business plan for an llc

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Write your business plan

Business plans help you run your business.

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

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

Pick a business plan format that works for you

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

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

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

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

Traditional business plan

Lean startup plan

Traditional business plan format

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

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

Executive summary

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

Company description

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

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

Market analysis

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

Organization and management

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

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

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

Service or product line

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

Marketing and sales

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

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

Funding request

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

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

Financial projections

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

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

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

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

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

Example traditional business plans

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

Lean startup format

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

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

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

Key partnerships

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

Key activities

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

Key resources

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

Value proposition

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

Customer relationships

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

Customer segments

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

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

Cost structure

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

Revenue streams

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

Example lean business plan

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

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LLC Business Plan: Everything You Need to Know

An LLC business plan is important so that you know what your short and long-term plans and objectives are for your company. 3 min read

An LLC business plan is important so that you know what your short and long-term plans and objectives are for your company. When drafting your business plan, remember that LLC owners are protected from personal liability for any debts and obligations owed by the business. This means that if the LLC can’t pay a creditor, whether its a lender, landlord, or vendor, the creditor cannot go after the member’s personal assets .

Choosing Management Structure

Its necessary to choose how your LLC will be managed. You can choose to have the members manage the business, which is referred to as member-management. In this case, all members will have absolute oversight and responsibility of the operations of the business. The operating agreement should specify how each member will oversee the company, especially if members have specific roles and responsibilities.

Alternatively, you can have a person or business manage your LLC. This LLC will be referred to as a manager-managed LLC. This means that the manager will oversee the daily operations of the business. The members will then only have voting power and oversight of the significant business decisions.

Elements of a Business Plan

There are certain elements that should be included in all business plans . A business plan allows financial lenders and investors to reference your business plan so that they are aware of your goals and objectives.

First, you’ll want to provide an executive summary, which will be the overall plan for your business, along with the steps needed to expand and grow your business. Next, you’ll want to provide a business background, specifically identifying the skills and experience of each member in the LLC.

You’ll want to draft a marketing plan, which will indicate what products and services you are going to offer to the public. You’ll also need to include the price of each product/service, how you will market such products and services, and how you plan on advertising to draw in new customers. You’ll then need to specify what actions your business will take in order to meet the objectives and goals you have for your LLC.

Another key item in your business plan will be the financial management, statements, and projection. This includes the capital that will be contributed by each member, the monthly budget, anticipated expenses, the expected return on investment, balance sheets, and other strategies for increasing your capital. You’ll need to identify the operating procedures for your LLC, which include if you plan on hiring employees, costs for obtaining insurance (workers compensation, unemployment insurance), and obtaining professional equipment and/or furniture. You’ll close out your business plan by reiterating your goals and objectives; essentially recapping how you will reach what is mentioned in the executive summary.

Limited Liability Issues & Exceptions

As previously noted, while members in an LLC have limited liability in terms of the business's debts and losses, you should know that there are some exceptions to this general rule. Some examples of when an LLC member could be found personally liable include:

• If the member injures someone, particularly if the injury occurs on-site at the LLC principal place of business
• If the member personally guarantees a loan given out by a bank in which the business defaults
• If the member fails to deposit the taxes  that are withheld from employee wages, i.e., fraud
• If the member engages in any other type of fraud or illegal act that causes harm to the company or someone else
• If the member co-mingles LLC assets/business with his or her own personal assets

Regarding the last item, if a member doesn’t separate the LLC assets from his or her own assets, then a court might determine that the LLC is not separate and distinct from the member. This can cause personal liability for all debts of the business. A good way in which to separate your business is to obtain an EIN .

Furthermore, you should put enough capital into the LLC to protect it from potential losses, i.e., ongoing and unexpected expenses.

If you need help coming up with an LLC business plan, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5-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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How to Write a Business Plan

Writing a business plan can be an intimidating endeavor. Whether you’ve decided to start a business , or you already have a business and need to write a business plan to apply for a loan or to pitch to investors , we cover the process in-depth.

Recommended: Our business plan generator walks you through topics like marketing and financial projections so that your business is prepared to succeed.

What Is a Business Plan?

The traditional business plan is typically a 20 to 40-page formal document that describes what your business does, what your objectives are, and how you plan to achieve them.

It lays out your plans for operating, marketing, and managing your business, along with your goals and financial projections.

There are many different types of business plans, depending on the stage of your venture and the purpose of your business plan. In the earliest stages of your business idea, you may want to start small with a three-sentence business plan , or perhaps by sketching out a lean canvas or business model canvas .

Once your business idea has been developed, you’ll be ready to begin writing your business plan .

Why Do You Need a Business Plan?

Writing a business plan requires you to think through all of the key elements of your business. This gives you insights into the challenges you’ll face and the strengths you bring.

A business plan is also often requested by lenders or investors when you are ready to seek financing.

While many companies do not need a formal business plan unless they are planning on seeking investors or applying for a business loan , writing a business plan has extensive benefits.

The process of writing your business plan allows you to take an in-depth look at your industry , market , and competitive position . It helps you set goals , determine your keys to success , and plan your strategies . It also allows you to explore your financial projections and manage cash. So, even if you do not need a formal business plan, the process of planning may still reap huge rewards.

Your Audience

You need to think carefully about who is going to read your business plan.

Although you might begin writing a business plan only to convince yourself, there are a number of stakeholders who may end up reading your business plan.

Your plan might be read by your:

• Partners or potential partners
• Board of directors
• Senior management team
• Current employees
• Employment candidates

Outside the organization , the following stakeholders may want to read your business plan before they decide to do business with you:

• Distributors
• And independent contractors

Think about your primary audience when you are writing your business plan. What are the aspects that are most important to them? This is where you will want to put the majority of your focus.

For example, lenders will be most interested in your financial projections — your cash flow statement and balance sheet.

Investors might be most interested in your business model, the uniqueness of your product or service, and your competitive advantage.

Partners, your senior management team, and current employees might be most interested in your strategic plans- your vision, your operational plan, and your organizational plan.

Find Sample Business Plans in Your Industry

One great resource you should check out before sitting down to write your business plan are sample business plans in your industry.

Not only will you have the opportunity to gain insights on your industry and your competitors, you also might be able to find troves of industry and market research that will make conducting your own analysis of the industry and market much easier.

To find example business plans in your industry, try searching the web for “ your industry business plan example.”

Writing Your Business Plan

Once you have spent some time looking at sample business plans in your industry, it is now time to start writing your business plan . An easy place to begin is by outlining the major sections you will need in your plan.

What you need to include in your business plan will depend on the type of business you are creating, your business model, and who your intended audience is.

Common business plan sections include:

• Executive Summary — a high-level overview of your business or business idea
• Venture Overview — a description of your company, vision, mission, and goals
• Product or Service Description — a detailed description of your product or service
• Industry and Market Analysis — an analysis of the industry and market you compete in
• Marketing Plan — your overall strategy and specific plans to capture market share
• Organizational Plan — the legal form of the business and the key players
• Operational Plan — how you will operate the business and your key resources
• Goals, Milestones, and Risks — short and long-term goals, milestones, and risks
• Financial Statements — Financial statements or the projected financials of your business

Not every type of venture will require every one of these sections to be included in their business plans. However, most business plans will at least include an executive summary, venture overview, a description of the products and services, and some form of financial projections.

Executive Summary

As suggested in its name, an executive summary is a summary of the key points in your business plan . This is your first chance to convey to readers the what, why, who, and how of your business or business idea.

Although there is no set structure for an executive summary, a good executive summary should summarize :

• The problem you are solving
• Your solution
• Your target market
• Any competitive advantages
• The team you’ll build
• Goals and objectives
• An overview of your financials or financial forecast

If you are writing your business plan for the purpose of acquiring funding , you will also need to discuss the amount of funding required, the purpose of the funds, as well as how your investors will get paid back.

The executive summary should be clear and concise . Ideally, this section should be one to two pages and typically follows either a synopsis or story approach, depending on the intended audience.

In the synopsis approach, you would provide a brief summary of each of the key sections of your business plan. In the story approach, your executive summary reads like a narrative, allowing you to tell the “story” of your business or idea.

With either approach to writing the executive summary, the information you want to convey remains the same. The executive summary needs to provide an overall picture of your current business or business idea.

