parts for a business plan

What demographics will most likely need/buy your product or service?
What are the psychographics of this audience? (Desires, triggering events, etc.)
Why are your offerings valuable to them?

It can be helpful to build a buyer persona to get in the mindset of your ideal customers and be crystal clear on why you're targeting them.

5. Marketing Strategy

Here, you'll discuss how you'll acquire new customers with your marketing strategy. You might consider including information on:

The brand positioning vision and how you'll cultivate it
The goal targets you aim to achieve
The metrics you'll use to measure success
The channels and distribution tactics you'll use

It can help to already have a marketing plan built out to help you inform this component of your business plan.

At some point in your business plan, you'll review the key features and benefits of your products and/or services. Laying these out can give readers an idea of how you're positioning yourself in the market and the messaging you're likely to use . It can even help them gain better insight into your business model.

7. Pricing and Revenue

This is where you'll discuss your cost structure and various revenue streams. Your pricing strategy must be solid enough to turn a profit while staying competitive in the industry. For this reason, you might outline:

The specific pricing breakdowns per product or service
Why your pricing is higher or lower than your competition's
(If higher) Why customers would be willing to pay more
(If lower) How you're able to offer your products or services at a lower cost
When you expect to break even, what margins do you expect, etc?

8. Financials

This section is particularly informative for investors and leadership teams to determine funding strategies, investment opportunities, etc. According to Forbes , you'll want to include three main things:

Profit/Loss Statement - This answers the question of whether your business is currently profitable.
Cash Flow Statement - This details exactly how much cash is incoming and outgoing to provide insight into how much cash a business has on hand.
Balance Sheet - This outlines assets, liabilities, and equity, which gives insight into how much a business is worth.

While some business plans might include more or less information, these are the key details you'll want to include.

Keep in mind that each of these sections will be formatted differently. Some may be in paragraph format, while others will be in charts.

Sample Business Plan Templates

Now that you know what's included and how to format a business plan, let's review some templates.

1. HubSpot's One-Page Business Plan

Download a free, editable one-page business plan template..

The business plan linked above was created here at HubSpot and is perfect for businesses of any size — no matter how many strategies we still have to develop.

Fields such as Company Description, Required Funding, and Implementation Timeline gives this one-page business plan a framework for how to build your brand and what tasks to keep track of as you grow. Then, as the business matures, you can expand on your original business plan with a new iteration of the above document.

Why We Like It

This one-page business plan is a fantastic choice for the new business owner who doesn’t have the time or resources to draft a full-blown business plan. It includes all the essential sections in an accessible, bullet-point-friendly format. That way, you can get the broad strokes down before honing in on the details.

2. HubSpot's Downloadable Business Plan Template

Sample business plan: hubspot free editable pdf

One of the major business expenses is marketing. How you handle your marketing reflects your company’s revenue. We included this business plan to show you how you can ensure your marketing team is aligned with your overall business plan to get results. The plan also shows you how to track even the smallest metrics of your campaigns, like ROI and payback periods instead of just focusing on big metrics like gross and revenue.

Fintech startup, LiveFlow, allows users to sync real-time data from its accounting services, payment platforms, and banks into custom reports. This eliminates the task of pulling reports together manually, saving teams time and helping automate workflows.

When it came to including marketing strategy into its business plan, LiveFlow created a separate marketing profit and loss statement (P&L) to track how well the company was doing with its marketing initiatives. This is a great approach, allowing businesses to focus on where their marketing dollars are making the most impact.

“Using this framework over a traditional marketing plan will help you set a profitable marketing strategy taking things like CAC, LTV, Payback period, and P&L into consideration,” explains LiveFlow co-founder, Lasse Kalkar .

Having this information handy will enable you to build out your business plan’s marketing section with confidence. LiveFlow has shared the template here . You can test it for yourself.

2. Lula Body

This fictional business plan for an art supply store includes everything one might need in a business plan: an executive summary, a company summary, a list of services, a market analysis summary, and more. Due to its comprehensiveness, it’s an excellent example to follow if you’re opening a brick-and-mortar store and need to get external funding to start your business .

One of its most notable sections is its market analysis summary, which includes an overview of the population growth in the business’ target geographical area, as well as a breakdown of the types of potential customers they expect to welcome at the store. This sort of granular insight is essential for understanding and communicating your business’s growth potential. Plus, it lays a strong foundation for creating relevant and useful buyer personas .

It’s essential to keep this information up-to-date as your market and target buyer changes. For that reason, you should carry out market research as often as possible to ensure that you’re targeting the correct audience and sharing accurate information with your investors.

6. Curriculum Companion Suites (CSS)

business plan examples: curriculum companion suites

If you’re looking for a SaaS business plan example, look no further than this business plan for a fictional educational software company called Curriculum Companion Suites. Like the business plan for the NALB Creative Center, it includes plenty of information for prospective investors and other key stakeholders in the business.

One of the most notable features of this business plan is the executive summary, which includes an overview of the product, market, and mission. The first two are essential for software companies because the product offering is so often at the forefront of the company’s strategy. Without that information being immediately available to investors and executives, then you risk writing an unfocused business plan.

