very communal life, and that applies to how we navigate money too. We've never had the perspective of "this is my money, this is your money." It's very much a joint venture, and most of our purchases are done together anyway.

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I help with the backend of her business, doing the accounts and bookkeeping, just as much as I do things around the house.

Being a stay-at-home boyfriend allows me to do what I love

Levi and I met on Hinge around three years ago when we were living in different cities. I was living in Toronto, near where I grew up, while she was in Alberta. We started talking online and knew we needed to meet in person, so she came to see me in Toronto.

Our first date was a week long and we stayed in an Airbnb . Shortly after that, we moved in together in Ontario, and we've been together ever since.

Growing up, I didn't have a strong sense of what I wanted to do, but I knew I didn't want to sit in an office all day looking at a monitor. I've always liked creating things and working with my hands. But I ended up studying computer science at college and then found a job at a tech startup .

When I met Levi, I was doing freelance jobs here and there, and some more consistent stuff in the tech world. She was deep into her career as a content creator and needed help running her online business. She thought I'd be the perfect fit and asked if I would work for her. So I quit my job and became a full-time stay-at-home-boyfriend.

It wasn't that I didn't enjoy my job, but this was just a greener pasture that I could step toward. It was an opportunity that was better suited to me, I think, in the long run. I was really into cooking and sewing before I even met Levi, and this meant I could focus on those interests more and hone my skills.

I have no plans to return to the 9-to-5 and would only do so if our online businesses stopped working.

I started posting online to show the world a softer type of masculinity

In August 2022, I started posting snippets of my life on TikTok. My videos mainly showcase the meals I cook for Levi, but sometimes it's me braiding her hair, hemming her clothes, or fixing things around the house. I'm soft-spoken and have a gentle manner, and the comments from my mainly female audience have been overwhelmingly positive. These are all things I do anyway, but it was Levi's idea to share it with the world.

It was around the time that Andrew Tate , the anti-feminist influencer, was really popular, and there was an oversaturation of toxic masculinity online. We saw this need and an opportunity to present a kind, loving man in the online space. One thing I'm very proud of is showing the duality a man can have. I have both feminine and masculine characteristics, but I'm still a man.

I was raised in a very nurturing household where both my parents worked and split the domestic tasks evenly. Everyone contributed to the household, and gender was never tied to a specific role, so living this way has never affected my sense of masculinity.

Social media is giving young men a skewed image of what women want

Women often comment things like "Where do I buy mine?" on my content. And while it's always nice to hear that someone thinks I'm a good boyfriend, it's also sad that a loving dynamic seems to be a scarce thing.

Lots of women are looking for a man who will cook them a nice meal and be gentle, but maybe not enough men value these things.

I think toxic masculinity on social media might be giving young men and boys a skewed perspective of what women want. I hope to inspire other men to lean into their feminine traits more without feeling like it threatens their manhood.

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The Sunday Read: ‘What Deathbed Visions Teach Us About Living’

Researchers are documenting a phenomenon that seems to help the dying, as well as those they leave behind..

By Phoebe Zerwick

Read by Samantha Desz

Produced by Jack D’Isidoro and Aaron Esposito

Narration produced by Anna Diamond and Emma Kehlbeck

Original music by Aaron Esposito

Engineered by Sophia Lanman and Sharon Kearney

Listen and follow The Daily Apple Podcasts | Spotify

Chris Kerr was 12 when he first observed a deathbed vision. His memory of that summer in 1974 is blurred, but not the sense of mystery he felt at the bedside of his dying father. Throughout Kerr’s childhood in Toronto, his father, a surgeon, was too busy to spend much time with his son, except for an annual fishing trip they took, just the two of them, to the Canadian wilderness. Gaunt and weakened by cancer at 42, his father reached for the buttons on Kerr’s shirt, fiddled with them and said something about getting ready to catch the plane to their cabin in the woods. “I knew intuitively, I knew wherever he was, must be a good place because we were going fishing,” Kerr told me.

Kerr now calls what he witnessed an end-of-life vision. His father wasn’t delusional, he believes. His mind was taking him to a time and place where he and his son could be together, in the wilds of northern Canada.

Kerr followed his father into medicine, and in the last 10 years he has hired a permanent research team that expanded studies on deathbed visions to include interviews with patients receiving hospice care at home and with their families, deepening researchers’ understanding of the variety and profundity of these visions.

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Additional production for The Sunday Read was contributed by Isabella Anderson, Anna Diamond, Sarah Diamond, Elena Hecht, Emma Kehlbeck, Tanya Pérez and Krish Seenivasan.

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