The executive summary should include:

• A brief description of you and your venture,
• The problem your product or service is solving,
• Some information on your target market, including size, potential, & competition, and
• The solution you are offering.

The executive summary should also include:

• A statement of where you are now,
• A statement of your objectives and future plans,
• A list of what you see as keys to your success, and (if you are seeking investors)
• Any relevant financial information such as start-up costs, funding required, and how you will use investor funding.

Although the executive summary is the first section in the business plan, because it is a summary of the rest of your business plan, it is often written last.

Venture Overview

The venture overview is a top-level depiction of your company.

It contains the:

Description of the Venture

• Vision Statement
• Mission Statement
• Goals & Objectives
• Keys to Your Success

The first part of your venture overview is a description of your venture.

The description of your venture should include what you do (a brief description of your products or services), the value you provide to customers, your current operating status or a brief history of the venture, and a short description of the industry or niche in which you compete.

How to Write a Vision Statement

After describing your venture, a vision statement is a very simple, 5 to 10 word sentence or tagline that expresses the fundamental goals of your firm. Good vision statements reflect your company’s long term passion and purpose, often in a way that evokes emotion.

Take a look at the vision statements below for some inspiration:

Disney —  To make people happy. Oxfam —  A world without poverty. Stanford —  To become the Harvard of the West. Marriott —  To be the #1 hospitality company in the world. Microsoft —  A computer on every desk and in every home; all running Microsoft software.

How to Write a Mission Statement

After having crafted your vision statement, you should also create a mission statement. A mission statement explains your company's goals in terms of what you do for your customers. A good mission statement should tell your reader what your company does, who you do it for, and why you do what you do.

Check out these excellent examples of compelling mission statements:

Patagonia —  “Our Reason For Being: Build the best products, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” Trader Joes —  “Our mission is to give our customers the best food and beverage values that they can find anywhere and to provide them with the information required to make informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit.” Facebook —  "Founded in 2004, Facebook's mission is to give people the power to build community and bring the world closer together. People use Facebook to stay connected with friends and family, to discover what's going on in the world, and to share and express what matters to them."

Goals and Objectives

In this section of the business plan, break down your most important short-term and long-term goals and objectives.

Aim for five to seven of your most important short and long term goals.

This subsection of your venture description should be kept short. You will come back to your goals at the end of your business plan.

However, your key short-term and long-term goals should be highlighted early on in your business plan as well. The rest of your business plan will act as evidence of how you plan on achieving your goals.

Keys to Success

Your keys to success are your insights into what it takes to be successful in your industry, market, or niche.

Your keys to success can include several of the most important milestones that you will need to accomplish in order to achieve your goals.

These may include providing high quality products and services, your ability to attract customers or users and gain market share, or even your ability to develop the technology to deliver your products or services.

Your keys to success may also include the major milestones that you will need to reach along the way in order to achieve your vision. You will come back to your milestones and objectives at the end of your business plan.

Product or Service Description

The product or service description section is where you will go into detail in describing your products or services.

Not only will you describe your product in more detail, you should also discuss the uniqueness of your product, and what gives you an advantage over your competitors.

These are the three main parts of the Product (or Service) Description:

Description of Products or Services

Uniqueness of product, competitive advantage.

In this subsection of your business plan, describe the products or services you will provide, why they are a fit in the market, and how you will compete with similar products and services.

Begin by clearly describing the products or services you will provide. Make sure to explain the features and characteristics of your products and services. Your product or service description does not have to be highly technical. Rather, in addition to describing the features, focus on highlighting the advantages and benefits associated with your products or services.

Also, let your reader know why your product or service is needed. How does your product or service differ from those offered by your competitors? How does it better fill your customers wants and needs?

This is where you tell your reader why your solution is unique. Is it different from everything else out there? How is it different? Why would potential users choose your product or service over your competitors? In order to stand out, you need to distinguish yourself in some way.

To describe your product or service’s uniqueness, you may want to come up with a unique value proposition (or unique selling point). A value proposition is a short description of what you do, who you do it for, and how this benefits them.

A value proposition is similar to a mission statement. However, it differs in that a mission statement is written from the perspective of the company, while a value proposition is written from the perspective of the customer.

Your value proposition should be the center of your customer messaging. It should be front and center on your website, in your marketing materials, and in your advertising.

Here a few examples of great value propositions:

Dollar Shave Club —  A Great Shave for a Few Bucks a Month. No Commitment. No Fees. No B.S. Unbounce —  Build, Publish, & A/B Test Landing Pages Without IT Freshbooks —  Small Business Accounting Software Built for You, the Non-Accountant Skype —  Skype Keeps the World Talking, for Free. Share, Message, and Call - Now with Group Video on Mobile and Tablet Too.

What makes you better than competitors?

Does your competitive advantage come from superior products and services, customer service, technical support, logistics, price? What are the factors that give you an advantage over your competitors?

Clearly defining your competitive advantage is important.

Your competitive advantage is not just some abstract concept. It is at the core of how you deliver value to your customers. Your competitive advantage lays the foundation for your business model and should be a key component of your strategic plans.

Common areas where businesses find competitive advantages include:

• Intellectual Property
• Resources/Capital
• Economies of Scale
• Knowledge/Experience
• Connections and Network
• Customer Service
• Technical Support
• Customization
• Brand Recognition/Loyalty

Industry and Market Analyses

The industry and market analysis is the “big picture” view of your industry and market.

Conducting an industry and market analysis is going to take a good deal of research. You will likely need to research your industry, your competitors, and your customers. But do not rush through this section of your business plan.

A good understanding of your industry and market is critical to your success. By understanding the forces at play within your industry, you will be better able to find additional ways to create value that will allow you to succeed in the current and anticipated competitive environment.

Conducting an industry and market analysis can be intimidating, especially if you do not know what to look for or how to find the information you need. In the next section, we will discuss what should be included in your industry analysis. Then, we will tell you where to begin looking.

Industry Analysis

The industry analysis is a big picture analysis of the industry you will compete in. What does your overall industry look like today? There are a number of insights that will help you assess the attractiveness of your idea and form a big picture view of the industry and segment you are considering competing in.

Key insights to be alert for include:

• The dominant economic features of the industry
• The industry’s driving forces
• The industry’s competitive environment
• The competitive position of major players and key competitors
• Key industry success factors

To arrive at meaningful insights from your industry analysis, try to find answers to the following questions:

• What primary products or services are provided by your industry?
• What is the size and trajectory of the industry?
• What was the annual growth rate of the industry over the past year? Three years? Five years? Ten years?
• What is the forecasted annual growth rate over the next three years? Five years? Ten years?
• What is the average profitability of firms in your industry?
• What trends are affecting your industry?
• Who are the major customer segments served by your industry?
• Who are the major players in your industry?
• Who will be your key competitors in your industry?
• What key factors determine success or failure?

Industry Research

Now that you have a better idea of what to look for, you will need to know where to begin your search. There are a number of great free resources to begin looking for industry research. However, the first step is to determine the industry you are in.

While by this point, you should have some idea of the industry you are in, it is not always so clear. You could try an internet search to see what information you can find on your industry, but you will also want to find the NAICS code. You can do a NAICS Code Lookup and find the NAICS Code for LLC that matches your industry.

Here, you use the NAICS identification tool to drill-down through a list of industries to find the appropriate NAICS code for your business.

Once you know your industry, you can begin collecting more information about the industry trends and trajectory.

www.Bizstats.com provides free industry statistics including industry averages for income statement revenues and expenses, balance sheets, and key financial ratios. This is very helpful in making financial forecasts and setting benchmarks.

The US Census Bureau also provides several tools to help you conduct industry research:

• The Economic Census provides information on employer businesses, including data sorted by industry, state, region, and more.
• Statistics of US Businesses (SUSB) provides additional data on US businesses by enterprise size and industry. Both of these tools may help in conducting your industry analysis.

Target Market Analysis

Once you have a better understanding of the industry, you can begin to narrow down to your target market. In this section of the business plan you describe who your target market is and what you know about them.

What is a target market? Your target market is the specific group of customers to whom your product is intended. And no, it is not everyone. Although many new venture founders would like to sell their product or service to everyone, you should focus your efforts on your most likely customers.