It’s also essential to front-load your company’s mission if it explains your “Why?” In other words, why do you do what you do, and why should stakeholders care? This is an important section to include if you feel that your mission will drive interest in the business and its offerings.

Whether you’re planning to open a shop that makes the best coffee or you want to sell eco-friendly office supplies, you’ll need to explain why your business is necessary and how it’ll differ from its competitors. That’s where your business plan comes in. It provides investors, lenders and potential partners with an understanding of your company’s structure and goals. If you want to gain the financial autonomy to run a business or become an entrepreneur, a financial advisor can help align your finances.

1. Executive Summary

Your executive summary should appear first in your business plan. It should summarize what you expect your business to accomplish. Since it’s meant to highlight what you intend to discuss in the rest of the plan, the Small Business Administration suggests that you write this section last.

A good executive summary is compelling. It reveals the company’s mission statement, along with a short description of its products and services. It might also be a good idea to briefly explain why you’re starting your company and include details about your experience in the industry that you’re entering.

2. Company Description

A company description includes key information about your business, goals and the target customers that you want to serve. This is where you explain why your company stands out from other competitors in the industry and break down its strengths, including how it offers solutions for customers, and the competitive advantages that will give your business an edge to succeed.

3. Market Analysis

This is where you show that you have a key understanding of the ins and outs of the industry and the specific market you plan to enter. Here you will substantiate the strengths that you highlighted in your company description with data and statistics that break down industry trends and themes. Show what other businesses are doing and how they are succeeding or failing. Your market analysis should also help visualize your target customers. This includes how much money they make, what their buying habits are, which services they want and need, among other target customer preferences. Above all, the numbers should help answer why your business can do it better.

4. Competitive Analysis

A good business plan will present a clear comparison of your business vs your direct and indirect competitors. This is where you prove your knowledge of the industry by breaking down their strengths and weaknesses. Your end goal is show how your business will stack up. And if there are any issues that could prevent you from jumping into the market, like high upfront costs, this is where you will need to be forthcoming. Your competitive analysis will go in your market analysis section.

5. Description of Management and Organization

Your business must also outline how your organization is set up. Introduce your company managers here and summarize their skills and primary job responsibilities. An effective way could be to create a diagram that maps out your chain of command.

Don’t forget to indicate whether your business will operate as a partnership, a sole proprietorship or a business with a different ownership structure. If you have a board of directors, you’ll need to identify the members.

6. Breakdown of Your Products and Services

While your company description is an overview, a detailed breakdown of your products and services is intended to give a complementary but fuller description about the products that you are creating and selling, how long they could last and how they will meet existing demand.

This is where you should mention your suppliers, as well as other key information about how much it will cost to make your products and how much money you are hoping to bring in. You should also list here all relevant information pertaining to patents and copyright concerns as well.

7. Marketing Plan

This is where you describe how you intend to get your products and services in front of your target customers. Break down here the steps that you will take to promote your products and the budget that you will need to implement your strategies.

8. Sales Strategy

This section should answer how you will sell the products that you are building or carry out the services that you intend to offer. Your sales strategy must be specific. Break down how many sales reps you will need to hire and how you will recruit them and bring them on board. Make sure to include your sales targets as well.

9. Request for Funding

If you need funding, this section focuses on the amount of money that you need to set up your business and how you plan to use the capital that you are raising. You might want to include a timeline here for additional funding that you may require to complete other important projects.

10. Financial Projections

This final section breaks down the financial goals and expectations that you’ve set based on market research. You’ll report your anticipated revenue for the first 12 months and your annual projected earnings for the second, third, fourth and fifth years of business.

If you’re trying to apply for a personal loan or a small business loan, you can always add an appendix or another section that provides additional financial or background information.

Bottom Line

Every company is different so your business plan might look nothing like another entrepreneur’s. But there are key components that every good plan needs to have, and it’s always a good idea to provide a clear and accurate summary of your business goals in your business plan.

Tips for Business Owners

Photo credit: ©iStock.com/nandyphotos, ©iStock.com/shironosov, ©iStock.com/cigdemhizal

Parts of a Business Plan

Whether you are starting a pizza shop or a plumbing business, a flower shop or a factory, you need a solid plan. In fact, your Business Plan will be an essential tool throughout the life of your business – from starting out to cashing in. It will help you to start out on the right foot, stay focused, get financing, manage your growth, and more.

Not every Business Plan will be the exactly same, but every Plan should incorporate several key elements.

The Parts of the Plan

Here are the key pieces to a solid Business Plan.

Table of Contents

A list of the individual sections and their page numbers, starting with the Title Page and ending with a section for Special Materials (references, etc.).

Summary/Overview

A brief, but focused statement (a few sentences or paragraphs) stating why the business will be successful. This is the most important piece of a Business Plan because it brings everything together.

Market Analysis

Description of the Company

Organization & Management

Marketing & Sales

The company’s process of identifying and creating a customer base. (See: “ Market Research “)

Description of Product or Service

These are just the basic essentials to creating a Business Plan. Each plan should be tailored to the specific business. (See: Business Plan Assistance )

The new automotive mandate: Moving from building products to building businesses

Growth is everything in the automotive industry. It protects incumbents and propels start-ups into the winner’s circle. Furthermore, changes in business dynamics across industries suggest growth is becoming even more potent as other formerly key success factors like global supply chains falter in the face of the pandemic and other challenges.

McKinsey research has observed an evolving trend in corporate longevity, indicating a dynamic business landscape. In the late 1950s, companies on the S&P 500 enjoyed an average tenure of 61 years; by 2020, this had decreased to 20 years, showcasing the rapid pace of innovation and market adaptation. Looking ahead, we anticipate this trend to continue, reflecting the opportunities for new businesses to emerge.

New business building is a top-five agenda item

Corporate leaders are increasingly focused on building and scaling up new businesses, with eight in ten executives considering it a top five agenda priority. They’re right to prioritize it: companies that focus on building new businesses significantly outperform their peers. They outgrow their markets more often and by greater amounts than competitors pursuing organic growth strategies. In fact, over 45 percent of them outperform the market, while only 30 percent that don’t make new businesses a top three priority do the same. McKinsey’s research suggests that if made during early periods of turbulence, these kinds of investments can have an outsize impact on a company’s recovery later on.

We believe now is the time for industry incumbents to embark on business building strategies. A variety of mobility trends indicate that the industry has reached an inflection point that fosters growth due to the accelerated changes to the ecosystem that have occurred over the past few years. Major elements of this growth opportunity include autonomous-driving innovations, connectivity enhancements, shared-mobility breakthroughs , and fleet decarbonization efforts . In the United States, these and other mobility growth opportunities could cause emerging mobility solutions revenues to expand faster than both GDP per capita growth and traditional mobility revenues associated with vehicle, parts, and maintenance-services revenues.

Automotive leaders plan to build new businesses

Our research reveals that 70 percent of automotive and assembly business leaders prioritized new business building in 2022, up from 61 percent in 2021 (exhibit). By committing to building new businesses, incumbents are entering a race with the many start-ups that are attacking the mobility space. Known for fostering innovation, start-ups typically exhibit five key strengths that distinguish them from incumbents: they adopt agile ways of working, develop innovative value propositions, nurture cultures that attract talent, cultivate greenfield solutions, and provide a safe environment for rapidly trying, failing, learning, and trying again. While adopting these hallmarks poses a challenge for most incumbents, they nonetheless can accomplish it, given the right levels of commitment, ambition, incentives, and freedom to act.

Incumbents enjoy advantages

The companies that currently inhabit the automotive industry have little in common with the incumbents of yesteryear. They have weathered the combined challenges of a pandemic, global supply chain disruptions, fickle economic winds, changing technology archetypes, and much more. In addition, they have arguably navigated through the current macroeconomic environment better than many mobility disruptors who had initial public offerings within the past five years.

Faster moving and leaner than their predecessors, these incumbents have opportunities to leapfrog disruptors given their extensive existing customer bases, strong balance sheets capable of funding new ventures, and cash flow to remain competitively viable.

Drivers of Disruption - Episode 1 - Building new businesses in mobility with Travis Katz and Asad Husain

Unlike start-ups, incumbents have many years of experience in the industry. An incumbent typically has an existing customer base, a balance sheet to fund new ventures, cash flow that provides working capital, a strong brand to reach wide audiences, and subject-matter experts with deep knowledge. Incumbents can also capitalize on their experience with managing physical products—since an estimated 70 percent of new automotive business will likely center on a physical product—something start-ups struggle with, and incumbents can exploit to outdistance their rivals.

While the physical product is important, it’s only one part of the greater mobility ecosystem. Incumbents must build ecosystem products and employ their market presence in terms of credibility and relationships to build a differentiating ecosystem for their new ventures. The world’s largest companies in terms of market capitalization build ecosystem economies focused on new integrated hardware, software, and service offerings.

Business building for incumbents is not easy

While long-time industry players enjoy some key advantages over start-ups in understanding the automotive “lay of the land,” our analysis shows that many will likely fail to build successful new businesses that scale for several key reasons. These include failing to exploit the incumbent’s core business strengths in the new enterprise, failing to secure the needed capital or talent, and short-circuiting longer-term success to capture near-term profitability. Other reasons involve dragging down the new business with bureaucracy and failing to instill a risk–reward culture.

Some examples of these struggles include a major technology company’s launch of smartphones and a firearm manufacturer’s expansion to off-road cycling. The former struggled with identifying clear customer needs. Their smartphones focused on flashy features the company assumed would be desired by customers, though they often lacked the compatibility and simplicity of competitors’ phones. For the firearm manufacturer, off-road cycling equipment seemed far-fetched. The company’s branding efforts failed to build a clear connection to the core offering, resulting in an unsuccessful product launch.

Where to begin

Success stories.