Narrowing your target market requires understanding the three types of markets for your products or services. Your venture’s market can be narrowed down into three categories, the TAM, the SAM, and the SOM.

The total available market (TAM) is the total market for your products and services. Everyone in the universe who might be your customer.

The serviceable available market (SAM) is the subset of the total market that you can actually reach. Although anyone in your universe might be your customer, you are limited in your ability to reach them all.

The share of market (SOM) is the subset of the serviceable available market that you will actually reach. These are your most likely customers. Your target market.

Target markets can be segmented in many different ways. The idea is to narrow down to your most likely customers. This is where your focus should be.

Ways you can segment the market include:

• Demographic (e.g., age, gender, family size, education, income)
• Geographic (e.g., country, state, region, city, neighborhood)
• Psychographic (e.g., benefits sought, personality, social class, lifestyle)
• Behavioral (e.g., benefits sought, usage, attitude, loyalty)

Once you understand who your target market segments are, you will be able to start determining how you can reach them. To do this, consider:

• Where does your target market get information to make purchasing decisions?
• What is it they are looking for when considering buying this product/service?
• What will your target market pay attention to?

Market Research

To determine your target market and conduct a market analysis, you will most likely have to do market research.

Market research is the collection, analysis, and interpretation of data related to your target market and target customer to support strategic decision making.

There are two types of market research : secondary market research, and primary market research.

Secondary market research is the collection, analysis, and interpretation of data that has already been collected for other purposes. Secondary market research may include the collection of data from a number of sources such as the U.S. Census Bureau, consumer agencies, and for-profit organizations.

Primary market research is the collection of new information to gain a further understanding of the problem at hand. Primary market research involves you collecting the data or hiring a market research firm to collect data for you. This is you going out and actually collecting the opinions of your potential customers.

Common methods of primary market research include customer observation, focus groups, customer surveys, and customer interviews .

Because primary market research typically takes more time to complete and may incur significant costs , secondary market research is often conducted before conducting primary market research. This allows you to gather enough insights that you can narrow your primary market research to those more likely to be your customers.

To begin conducting secondary market research, consider these sources:

Think with Google provides a number of free tools and resources to help you find and understand your target market. From tools like Find My Audience and an Insights Library to a wealth of information on customer trends and the consumer journey, Think with Google is a valuable tool in conducting your market analysis.

City Town Info provides free statistics on people and places, colleges and universities, and jobs and careers. You can search for data on more than 20,000 U.S. communities at the city and state levels.

Google Trends is another useful tool for conducting market research. Google Trends allows you to explore what people are searching on the internet. You can examine trending topics, see trends by year, or search your own topic to discover interest over time, by region, or by related queries.

Social Mention allows you to conduct a real-time social media search for topics across more than 100 social media platforms. Social Mention provides you with information on the sentiment behind topic mentions, top keywords, top hashtags, and the social media platforms where these topics are being discussed.

Needless to say, there are several other great sources for both industry and market research. The key is to get creative to find the data and information to both guide your strategy as well as justify your business opportunity.

Competitive Analysis

Once you understand your industry and market, you should also include an analysis of your major competitors.

Your competitors may include anyone offering alternatives to your solution that people are using now to solve the same problem.

You will want to understand and explain who your competitors are along with their market share , price, major competitive advantages and disadvantages, and what makes your product unique from theirs.

Start by identifying the major competitors within your industry. You should focus on your closest competitors. Those that compete with you directly.

Next, for each competitor, describe their strategies, their strengths, and their weaknesses. In doing so, try to answer the following questions:

• What are their primary products and or services?
• Who are their target customers?
• What differentiates your product or service from theirs?
• What is their pricing strategy?
• What is their marketing strategy?
• What is their main message or value proposition?
• What are their strengths and weaknesses?
• What are their competitive advantages?

You should complete a competitive analysis for your top three to five competitors. Doing so will allow you to gain a much better perspective on the competitive landscape and may provide insight into how you can distinguish yourself from your competitors and even how you can take advantage of areas where your competitors fall short.

Marketing Plan

The marketing plan depicts the overall strategy your venture pursues to capture market share.

The marketing plan describes all aspects of marketing for your venture, including the product, price, place, and promotion . This includes a big picture view of your marketing strategy, your planned marketing mix, as well as your pricing strategy, sales strategy, and advertising strategy.

The marketing plan should be well informed by your industry and market analysis. By now, you have a plethora of knowledge about who your target customer is, the problem and pain points that you are alleviating for them, and how your competitors are positioned. All of this knowledge allows you to hone your marketing plan to reach your target market with the right message in the channels they turn to for information.

Marketing Strategy

The first section of your marketing plan is your marketing strategy. Your marketing strategy refers to your overall strategy of how you will market your product. How will you get your message out to your potential customers?

Your marketing strategy should consider the four essential elements of marketing:

The 4 Ps of Marketing:

The product is everything the customer gets, whether it be a physical product, a service, or an experience.

It is what you deliver. This includes the product or service itself, along with its branding, packaging, labeling, and even benefits.

The price is what you charge. What the customer gives you. Your business plan should discuss your pricing strategy and where this fits in your marketing mix.

Are you competing on price and thus offer low pricing? Or are you focusing on value at a medium price point? Or maybe you are positioned as a luxury label or item, and compete at a high price point? Why did you choose this strategy? Does it fit with your target market and within your marketing mix?

Location refers to where your customers find you, or where you find them.

While much of today’s marketing is done online, location is still as important as ever. Once you understand the place, you will have a much better idea on how to deploy your marketing mix. Where do your ideal customers get their information? Where do they shop? What forms of social media do they use?

Promotion is how you tell customers about your products and services.

Simply put, promotion is how you raise awareness of your products, services, or brand. Promotion strategies may include public relations, content creation and curation, marketing, and advertising.

But, keep in mind, your promotional strategies should be focused on one thing: your target customer and the strategies and messaging that works for them.

Your Marketing Mix

Your marketing mix is how you allocate resources to the marketing channels that you plan to pursue. In this section of your marketing plan, you will describe the marketing messaging and channels that you plan to use, and why these are appropriate for your target market.

Inbound Marketing

Inbound marketing, or content marketing, is a form of marketing designed to draw traffic to your website by providing valuable content to your target market. This is often achieved by posting useful web content, content, videos, and blogs.

The idea behind inbound marketing is pretty simple- by providing knowledge and information on your products, services, and other information that is valuable to your customers, you generate more leads and, hopefully, more sales.

Social Media Marketing

With over 3.5 billion people around the world using social media, social media marketing is another powerful tool to reach potential customers.

Social media marketing has many advantages, including allowing you to get your message in front of your specified target audience at little to no cost.

Although there is an overabundance of social media channels to choose from. Focus on the ones that your target market uses to get their information.

For instance, if your target market is middle age or older people, you may want to focus on platforms that are more popular with these demographics such as Facebook, Twitter, and Pinterest. However, if your target market is teen agers and young adults, you are more likely to find them on platforms such as Instagram and TikTok.

The Power of Video Marketing

Do not forget to discuss the use of video marketing in your marketing mix.

In both inbound and social media marketing, video has begun to play an increasingly important role. Video marketing can be employed in inbound marketing, email marketing, and social media marketing to serve a variety of purposes. The most common uses of video marketing include explainer videos, presentation videos, testimonial videos, sales videos, and video ads.

Not only can video marketing be used in a variety of methods and contexts, it is a highly consumed type of advertising. In fact, in 2020, 96% of consumers watched an explainer video to find out more about a product or service. Video works. And marketers believe this too. 92% of marketers who utilize video marketing say that it is a key part of their marketing strategy.

Email Marketing

Depending on the type of venture your company is, email marketing may also be an important element in your marketing mix. A good email marketing strategy balances gaining new customers with keeping your existing customers engaged with your company.

Although you do not want to overdo it, and a lot of email marketing seems “spammy”, email marketing can be very effective in the right form. Welcome notes, confirmation emails, informational emails, newsletters, digital magazines, promotional emails, and seasonal and birthday campaigns are just a few of the many types of email marketing.