A tier-one auto supplier had created two business ideas based on customer needs, unearthed via extensive interviews about their mobility journeys. The supplier realized its typical way of operating wouldn’t work with the new businesses because it was too slow, too focused on core products, and too encumbered with political considerations. It decided to move the new enterprises outside of the core business to enable better agility and more independence. This move included a new governance structure that gave the businesses greater autonomy via stage-gated funding rounds. The businesses developed milestones tied to the release of additional funds over several funding rounds. Between funding decisions, the businesses would freely make operational decisions that were right for them, thus increasing agility and enabling them to build their own cultures unincumbered by the mother company.

A leading tier-one auto player that followed this recipe realized the benefits of the minimum viable product approach, which it initially considered unsuitable for physical products. By taking stock of its internal contacts and customers, the company realized it could quickly test key assumptions of its offerings with early prototypes before making significant capital investments. One major learning was to start building the team as rapidly as possible, as several necessary capabilities were new to team members, and because finding the right talent takes time.

The good news is that incumbents have access to a proven approach to innovative business building (see sidebar “Success stories” for examples). We refer to it as the five B’s:

In this article, we’ll offer suggestions for incumbent leaders to approach the first three elements, as these are often the areas where incumbents face the toughest challenges.

Breakout: Generating and prioritizing new business ideas

How it’s done: a case study.

When developing a business, most incumbents tend to go in reverse order, starting with a product that is already technically complete and seeing if a market is big enough or attractive enough for its introduction, then asking marketing to develop messaging that will help it resonate with target consumers.

A leading OEM took the opposite approach, and in the space of five weeks was able to define two major businesses outside of its core operations that it plans to pursue further. Even though this company had a suite of designers, R&D engineers, and business development personnel, it realized how different the design thinking approach was from anything it had done in the past. The company deliberately moved away from its typical approach to new product development, which involved R&D first creating a product that could be interesting, then business groups determining what customer segments would be most appropriate, and then relying on marketing to push interest forward. Instead, it started with dozens of exploratory user interviews and synthesized the common themes that emerged from the conversations.

From those themes, initial concepts emerged through workshops comprised of cross-functional company employees. It then tested these concepts again through exploratory interviews to further refine and iterate the results. To satisfy the data-backed nature of the incumbent, the team complemented the qualitative findings of the interviews and workshops to test interest at a much larger scale, while also testing willingness to pay. Through this process, the team quickly built conviction in its business concepts, first on the desirability of the concept and second on its business viability. The conversation then shifted to, “How can we build this?”—a question the incumbent had plenty of tools at its disposal to answer.

There’s a saying that a great business is 10 percent idea and 90 percent execution, but even identifying, and more important, prioritizing, new business concepts can be early stumbling blocks for incumbents. Below are some suggestions for how to be successful in making this critical first step in the business building journey (for more information, see sidebar “How it’s done: A case study”):

Use your company’s overall strategy to scope out the ‘idea’ space. Starting from an entirely blank sheet of paper for new business ideation can be a pretty daunting task that can lead to stalled momentum, or worse, an idea that is too far afield from the core that there’s no “right to win.” Our research and experience show that the best new ventures are rarely a 90-degree turn from the core; they are most often found in adjacencies that leverage an existing strength of the business in a new way.

Spend time understanding unmet customer needs in the market. Take a customer-centric approach from the outset to identify where there are unmet needs in identified markets and themes. This will require incumbents to learn about the audience for whom they are designing and ask what customer needs and behaviors are important through quantitative and qualitative approaches.

Prioritize at the intersection of desirability, viability, and feasibility. The most successful businesses sit at the intersection of three separate but interrelated spaces: desirability (does it solve a pressing need for customers), viability (is the opportunity space large enough to deliver that value proposition, and can it be profitable), and feasibility (can you be successful in building and executing, and do you fundamentally have a right to win). Evaluating business ideas against all three of these criteria will help to create clarity on which ones have the highest potential to be successful down the road.

Blueprint: Defining the MVP and road map

Blueprinting the business before it is built: a case study.

Most incumbents approach a future endeavor, be it a new product or new market, with a heavy reliance on the past—templates, project plans, budget requests, and numerous other documents. These items often form the foundation of future projects and, if unchecked, can lead to a reliance on incrementalism rather than examining what the art of the possible could truly be.

A leading OEM was confronted with this same dilemma when developing the plan for the launch of a new business that was adjacent to its core, but with elements (business model, go-to-market approach, organizational structure) that were very different from any initiative this OEM had ever undertaken. The team leading this effort took two deliberate steps that underpinned its success.

Once the incumbent has prioritized a business concept, it needs to rapidly and iteratively plan how to build, measure, and learn to bring the product vision to life. Three suggestions can help. (To see these steps in action, see sidebar “Blueprinting the business before it is built: A case study.”)

Define and prioritize your customer segments, then deeply understand them. Establishing focus and attention for a specific segment of the customer base is critical to create capacity to go deep in really understanding the targeted value proposition, feature set, and willingness to pay for a new product. Start by developing a clear understanding of how customer segments break down and where the intersection of desirability, viability, and feasibility is strongest. Then use this specificity to inform your go-to-market strategy, including understanding purchase decision journeys, engagement points, and marketing/brand strategies.

Work backward from the vision to a first MVP. Speed to market is paramount to get products in the hands of real customers and accelerate the iteration and feedback loop—and it is the best way to determine planning and development. Typical issues include what are the quickest MVPs that can test the key assumptions of the offering, how can the incumbent rapidly prototype and test the MVPs and scale them over time, and what is the product road map (for example, user stories, feature backlog).

Scale operations and technology to fit the product road map. Although speed to market is a priority, a forward-looking approach is necessary to plan for scale in the iterations ahead. The optimal solution for low-volume prototyping is different than that for manufacturing and sourcing needs at scale. Common questions to consider are: What are the technology, infrastructure, and systems integration requirements for building the product? Are there opportunities to partner, make, or buy, and can they accelerate speed to market?

Build: Bringing the MVP to market

Once the company has defined the MVP and its rollout plan, it is time to build and launch the business, which should include the following considerations.

Establish new ways of working. Moving at speed will often mean creating a significantly different mindset and process for product development and business building than exists traditionally for incumbents. Creating separation from the core so that the new team can operate independently is critical, balanced by clear governance and funding mechanisms that create transparency and derisking along the way.

Mix existing and new talent. Beyond filling identified critical capability gaps that likely exist in the core to deliver new ventures (for example, software engineers, product managers), bringing in new talent from outside the company also helps to inject new energy and establish a new identity/culture for the team. Attracting and retaining this new talent will require new ways of recruiting, a new employee value proposition, and new incentive structures that will likely vary significantly from the core.

Build alongside your future customers. Bringing one or two lighthouse customers “into the tent” to codevelop the first version of your product is a great way to ensure that you are not building in a vacuum. As an added benefit, these customers can become your first evangelists who advocate for your product early and build momentum.

New business building has become a top agenda item for many automotive incumbents, but they often find it very difficult to do successfully. The suggestions outlined in this article and in other publications by McKinsey’s Leap Practice highlight pitfalls to avoid and lay out a path that incumbents can follow to create value. Acting during these turbulent times could yield outsize returns and could be the difference between simply surviving the downturn or thriving beyond it.

Matias Garibaldi is a consultant in McKinsey’s New York office, where Ari Libarikian is a senior partner and Anil Nathan is an associate partner; Asad Husain is a partner in the Toronto office.

The authors wish to thank Lilli Beard, Lance Ealey, Michael Fein, Ruth Heuss, David Kohn, Colin Lee, Nick Liao, Avital Vainberg, and Cal Williams for their contributions to this article.

The parts of business plan and definition refer to the governing document of your company and the elements it should include. The business plan thoroughly describes your company's purpose, structure, and goals for potential partners, stakeholders, and investors.

Purpose of a Business Plan

Your business plan will be informed by the specific goals for your business. The more complex your product or service, the more complex and detailed your business plan must be. If you are using the business plan to seek investors, you'll need to provide a thorough explanation of your concept and how it fits into your industry.

Once you've drafted a plan, show it to colleagues, partners, and mentors you trust. They can provide an objective view of the business plan and indicate areas where you may need to provide more thorough information.

Executive Summary

This is the first section of your business plan and provides a quick overview of what you want to accomplish with your company. This should comprise the mission statement followed by a description of the services and/or products you provide. Use this basic outline:

Company Description

A more involved company description should follow the executive summary. This section details the business's key information and examines the market segment you want to capture. The company description is the "meat" of your business plan and should include information about:

This is also where you should include operational details such as your hiring plan for the first year or two in business with job classifications and duties. You should also indicate the type of facility you will need for operations and where it will be located.

Market Analysis

This section will demonstrate your understanding of your specific market as well as your industry as a whole. Include the following information:

Product and Service Information

Describe the products and services your business will offer, providing enough detail for those who may be unfamiliar with your industry. Indicate whether you will need to patent your product idea and/or whether a patent application is pending. You should also indicate other steps you've taken to protect intellectual property such as your business name, product names, logo, and branding identity.

If you are manufacturing a product, include information about the materials you'll need and your suppliers for those materials as well as the production process.

Financial Projections

This section demonstrates your plan to make a profit using realistic numbers with a basis in research. Although your ideas are important, you'll also need to show that you will generate enough cash flow to capture a significant market share. Elements this section of your business plan should address include:

Management Information

A strong management team will inspire confidence in potential lenders, investors, and partners. The purpose of this section is to make your people shine by highlighting their unique strengths. This part of your business plan should include answers to these questions:

Additional Information

Complete your business plan with supplemental information that will strengthen your case. Finish with a summary that restates the highlights of your plan and indicates your determination to succeed as a business owner. Attach supporting documents such as licenses, permits, patents, product diagrams, building blueprints, and letters of support from consultants and/or your accountant and attorney.

If you need help with creating a business plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top five percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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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.