Referral Marketing

Another common type of marketing in a company's marketing mix is referral or recommendation marketing. Referral or recommendation marketing can take many forms. Referral marketing might include good old organic word-of-mouth marketing wherein you ask customers for referrals, or even a formal system for rewarding customers who refer new clients.

Pricing Strategy

The Marketing Plan section of the business plan should also describe your pricing strategy. How are you going to price your products and services?

There are a number of ways you can approach pricing:

Markup Pricing —  Markup pricing is pricing based on your costs, plus a predetermined markup. The amount you mark up your product or service is usually expressed as a percentage, known as the gross margin. Markup pricing is most often found in high volume manufacturing industries where manufacturers must cover the cost of the products they are making.

Competitive Pricing —  Competitive pricing is pricing based on your competitors prices for similar products or services. Competitive pricing is most often seen in products or services where there are numerous competitors or substitutes.

Value Pricing —  Value pricing is pricing based on the value or perceived value that you deliver to your customers. In value-based pricing, you set the prices of your products and services in line with what the customer believes your product or service is worth. Value-based pricing is most often seen in higher value products and services, those that cater to self-image, or those that are niche or unique.

Penetration Pricing —  Penetration pricing is setting a low initial price, and then raising it as demand increases. Penetration pricing is designed to capture market share. It is a strategy often used by a new business or in launching new products and services. The idea is to set the price low enough to draw customers from your competition.

Price skimming —  Price skimming pricing is setting a high initial price and then reducing this price as the market evolves. Price skimming is most often used on new or trendy products and services. As initial demand slows and alternatives or competitors emerge, the high initial pricing must then be lowered to stay competitive in the market.

Sales Strategy

A sales strategy is how you plan on selling your products or services to your target market. This includes your sales channels (where will your product or service be available for sale) as well as how you will sell your product or service.

Your sales strategy depends on your business model and the nature of your business. If your business involves retailing, food services, or personal services where your customers come to you to make a purchase, your sales strategy may be quite simple (or even unnecessary to income). However, if your business involves personal selling, you may need a more thought-out sales strategy.

Some questions to ask to determine and document your sales strategy in your business plan:

• Will your products or services be available on your website?
• On a third-party website?
• In retail locations?
• In your own stores?
• In other retail stores?
• Directly to consumers? (Business to Consumer or B2C)
• To businesses? (Business to Business or B2B)
• Cold calling?
• Networking?
• Inside salespeople?
• Outside sales representatives?
• Sales through strategic partners?

Advertising Strategy

An advertising strategy is how you plan to use sponsored, non-personal messaging to reach and inform potential customers of your product, service, or brand.

Your advertising plan should describe the mediums you are going to advertise in , who you are targeting advertising in these mediums, your advertising message(s), and your advertising budget. A good advertising plan is also measurable, so be sure to consider how you are going to measure the effect of your advertising strategy to see if it is working.

Advertising Mediums

The most common advertising mediums typically fall into the categories of traditional advertising and digital advertising.

Traditional advertising includes print advertising such as newspapers, magazines, flyers, direct mail, and even billboards, as well as radio and tv advertising.

Digital advertising includes email advertising, search engine advertising, website advertising, social media advertising, influencer advertising, among many, many more.

The secret to finding the right advertising strategy and advertising mediums for your business is knowing where to find your most likely customers. Where is your target market, and where do they go to get their information?

Organizational Plan

The organizational (or management) plan describes:

• The legal form of the business
• Its organizational structure
• The background and roles of the leadership team
• Key personnel that are already in place or you will need to fill.

Organizational Type and Structure

The first part of your organizational plan describes your organizational type and structure . Who owns your company? And what is its legal business structure?

There are four primary types of organizational structures:

Sole Proprietorships

Partnerships.

• Limited Liability Companies (LLCs)

Corporations

Sole Proprietorships and Partnerships are informal business structures , while LLCs and Corporations are more formal business structures .

The best type of structure for your business will depend on your business’s particular characteristics and needs. A partnership structure may be the best choice for some businesses, while an LLC or a corporation might work better for others.

Sole proprietorships are an informal type of business structure. While many businesses start out as sole proprietorships because they are an informal business structure the owner is liable for 100% of the business's liabilities and risks. Thus sole proprietorships are typically not the preferred ownership structure for small businesses.

Similar to a sole proprietorship, a partnership is also an informal type of business structure. While a sole proprietorship involves only one owner, a partnership is a business structure with two or more partners where there is still no legal distinction between the owners of a partnership and their business.

An LLC is a formal business structure that distinguishes the owners from the business itself.

LLCs offer the personal liability protection of a corporation with the pass-through taxation of a sole proprietorship or partnership.

It is the simplest way of structuring your business to protect your personal assets in the event your business is sued.

LLCs can be owned by one or more people, who are known as LLC “members.” An LLC with one owner is known as a single-member LLC, and an LLC with more than one owner is a multi-member LLC.

LLCs require operating agreements . Operating agreements are legal documents that outline the ownership and member duties of your LLC. This agreement allows you to set out the financial and working relations among business owners ("members") and between members and managers.

Recommended: Learn how to form an LLC in your state using our free guides.

A corporation is a legal business entity that is owned by shareholders, run by a board of directors, and created through registration with the state.

Corporations offer limited liability and tax benefits but are required to follow more complex operating procedures than their counterpart, the limited liability company (LLC).

Ownership and Executive Team

Now it’s time to sell the single most important element in your business plan. You!

This subsection of your business plan tells readers who is in your ownership and executive team and outlines the accomplishments of your team.

You should include a short profile on each member of your ownership and executive team that will play a role in company decision making.

Who is on your ownership and executive team? What roles will each perform? What knowledge, experience, and accomplishments do you and your team bring to the table? What roles do you still need to fill, and how and when do you plan on filling them?

It is well known that many investors consider the experience and ability of the ownership and management team to be just as important as the idea itself. Do not pass over this opportunity to highlight how your knowledge, experience, and accomplishments set you up to succeed.

Also, remember that when you are writing your descriptions of your ownership team, talk about your accomplishments- as opposed to experience. Accomplishments signify that you have a track record and can get things done.

Key Personnel

This section of the business plan highlights the key personnel associated with the business . This may include members of the management team outside of the owners and executive management, the board of directors, and any outside advisors.

Here, include profiles on each key figure associated with your company, focusing on their accomplishments and the knowledge and skill they bring to the business.

Operational Plan

The operational plan describes how you will operate. The processes, strategies, and resources that you will use to operate your business on a daily basis.

This includes descriptions of production (if you produce a product) or the process you will use to carry out your service. The operational plan may also include, as necessary, descriptions of your logistics and supply chain, physical resources and needs, human resources and needs, technological resources and needs, and timetables for carrying out your plan.

Production Plan or Service Description

The production plan or service description explains how you are going to make and deliver your product(s) or provide your service(s). Although the production plans for products and services may look slightly different, both describe how your company will operate in the day-to-day.

If you are making a product , the production plan is where you will describe the process for making the product. What are your methods of production? What are the steps in your processes? How will you ensure quality? Maintain inventory? Handle Logistics?

If you are providing a service , the production plan is where you can describe the process you go through providing that service. What are your service methods? What will your sales and customer service look like? What is the customer experience like?

Most importantly, which of these might give you an advantage over your competitors? If you have any superior methods, processes, or other advantages, make sure to highlight them in your production plan or service description.

Logistics and Supply Chain

This section of the business plan describes your logistics and where you fall within the supply chain in your industry.

If you produce a product , you should discuss how you source materials, where your materials come from, and who your suppliers are. You will also need to discuss how you handle inventory, how you warehouse, and how you distribute your product(s).

If you are a service business , you may still have to discuss how you source materials used in your service, who your suppliers are, and how you handle inventory.

Physical Resources

In this section of the operational plan, you describe the physical resources that you have and the physical resources that you need to acquire. Think through everything you might need. This will become important when it is time to make financial projections.

• What facilities, machinery, equipment, and supplies do you require?
• Do you require raw materials?
• Who will be your primary suppliers?
• Secondary suppliers?
• Do you have back up suppliers and contingency plans if you cannot acquire raw materials?

Technological Resources

You should discuss the technological resources that you are developing, have, or need to create or acquire. Technological resources may include any software, applications, or websites that you have or will need to create, outsource, or purchase.

• What hardware or machinery will you require?
• What software or applications will you require?
• Can you purchase the software and applications you need?
• Are the software and applications you will need off-the-shelf or specialty?
• Will you have to create the software and applications you need?
• Do you need a website?
• Will you create and maintain your website inside the company or have it created and maintained by someone else?

Human Resources

Here, you describe the people that are a part of your team, and the human resources that you need to add to your team, hire, or outsource. Since you have already described the ownership and management team as well as key personnel, this section is more focused on production level workers and lower management.

• How much staffing will you need?
• What skills will your staff require?
• What will your staffing typically look like?
• How will you recruit, train, and retain employees?

Goals, Milestone, and Risk

The goals, milestones, and risks section of your business plan is the place to outline your goals, set key milestones, and explore and explain your preparation for the risks you will face.

Goals lay the foundation of where you intend to take your company and how you are going to get there. It is important to ascertain the short and long-term goals for your company.

Your goals should be connected to your mission and vision, your business model, and your strategic plans. They should also reflect your ambition to move the company forward and are often reflected in key performance indicators (KPIs) , such as numbers of users and customers, revenues, expenses, retention, satisfaction, and other indicators of performance.

Here are some questions to help you develop the goals for your company:

• When do you expect to break even?
• What do you expect your revenue to be in one year? Three years? Five years?
• What market share do you expect to capture in the next year? Three years? Five years?
• Where do you plan to expand from here?
• What KPIs do you need to achieve or improve?
• When do you expect to implement major objectives?
• What level of customer satisfaction do you hope to achieve?

When developing your goals, in addition to defining what your goals are, you also need to consider the how , the when , and the who . First, consider how your goals will get accomplished? What actions need to be taken to achieve your goals? What milestones do you need to accomplish along the way?

Your goals should also include your plan on when you plan on attaining each goal . Not only will your readers be curious about when you plan to achieve your goals, due dates and deadlines make for really powerful motivators.

Finally, you should also determine who is going to be responsible for working toward each goal. In a sole-proprietorship or startup it may be you, the business owner, or your founding team. However, as your organization grows, it will become more and more important to define who is responsible for pushing toward and achieving each goal.

SMART Goals

Your goals should be SMART: S pecific, M easurable, A ttainable, R ealistic, and T imely.

• Specific —  Your goals should be clear and specific. They should be narrow enough that you can determine the appropriate steps to attain them. In addition to what , in planning your goals, do not forget to be specific about how , when , and who . How will your goals be attained? When do you anticipate achieving them? Who is going to be responsible?
• Measurable —  Your goals should be measurable. There should be some objective metric or performance indicator by which you can tell if you have met your goals? How are you going to measure your goals? What metrics or performance indicators will you use? How will you know if you achieve your goals?
• Attainable —  Your goals must also be realistic and attainable. For a goal to be attainable you must be able to achieve it. Do not be afraid to push yourself, but setting unrealistic goals will cast doubt on your entire business plan. Ask yourself, can your goals be accomplished? By you? What will it take to attain them?
• Relevant —  Your goals also need to be relevant. To be relevant, they should contribute to the mission, vision, and success of your venture. Do your goals align with your company’s values? Are they within the scope of and aligned with your operational plan? Your marketing plan? Are they within the budget?
• Timely —  Your goals should also be timely and time-bound. Their process and progress should be clearly defined and they should have a starting and ending date. Without a timeframe, there is no sense of urgency, or motivation to get started. Make your goals time-bound. How long do you expect it to take? When do you plan on getting started? When do you anticipate achieving each goal?

Milestones are important events in your venture’s growth that mark significant change or stage of development.

Creating a list of milestones can act as a checklist of what you need to accomplish for your venture to reach its goals. They tell the story of how you are going to get from where you are to where you are going.

Milestones might include major events and accomplishments, such as:

• Forming an LLC
• Writing a Business Plan
• Securing Seed Capital
• Develop a Prototype
• Begin Production
• First Major Sale
• Reach 10,000 Downloads
• Achieve 1,000 Paying Customers

It is alright to list a few milestones that you have already completed. Or to leave them in your business plan once you complete them. Accomplished milestones show that you are making traction.

Milestones act as a signal to potential investors and other stakeholders what to expect from your venture and when to expect it. They also signal whether the venture is progressing and growing as expected.

Implementation Timeline

The implementation timeline is where you describe where your company is in its lifespan . You should set a timeline to reach your goals and milestones. This should include a short-term timeframe as well as where you anticipate being in the long term.

This section of the business plan should not be long. A simple chart will do. You can find several free timeline templates online to plug in your milestones and the time frame you expect to achieve them.

You will also want to include a section in your business plan showing that you understand the critical risks that your business may be subject to . The risks you will face in your business include both internal and external risks. These are any areas that expose your venture to any kind of loss- assets, customers, sales, profits, and reputation, among others.

By exploring your assumptions and identifying possible risks in those assumptions, you can show that you have assessed and are prepared to handle risks and threats that may arise. There are several tools available to analyze business risks, including SWOT Analysis and contingency planning .

SWOT Analysis

You may want to conduct a SWOT analysis or even include it in your business plan. A SWOT analysis is an analysis of your strengths, weaknesses, opportunities, and threats.

A SWOT analysis can help you understand your industry and market, your venture, and the strategies that you should pursue.

To conduct a SWOT analysis, you will need to assess factors both inside and outside your venture.

Here is how to conduct your own:

• What does your company do well?
• What are your company’s advantages?
• What do you do better than your competitors?
• What unique or low-cost assets do you have access to?
• What does your company not do well?
• What are your company’s disadvantages?
• What do your competitors do better than you?
• What needs to be improved?
• Where can you improve?
• Where can you grow?
• How can you turn your strengths into opportunities?
• How can you turn your weaknesses into opportunities?
• Do the trends of the industry or market represent a threat?
• Is the number of competitors growing?
• Do changes in technology or regulation threaten your success?
• Do your weaknesses represent a threat?

Contingency Plans

After assessing your risks and your SWOT analysis, you should address any major threats or risks that your venture faces with contingency plans.

Contingency plans are plans to help mitigate these risks by establishing a plan of action should an adverse event happen.

Contingency plans show that you understand the threats and risks to your venture, and you have a plan in place to lessen the damage should these risks emerge. There are various ways to prepare for adverse events. One is through planning- identifying alternatives and determining the best course of action. Another is business insurance.

Business Insurance

Business insurance protects against risk from several sources. The type of business insurance you will need varies greatly depending on the nature of your business.

While there are standard types of coverage like general liability insurance , professional liability insurance , workers’ compensation , insurance for commercial property and commercial auto insurance , there are also insurance policies that cover specific business activities and specialized equipment.

You can bundle most of these into what is called a Business Owner’s Policy (BOP) by a trusted insurance provider to get you started doing business.

Financial Statements

Your financial statements should include detailed projections of your income statement , cash flow statement, and balance sheet for the first year. You should also provide quarterly projections for the first three (or preferably five) years as well.

You also will likely need to include some sort of financial statement in your business plan. If you are a new venture, you will supply pro forma financial statements. Pro forma financial statements are simply financial projections.

Financial statements can help you to evaluate the cash needs of your venture, determine whether your venture is feasible and desirable, compare your expected returns with the alternatives, identify milestones and benchmarks, and demonstrate the value of your venture to investors.

Financial Assumptions

Before you begin completing your financial statements, you should first sit down and list the assumptions you will rely on to project your financial statements .

These should include projections concerning your:

• Initial revenue level per month
• Your growth and factors affecting growth
• Your inventory and inventory turnover
• And your operating expenses.

One of the biggest mistakes new ventures make is in making unrealistic assumptions .

Remember, revenue assumptions are key assumptions in determining whether your business will be viable. However, many entrepreneurs are overly optimistic about their revenue assumptions and tend to underestimate their expenses.

In order to make more accurate financial assumptions, back up your assumptions with data whenever possible. To find data to back up your assumptions, look for things like industry averages, market trends, and comparisons with similar ventures. You should already have a substantial amount of this data from your industry and market research.