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.

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:

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.

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.

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:

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:

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:

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:

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.

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What Are the 4 Important Parts of a Business Plan?

How to Write a Strategic Plan to Raise Capital

How to prepare business plans, what are the components of a good business plan.

When you’re starting a small business, a sound business plan is a critical element you need to secure funding and develop your operational and marketing tactics. While there are several different sections within a business plan, it’s critical to focus on the most important ones so that you can guide your business where you want it to go.

The four most important sections of a business plan include your unique value proposition, details about your management team, your market analysis and your financial projections.

The 4 Most Important Elements of a Business Plan

According to the U.S. Small Business Administration , a business plan is like a GPS for your new venture. Without it, you can often feel lost or confused. Taking time to write out a solid business plan helps to cement your ideas and fine tune your tactics. This is a good exercise to do even if you don’t need to get funding for your business. A business plan helps entrepreneurs think through their ideas carefully, and provides the next steps they need to take to succeed.

When you’re writing a business plan, it’s important to consider your audience. In many cases, this includes potential investors, partners or financial institutions. They want to understand why your business is posed to succeed and why you are the person that’s going to get it there. As a result, there are four key areas you need to focus on in your business plan, in addition to the rest of its contents:

Anyone who is looking at your business plan will pay special attention to these four key areas because they summarize your plan for success.

Describe Your Unique Value Proposition

Directly after your executive summary, you need to include a section in your business plan where you describe your company and the products or services you sell. This section should include details on your business structure, legal form and whether you need any special licenses or permits. This practical information is key, according to Entrepreneur , because investors need to see that you have the logistical details in place.

This section is a key element of your business plan because you have the opportunity to showcase what makes your business unique. According to Forbes , it’s critical to show how your products and services are different from your competition. For example, do you use a new ingredient that other cafés don't have, or do you have a unique process no one else in the industry knows? These are the types of things you’ll need to include in this section of your business plan.

Plus, be sure to outline who your market is. Who are your ideal customers and why will they be interested in what you have to offer? You can provide an overview of your prospects here and delve deeper into it in your market analysis.

Showcase Your Management Team

A most important aspect of a business plan is the management bios. When it comes to small businesses, your successes are interlinked with the company leadership. A business can succeed based on the experience, education and expertise of its owner. Similarly, it may fail if the leadership team makes poor decisions, lacks the proper experience or isn’t interested in learning new skills.

As a result, investors and financial institutions will want to know who is heading up your organization. Take some time to write up professional bios of your core management team. This may include the business owner and heads of key departments such as sales, marketing and product development.

The bios should contain previous positions the management team have held and what kind of accolades they have received. Adding quantitative metrics is key, such as a sales manager increasing sales in their last position by 110 percent. If anyone of the leadership team has previous experience starting a business, be sure to highlight this information and provide the successes of that business. You’ll also need to point out any skills gaps, and discuss how you plan to fill them with additional resources or outsourced assets, according to Constant Contact .

Conduct a Market Analysis

Another most important component of a business plan is the market analysis. In this key section, you need to cover why this is a viable market from a financial standpoint, according to The Business Plan Shop . This requires a lot of detailed quantitative and qualitative research into your target audience and your competition.

Begin by outlining who your audience is, and provide their demographic, geographic, behavioral and psychographic characteristics. It’s important to provide numbers wherever possible to show how big your potential market segment is and whether it can support your business. Be sure to outline what kind of problems or challenges they are experiencing and how your business can solve them.

You’ll also need to provide a competitive analysis by reviewing other players in your industry. Provide estimations on how much market share each competitor has and where you have opportunities to take market share from them. This section should also include any barriers to entry. For example, can anyone open up a similar store and take market share away from you?

Provide Financial Statements and Projections

Perhaps the most important part of a business plan, especially for investors, partners and financial institutions, is your financial projections. These show the viability of your business in the years to come, according to Constant Contact. While complicated graphs, charts and spreadsheets can look intimidating, it’s important to be familiar with them and be able to talk about them in plain English. Entrepreneur recommends providing a cover page to the financial document section describing the content in detail.

Be sure to include these three financial statements in this section:

Other Important Elements of Your Business Plan

While these four sections are key to your business plan, it’s important to also focus on the other necessary sections. Typically, business plans follow a templated order so that information is provided in a logical format to meet your investors’ needs. Be sure to include these sections within your business plan:

Some investors or financial institutions may have separate requirements for business plans, so it’s important to keep your audience in mind when writing it out. Whenever possible, be sure to provide concrete examples, quantitative information and intricate details. Remember that writing out a business plan is useful for you even if you’re not seeking investment or funds, because it will help you clarify your plans and develop market strategies for success.

Anam Ahmed is a Toronto-based writer and editor with over a decade of experience helping small businesses and entrepreneurs reach new heights. She has experience ghostwriting and editing business books, especially those in the "For Dummies" series, in addition to writing and editing web content for the brand. Anam works as a marketing strategist and copywriter, collaborating with everyone from Fortune 500 companies to start-ups, lifestyle bloggers to professional athletes. As a small business owner herself, she is well-versed in what it takes to run and market a small business. Anam earned an M.A. from the University of Toronto and a B.A.H. from Queen's University. Learn more at www.anamahmed.ca.