Pro Forma Income Statements

The income statement , also known as the profit and loss statement , is a statement that shows the projections of your venture’s income and expenses over a fiscal year. On the income statement, you will detail your revenue and sources of revenue based on the assumptions you have made. You will also detail your anticipated expenses and use these to estimate your net income.

The typical income statement includes:

• Revenue —  the total amount of sales, or revenue, projected to be brought in by your business.
• Cost of Goods Sold —  the total direct cost of producing your product or delivering your service.
• Gross Margin —  the difference between revenue and cost of goods sold.
• Operating Expenses —  this section of your income statement details all of the expenses associated with operating your business. Common operating expenses might include rent, utilities, office
• expenses, salary expenses, and marketing and advertising expenses, among others.
• Total Operating Expenses —  the total of your operating expenses, excluding interest, depreciation, and taxes.
• Operating Income —  the difference between your gross margin and operating expenses.
• Interest, Depreciation, and Taxes —  this section of your income statement lists your non-operating expenses- expenses such as interest, depreciation, amortization, and taxes.
• Net Profit —  the total of how much you actually made. This is calculated by subtracting interest, depreciation, and taxes from your operating income.

Pro Forma Cash Flow Statements

The cash flow statement is a financial statement that shows when and where cash (and cash equivalents) flow in and out of your venture. This tells you how much cash you will have on hand at any single point in time.

• Cash from Operating —  Cash flowing into and out of your venture from operating, beginning with “cash on hand.” Cash flowing into your venture from operating includes cash from sales, payments from credit sales, investment income, and any other types of cash income related to operations. Cash flowing out of your venture from operations, your expenses, includes costs of raw goods, materials, inventory, salary expenses, office expenses, marketing and advertising expenses, rent, interest, taxes, insurance, or any other expenses that are paid by the venture.
• Capital Cash Flow —  Cash flow, in or out of the venture, for capital assets such as the purchase or sale of fixed assets.
• Cash from Financing —  Cash flow from financing includes cash flowing in or out of your venture relating to venture financing activities. Inflows of cash from financing include the investments by founders or owners, any loans taken out during the period, or the issuance of any equity. The outflow of cash from financing may include the payment of the principal of any loans, along with the repurchase of any outstanding equity.

Pro Forma Balance Sheet

The balance sheet is a financial statement that balances a venture's finances at a specific point in time. It describes how much the company is worth. The balance sheet uses the accounting equation: assets = liabilities + equity . In fact, these are the main components of the balance sheet:

• Assets —  Resources that hold economic value. A business's assets include current assets and fixed assets. Current assets are resources that can be accessed in the short term. These include cash, accounts receivable, inventory, and other currently available resources. Fixed assets are resources that are intended for long-term use but hold economic value. These include land and buildings, machinery and equipment, furniture and fixtures, vehicles, and other fixed resources.
• Liabilities —  What the business owes. Like assets, a business’s liabilities are also current liabilities and long-term liabilities. Current liabilities are liabilities that are due within 12 months. Current liabilities include accounts payable, loans, and taxes. Long-term liabilities are liabilities that are due after one year. These include long-term loans, notes, and other long-term debts.
• Equity —  What the owners or shareholders own. Equity is also composed of two parts: Capital and Retained Earnings. Retained earnings is the amount of profit that has been retained by the company over the life of the venture. Capital earnings , then, is what’s left. It is what has been invested. For new ventures, this may be the founder’s or early investors’ initial investments. For larger corporations, this would be the value of their shares of stock.

Break-Even Analysis

The break-even analysis shows you how much you have to sell before you break even. The break-even analysis uses fixed and variable costs in order to determine the sales volume you have to attain to reach a break-even point. This is the point where your sales volume covers both your fixed costs and your variable costs.

The break-even point is most often expressed as a number of units. You can calculate the break-even point by dividing fixed cost by the average profit per unit (average price per unit minus the variable cost).

Break-Even Point = Fixed Costs/ Profit Per Unit (Avg. Price - Avg. Variable Costs)

You can also calculate the break-even point in terms of $ of sales. To calculate the break-even point in $ of sales, you can divide total fixed costs for the period by the contribution margin ratio (net sales minus total variable cost / net sales).

Break-Even Point ($ of Sales) = Fixed Costs / Contribution Margin Ratio Contribution Margin Ratio = (Net Sales - Total Variable Cost) / Net Sales

Startup/Funds Required

If you are writing your business plan for the purpose of seeking funding, you should conclude your business plan by describing the investment opportunity.

With your financial projections in place, you will now be able to determine the amount of startup capital or investment you require.

This is because the funding you need is highly dependent on your profit and loss, cash flow, and break-even point. With well-researched assumptions and the evidence to back them up, you are ready to make the case that your business is worth the investment and will be able to pay it back or reward investors in the future.

In this section of the business plan, you will need to explain the amount of funding you are requesting as well as describe what those funds will be used for. The startup funding request will need to cover all expenses (maybe even your own personal expenses) at least until you reach your break-even point.

Business Plan Appendices (Optional)

If you have additional evidence to support your business idea, your business model, or your ability to achieve your goals and meet your financial objectives, you may want to consider including it as an appendix to your business plan.

Additional / Optional Evidence

Owners’ Resumes —  One thing you may want to consider including in your business plan is the resume for each owner. Investors often invest as much in the startup team as they do in the idea itself. Illustrations of Product —  Another helpful appendix is pictures or illustrations of your product. These are especially helpful for new products or those which are difficult to depict with words. Storyboard of Customer Experience — If your business is a service business, you could also consider including a storyboard depicting your customer’s experience. Customer Survey Results — You can also include any market research that you have conducted in an appendix. Showing that you have solicited feedback from real customers or potential customers provides further credence to your venture and venture idea.

Develop Your Business Idea

Before writing your business plan, it is important to take some time to develop your business idea .

If you are starting a new company, there are likely many details of the venture that have not been fully worked through. If you already have an existing venture, the following tools can also be useful in evaluating your business model:

• A three-sentence business plan

The Lean Canvas

The business model canvas, three-sentence business plan.

An easy place to start is with a three-sentence business plan . The three-sentence business plan is easy to construct, and consists of three parts:

• your product or service
• your market and marketing
• your revenue model.

Your Product or Service

The first sentence of your business plan clearly yet simply states your business's primary product or service. This includes the what and the where.

Example: “CoffeeMe is an upscale bakery and coffee shop specializing in imported coffees and international delicacies that will be located in downtown Atlanta.”

Your Market(ing)

The second sentence of your three-sentence business plan describes who your target market is and how you will promote to them.

Example: “CoffeeMe’s target market is urban professionals living and working in downtown Atlanta, marketed and promoted through traditional advertising, company partnerships, and social media.”

Your Revenue Model

The third sentence of your three-sentence business plan explains your revenue model. How will you make money?

Example: “CoffeeMe’s revenue model includes one-time retail sales as well as a unique subscription model featuring all-you-can-drink coffee for subscribers.”

Put it all together, and you have your three-sentence business plan:

Example: “CoffeeMe is an upscale bakery and coffee shop specializing in imported coffees and international delicacies that will be located in downtown Atlanta. CoffeeMe’s target market is urban professionals living and working in downtown Atlanta, marketed and promoted through traditional advertising, company partnerships, and social media. Our revenue model includes one-time retail sales as well as a unique subscription model featuring all-you-can-drink coffee for subscribers.”

Another useful tool for developing your business idea is the Lean Canvas . The Lean Canvas takes a problem-solution approach to helping you plan your business, focusing on the problems you are solving for your customers.

The Lean Canvas helps you describe and visualize your problem, solution, customers, value proposition, key performance indicators, and competitive advantage.

The steps to complete the Lean Canvas are:

• Define your target customers or users
• List the problems you are solving for them and how they are currently solving those problems today
• Describe your solution
• Explain your unique value proposition
• Describe your revenue streams
• Depict how you will reach customers
• Define the key metrics that will tell if you are doing well
• Detail your cost structure
• Explain your unfair advantage

The Lean Canvas, created by Ash Maurya, and licensed under Creative Commons Attribution-Share Alike 3.0 Unported License: https://leanstack.com/lean-canvas

The Business Model Canvas helps you describe and visualize the key aspects of your venture including your customers, value proposition, infrastructure, and revenue and cost models.