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Joe Biden will meet with the House speaker Kevin McCarthy on Tuesday to discuss the debt ceiling.

Republicans take aim at Biden’s climate plan in debt ceiling fight

Republicans are determined to link any increase in the ceiling with cuts to Biden’s signature climate legislation

Amid warnings about looming fiscal catastrophe, the GOP is attempting to use Biden’s climate agenda as a bargaining chip over raising the debt ceiling – even if it could hurt Republican voters.

Late last month, House Republicans narrowly passed speaker Kevin McCarthy’s proposal to raise the government’s debt ceiling in exchange for sweeping cuts to federal spending.

Known as the Limit, Save, Grow Act, the proposal – which is unlikely to progress through the Democrat-majority Senate and which the president says he would veto – would eliminateBiden’s student loan forgiveness plan and claw back pandemic relief spending. It would also repeal most of the new renewable energy tax incentives codified in the Inflation Reduction Act.

“Republicans unfortunately are not allowing government to function as intended,” said Mark Paul, a professor of economics at Rutgers University.

All but six Senate Republicans on Saturday promised to oppose raising the debt ceiling “without substantive spending and budget reforms”, supporting McCarthy’s position. Biden is set to meet with McCarthy on Tuesday.

The Inflation Reduction Act dedicated $369bn to climate and renewable energy policies, constituting the largest down payment on climate policy in US history. But the GOP proposal would gut the majority of those provisions.

The McCarthy bill would repeal the $4,000 credits for used vehicles and phase out some of the $7,500 credits for new EVs, remove tax breaks for building solar panels and other clean energy infrastructure, and put an array of other climate incentives on the chopping block. RL Miller, president of the advocacy group Climate Hawks Vote and a member of the Democratic National Committee, called it a “hostage situation”.

“I am screaming at the top of my lungs for climate people who don’t normally get that into debt ceiling fights … to get involved in this one,” she said.

The proposal was also originally set to eliminate incentives for the production of corn ethanol, but members of the Republican caucus from the midwest, where corn used to make ethanol is grown, successfully fought to preserve those provisions.

The proposed cuts could help McCarthy curry favor with the far-right wing of his party. But if passed, the measure would come at great cost to Republican voters. The Financial Times last month found that red congressional districts have secured five times more funding for clean energy projects from the Inflation Reduction Act than blue districts; Politico found that two-thirds of the major renewable energy projects announced from the spending bill’s passage through January 2023 were slated for Republican-led districts. The result would be the loss of more than 77,000 clean energy jobs across 72 Republican-held districts, according to a recent report by the environmental advocacy organization Climate Power.

“People in red states, in particular, need to be aware that their representatives are acting counter to their own economic interests,” said Miller.

McCarthy also slipped a GOP proposal to speed energy permitting into his debt ceiling bill. Known as HR 1, the measure, which passed the House in March, would expedite the federal approval of energy projects and limit states’ ability to reject them, while buttressing domestic fossil fuel production.

Among the “most egregious” provisions: a plan to repeal a fee that the Inflation Reduction Act imposed on emissions of methane – a greenhouse gas that is 80 times more planet-warming than carbon dioxide in the short term – from oil and gas operations, said Michelle Deatrick, head of the Democratic National Committee’s Council on the Environment and Climate Crisis.

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“That’s the low-hanging fruit of the climate crisis, the thing that we need to do now without delay,” she said. “And it is also something that we know how to reduce quickly.”

If Congress can’t reach an agreement on the debt ceiling and the US defaults on its debts, Paul said the effects would be cataclysmic.

“We’re talking about catastrophic global financial systems that will make 2008 look like a bump in the road in comparison,” he said. “This would be economic apocalypse.”

In that scenario, he said, the US could bring climate spending to a halt. But there’s no reason for Biden to entertain that possibility, he said, because he has the ability to unilaterally end the debate by instructing the US Treasury to mint a single trillion-dollar coin or issue premium bonds .

US officials warn that the climate crisis poses an existential risk to the US financial system – one that will require massive spending to avert. Studies show that delayed climate action will only increase costs in the future.

“We have Republicans essentially saying, ‘Well, in order to put the US economy on better ground, we need to cut climate spending,’” said Paul, “which is just talking about shooting yourself in the foot.”

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First Published: May 17 2023 | 9:20 PM IST

Main content

Elon Musk's plans for Tesla advertising will be a major boost as key pieces of the EV maker are undervalued, Wedbush says

Tesla's plans to start advertising were met with excitement after the company's Annual Shareholder meeting on Tuesday, with CEO Elon Musk later admitting surprise over the level of enthusiasm expressed by shareholders.

Investors are right to be excited, according to Wedbush Securities' Dan Ives.

In a note on Wednesday, Ives said the move is as a major positive for the electric vehicle maker, as it could expand the company's prominence among broader markets.