If you have already completed a Lean Canvas, you will already have several of the central parts of the Business Model Canvas complete.

The steps to complete the Business Model Canvas are:

• Explain your value proposition
• Describe how you interact with customers
• List the key activities that you will need to do to deliver on your value proposition
• List the key assets that you will need to deliver on your value proposition
• Describe the key partnerships that you will need to put in place to deliver on your value proposition

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Register your llc (limited liability company) with us. we will make the llc registration easy and hassle free for you., creating an llc is easy.

• Choose Your State
• Name of  Your LLC
• Choose a Registered Agent
• File the Certificate of Formation
• Create an Operating Agreement

Find out how to form an LLC for yourself

Learn about LLC formation, including information on Registered Agents, naming rules, business licenses, and more.

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Creating an LLC

Setting up an LLC is one of the most important steps in establishing a business. A limited liability company (LLC) offers many benefits to small businesses, including liability protection and tax advantages.

An LLC can be easily formed. Simply follow these 6 steps, and you’re done.

Step 1. Choose Your State

When forming an LLC, the first thing you will need to do is select the state in which it will operate. The best option for most new business owners is to form an LLC in the state where you live and will conduct business.

If your company will have a physical presence (i.e. a storefront or office) in another state, you must register a foreign LLC in each state where you plan to do business.

However, registering your LLC in another state (or multiple states) may incur additional fees and paperwork.

Learn how to form an LLC in your state with our state-specific guides below:

We do complete LLC process for you across the US.

• Alabama LLC
• Arizona LLC
• Arkansas LLC
• California LLC
• Colorado LLC
• Connecticut LLC
• Delaware LLC
• Florida LLC
• Georgia LLC
• Illinois LLC
• Indiana LLC
• Kentucky LLC
• Louisiana LLC
• Maryland LLC
• Massachusetts LLC
• Michigan LLC
• Minnesota LLC
• Mississippi LLC
• Missouri LLC
• Montana LLC
• Nebraska LLC
• New Hampshire LLC
• New Jersey LLC
• New Mexico LLC
• New York LLC
• North Carolina LLC
• North Dakota LLC
• Oklahoma LLC
• Pennsylvania LLC
• Rhode Island LLC
• South Carolina LLC
• South Dakota LLC
• Tennessee LLC
• Vermont LLC
• Virginia LLC
• Washington LLC
• West Virginia LLC
• Wisconsin LLC
• Wyoming LLC

Step 2. Choose a Name for Your LLC

• The company’s name should include the phrase “limited liability company” or an abbreviation (LLC or L.L.C.).
• Your LLC should not have words associated with a government agency (FBI, Treasury, State Department, etc.).
• If your LLC includes restricted words such as “bank,” “attorney,” or “university,” you may need additional paperwork and a licensed individual, such as a doctor, to be part of the LLC.
• Ensure that the name does not conflict with the name of another LLC or business entity that has already been registered with your state.

If you are not planning on filing your LLC documents right away, you may want to reserve the name . Most states allow you to reserve a name by filling out a form and paying a fee . Reservation periods, filing fees, and renewal policies vary from state to state.

LLC stands for Limited Liability Company. It is a simple business structure that is more flexible and offers many of the same benefits as a traditional corporation. For more information, see “ What is a Limited Liability Company?”.

LLCs are allowed to register a “doing business as” name and use the official name of the entity.

The DBA works much like a personal nickname-you may use your nickname for some purposes and your full legal name for others. To learn more about DBAs, read our What is a DBA guide .

Step 3: Choose a Registered Agent

A registered agent is a person or business that sends and receives legal documents on your behalf. Examples of these documents are court summons and state filing notices.

When forming an LLC, nearly all states require businesses to designate a registered agent. Any person over the age of 18 can serve as your registered agent, as long as they have a physical address in the state where you formed your LLC. Companies can also serve as registered agents.

To learn more about choosing a registered agent, read our article What is a Registered Agent.

Yes. The registered agent can be you or someone else in your company. But you should take into account the following considerations: As your registered agent, you must be available during normal business hours. Business trips and working outside the office may make this difficult.

Get our registered agent service for LLCs so you don’t have to worry about it.

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When forming an LLC with Wise Business Plans, you get a free year of registered agent service. This service provides peace of mind and helps you stay compliant with the law.

Step 4. File your Articles of Organization

You must file articles of organization with your state’s corporate filing office, usually the Secretary of State. Some states call the Articles of Organization the Certificate of Formation or the Certificate of Organization.

Choose your state from the list at the bottom of page to learn more about how to form an LLC there:

Establishing an LLC differs from state to state. The common things you have to include in articles of organization are:

• Name and address of the LLC
• Its duration, if not perpetual
• Name and address of the registered agent
• The purpose of forming the LLC
• A business owner or organizer must sign the form, and the registered agent in some states must sign it as well.

Your LLC formation documents can either be completed yourself (you can file online or by mail) or you can hire an LLC formation service to do it for you. The average state filing fee is about $100.

Member-Managed or Manager-Managed?

If you form an LLC, you’ll have to choose how it will be run. LLCs can be managed in two different ways .

• An LLC may be member-managed, in which all the members (owners) participate in running the business.
• A manager-managed LLC can be set up in which only certain members or nonmembers/outsiders, or a combination of both, run the business.

Get a Certificate From the State

Following the filing and approval of the LLC’s formation documents, the state will issue a certificate or other document that confirms the LLC’s existence.

After you receive the certificate, you can take care of business matters such as getting a tax ID number and business licenses, as well as setting up a business bank account.

Step 5. Create an LLC Operating Agreement

Having an operating agreement is essential to your LLC. It dictates how your company functions internally and with the public. It’s therefore imperative to make sure your business structure works for you.

Even if most states don’t require it, you should have an operating agreement for your LLC.

In the absence of an operating agreement, state law governs your LLC. An LLC operating agreement describes the ownership structure and the roles of its members.

An operating agreement contains some of the following sections:

• Organization: This section describes when and where the company was created, who are the members, and what ownership structure it has.
• Management and Voting: This section discusses how the company is managed and how decisions are made.
• Capital Contributions: Here you’ll designate which members contribute to the LLC and how more funds will be raised in the future.
• Distributions: This shows how the company’s profits and losses are shared among its members. Dissolution: This section explains how an LLC can be dissolved.
• Membership Changes: The procedure for adding and removing members is explained here, as well as what happens if a member dies or leaves the business

Yes. To open a bank account and maintain limited liability, a single-member LLC must have an operating agreement.

With Wise Business Plans LLC Formation Service, you can complete all the paperwork and formalities required to start a limited liability company online.

Step 6: Get an EIN

An Employer Identification Number (abbreviation: EIN) is a nine-digit tax identification number that is assigned to your LLC. Consider it to be your company’s social security number. These numbers are used by the IRS to track business entities for tax purposes.

If your LLC has more than one member, it must obtain its own Employer Identification Number (EIN) from the IRS, even if it has no employees.

If you form a one-member LLC, you will need an EIN only if the LLC will have employees or if you elect to have it taxed as a corporation rather than a sole proprietorship (disregarded entity).

You can obtain an EIN by completing an online application on the IRS website or you can file form SS-4  via mail.

Step 7. Doing Business in the Other States (Optional)

You may need to register for business in other states if your LLC does business in more than one state. In order to do so, you’ll need to fill out and submit paperwork similar to the paperwork you filed when you formed your LLC.

Furthermore, each state where you are authorized to conduct business will require you to have a registered agent.

Many small business owners find LLCs to be a popular and flexible option. It is relatively easy to establish and maintain an LLC in most states.

It is, however, important to complete the paperwork properly and create an operating agreement that outlines the members’ rights and responsibilities.

These are the six steps you need to take to create an LLC most of the time.

There are three states that require you to publish notices in local newspapers. These are Arizona, Nebraska, and New York.

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What to do After Creating an LLC

After you’ve formed your LLC, named it, and filed it, you need to do a few more things to get it fully operational.

Separate your personal and business assets

If your personal and business accounts are mixed, your personal assets (house, car, and other valuables) will be at risk. Here are the steps you need to take to protect your LLC.

1. Create a Business Plan:

If you decide that an LLC will be a good choice for your business in your state, your next step is to create a business plan (although it is not required), so that you have a roadmap for what you will do and how you will accomplish it.