The note said that "many parts of the Tesla product portfolio are undervalued by the Street with [Full Self-Driving] a major potential value adder on top of the company's expanding product portfolio across auto and energy," adding that advertising could help inform the public about Tesla's offerings.

Prior to Tuesday's announcement, Tesla had not advertised, though Musk would promote the company through his Twitter feed and on other public forums. The decision to finally do away with the no-marketing approach was in response to a shareholder's question, and made in the moment, Musk said in a CNBC interview.

Though there hasn't been enough time to develop formal plans, he said advertising would emphasize information on Tesla's pricing and safety.

Ives also noted other positives that could cause an upside swing for the carmaker.

Notably, Musk's recent decision to hire Linda Yaccarino as Twitter's new CEO was "music to the ears of Tesla shareholders." That's after Musk's chaotic take over of the social media platform last fall, leading to frustration among investors over his divided attention and bad press for Tesla.

New Tesla products were also teased during Tuesday's event, and would be critical to accelerated growth, the note said. Though Musk did not disclose details, he estimated that the new offerings would amount to 5 million units sold annually. Meanwhile, the long-awaited Cybertruck is on track to hit production this year.

The CEO also gave encouraging outlooks on a sell-driving future, while AI implementation within Tesla's products also provided a positive tailwind. Tesla's next-gen unit is set to half the factory footprint and require no rare-earth metals, the note said.

"Overall, while Musk cited a choppy macro for the next year, we heard an optimistic Musk with Tesla set to have a strong year of innovation and demand in the year ahead," Ives wrote.

Tesla's stock rose 4.5% Wednesday to $174.05 a share. Wedbush has maintained its outperform rating and has a $215 price target.

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Write your business plan
Executive summary. Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company's leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.
How To Write A Business Plan (2023 Guide)
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
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Business Plan: A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a ...
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10 essential components of a business plan. Effective business plans contain several key components that cover various aspects of a company's goals. The most important parts of a business plan include: 1. Executive summary. The executive summary is the first and one of the most critical parts of a business plan.
13 Key Business Plan Components
13 Key Business Plan Components. We've built a comprehensive guide to the major parts of a business plan for you. From elements like the executive summary to product descriptions, traction, and financials, we'll guide you on all of the key sections you should include in your business plan. As is the case with most big projects, crafting a ...
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18 Best Sample Business Plans & Examples to Help You Write Your Own
This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it's one of our favorites to supplement any template you choose to use. Harvard Business Review's guide is instrumental for both new and seasoned business owners. 7.
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The 8 Key Components of a Business Plan (2023)
The financial plan is one of the most critical parts of the business plan, especially for companies seeking outside funding. A plan often includes capital expenditure budgets and forecasted income statements, which can help predict when your company will become profitable and how it expects to survive in the meantime.
The 4 Must-Have Components of a Business Plan
1. Executive summary. This is one of the shortest components of a business plan, but the one you should spend the most time working on. Whether your business plan is 5 or 30 pages, an executive summary section must recap all of the material in your plan in only two pages.
Writing a Business Plan: Main Components
A business plan can take many forms, depending on the venture. A four-person management consulting firm may produce a leaner plan focused on service expertise and industry experience compared to a 20-employee widget maker, which would also have to describe products, manufacturing techniques, competitive forces and marketing needs, among other details.
Components of a Business Plan
The 10 sections or elements of a business plan that you must include are as follows: 1. Executive Summary. The executive summary provides a succinct synopsis of the business plan, and highlights the key points raised within. It often includes the company's mission statement and description of the products and services.
Parts of a Business Plan
Parts of a Business Plan. Whether you are starting a pizza shop or a plumbing business, a flower shop or a factory, you need a solid plan. In fact, your Business Plan will be an essential tool throughout the life of your business - from starting out to cashing in. It will help you to start out on the right foot, stay focused, get financing ...
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12 Key Elements of a Business Plan (Top Components Explained)
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The 7 Components of a One-Page Business Plan
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As a result, there are four key areas you need to focus on in your business plan, in addition to the rest of its contents: The unique value proposition of your business. The experience, education ...
9 Critical Components to Creating Your Business Plan
Your marketing strategy should include a market penetration strategy, a growth strategy, channels of distribution, and a communication plan. Your sales strategy should include the sales activities or tactics you plan to implement. Funding Request: If you are seeking funding for your business, this is where you outline your funding request.
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Elon Musk's Plans for Tesla Advertising to Boost EV Maker, Wedbush Says
Elon Musk's plans for Tesla advertising will be a major boost as key pieces of the EV maker are undervalued, Wedbush says. Tesla's plan to start advertising is a major positive for the EV maker ...

5. Marketing Strategy

6. Key Features and Benefits

7. Pricing and Revenue

8. Financials

Sample Business Plan Templates

1. HubSpot's One-Page Business Plan

Why We Like It

2. HubSpot's Downloadable Business Plan Template

2. Lula Body

6. Curriculum Companion Suites (CSS)

7. Culina Sample Business Plan

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