Free: Business Plans Examples

Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.

2. Open a Business Bank account

Separate business bank accounts are not legally required for LLCs.

However, we still recommend opening a separate business bank account to maintain your LLC’s legal protections.

Here are some reasons why you should open a business account:

• Separates your personal assets from the assets of your company, which is necessary for asset protection.
• It simplifies business accounting
• Having a bank account can make it easier to obtain credit for your LLC
• Payments can be made by credit card
• You can prove to the IRS that you run a business
• Your LLC will look more professional with it

Recommended: Discover which banks offer businesses the best business bank accounts , ATM access, interest-bearing accounts, and online and mobile banking options.

3. Get a Business Credit Card

Learn how a business credit card can benefit your LLC  

• For end-of-year tax purposes, it can help categorize and separate all business expenses.
• You can use a credit card to build your business credit score, which is crucial to obtaining a line of credit or a business loan in the future.
• It allows you to keep track of department expenses by giving employees multiple cards (with multiple budgets).
• This can smooth out your cash flow and reduce the impact of short-term ups and downs in your business. Even if you are temporarily short of funds, you can use a business credit card to make critical purchases.
• The use of a business credit card can keep your accounting in order and protect your personal assets by not mingling them with those of the business.
• In many cases, business credit cards offer better terms than personal cards, such as lower interest rates, higher credit limits, longer interest-free periods, and discounts for early payments.

Recommended: Take a look at our review of the best small business credit cards for a closer look at business credit cards and their benefits.

4. Hire a Business Acoountant

A business accountant will help you take advantage of the tax benefits of an LLC and will save your business thousands of dollars in taxes each year. Getting in touch with a business accountant as soon as you start your business will ensure that you receive the best advice.

Recommended: Learn why you need to hire an accountant for your business?.

Getting Business Insurance for Your LLC

Most states require all businesses with employees (including corporations and LLCs) to carry workers compensation insurance. Liability insurance isn’t typically a legal requirement, but it’s highly recommended. Liability insurance protects your business assets from lawsuits. Without it, a lawsuit could force your company out of business.

You can manage risks and grow your LLC with business insurance. There are 10 types of small business insurance , and these are the most common:

• General liability insurance protects your business from lawsuits. Most small businesses purchase general liability coverage.
• Professional liability insurance protects professionals and businesses from claims of negligence from their clients or customers. Liability insurance typically covers negligence, copyright infringement, personal injury, and more.
• Workers’ compensation insurance: Covers illnesses, injuries, and deaths resulting from a worker’s work.

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• General business liability insurance
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Apply for a Business License or Permit

Prior to starting a business , many companies are required to obtain a variety of permits and licenses from federal and state agencies. Even if you don’t think that you need a license to do business, you should make sure by checking with your state’s division of professional licensing.

Most online businesses are more fortunate than offline ones, as they can often avoid most permits and licenses. However, the law is changing rapidly, so it is a good idea to double-check.

You should contact both your local business license department and a CPA. If you want to find out which licenses and permits you need for your specific business, this is the quickest way to do it.

For any business needing a permit, now is the time to register. Business activities such as the sale of alcoholic beverages, mining, drilling, transportation, and logistics require federal permits. State and local rules differ regarding permits.

Need a Business License? We simplify the process.

We can help you obtain business licenses, tax registrations and seller’s permits.

Register Your LLC with State Taxes

Depending on the nature and location of your business, you may have to pay several taxes.

• If you are selling a physical product, you will need to register your company for sales tax.
• If you have employees, you have to pay unemployment insurance tax and employee withholding tax.
• In addition, you may be required to submit an annual report or biennial report.

Make Sure you Check the Hiring Laws

Last but not least, do not hire someone unless you are following state and federal hiring laws. Below are the major requirements for hiring :

• Employees must be eligible to work in the United States.
• You must notify the state of any new hires.
• Employees must have workers’ compensation insurance.
• It is your responsibility to withhold employee taxes.
• Place compliance posters in visible areas of your workspace.
• Employers must receive at least minimum wage as often as required by the state (weekly, biweekly, etc.).

Start an LLC in Your State

How to form an llc faq.

It depends entirely on your small business and its needs. A sole proprietorship may be sufficient for a freelancer or solopreneur.

An LLC, however, offers many advantages, including protection from legal and financial problems your company may face. In addition, LLCs have more options when it comes to taxation. You should seek legal and tax advice before forming any kind of business.

An LLC can protect your assets and is the easiest and most affordable legal business entity to form and maintain. We have a Business Structure guide to help you choose the right business type for your small business.

A corporation is a legal business entity that is controlled by a board of directors and owned by shareholders. The benefits of forming a corporation are limited to businesses that rely on external investors or that need to trade stock publicly. Learn why LLCs are the best legal business entity for most small businesses in our LLC vs Corporation comparison.

Depending on your state, the cost of creating an LLC varies. You can expect to spend a minimum of $50-500 to form an LLC and about $100 per year to maintain one.

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What is a Business Plan?

Making a Business Plan does not need to be a laborious task. Using our Business Plan interview, you can build a professional plan, specific to your state, with minimal effort if you know your business well.

When to use a Business Plan:

• You want to start a new business and want to set out the blueprint for the new venture.
• You are starting a new business venture or project and would like to present a plan to potential investors which clearly outlines you business goals.

Sample Business Plan

The terms in your document will update based on the information you provide.

CONFIDENTIAL BUSINESS PLAN

. EXECUTIVE SUMMARY

, (hereinafter "Business") is intended to be formed as a   located at , ,   , poised for rapid growth in the industry. The Business seeks funding to take advantage of a window of opportunity for introducing a new   product service , which has the potential to dominate the market.

Business Description. The Business is to be organized as a formed and authorized under the laws of the State of Commonwealth of , and will be led by , who will serve as .

New Product.   New Service. The Business has developed a   product service which has the following specifications:

The Business has a window of opportunity to introduce its products services and gain a significant piece of the market share.

. BUSINESS SUMMARY

The business is a start-up business, providing clients with .

Industry Overview. The industry in the United States currently generates in annual sales. Annual revenue for the regional market where the business is located is estimated at .

Position in the Industry.  

Legal Issues. The promoters have secured the required patents and trademarks for the products services and processes of the business in accordance with the statutory requirements.

. MARKETING SUMMARY

Target Markets. The main target markets for the business include:

It is estimated that there are potential customers within the Business defined trading area that are estimated to spend . To seek the most profitable market segments in the target markets overall, the Business will focus on the following areas within the target market:

Competition. Customer choice of services in this industry is based on  

Services. The Business intends to provide exceptional, personalized service, which will be the crucial factor in building and protecting the Business's brand within the community. The Business intends to handle customer concerns and issues with a customer oriented focus with the intent of providing timely resolution and preventing the loss of customers.

. STRATEGY AND IMPLEMENTATION SUMMARY

The Business plans the following tactics as part of sales promotion:

In addition, the Business will also engage in the following marketing campaigns:

. FINANCIAL PLAN

The Funding Request in this Business Plan outlines the major start-up costs associated with this business. Other costs include repair and maintenance, sales and production expenses. Regular monthly expenses are estimated at for paying the employee salaries and other regular business expenses. The Business is expected to generate in the first year, and gross profit is expected to be .

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Business Plan FAQs

When should i use a business plan.

• You are starting a business and want to outline your goals and strategies.
• You need to communicate your business concept to potential investors.
• You want to test your business idea for viability.
• You and your partners want to build a plan together.

Our Business Plan builder is suitable for most types of businesses including online companies, service providers, non-profits and home-based businesses. Making a Business Plan helps you see the potential of your business and it can help others see it, as well.

What is included in a Business Plan?

A Business Plan is not simply a description of your business. It includes market analysis, marketing strategies, financial goals, funding and liability information, and company structure details. What this means is that you'll need to do a bit of work before writing to be able to create a comprehensive plan.

The key areas you'll need to concentrate on include:

Product or service You'll need to be able to tell others, in a few words, exactly what you are offering as products or services. If the product is highly technical or new to the market, you'll want to figure out the best language to use to explain the concept to those who may not be familiar with industry jargon. You should also be able to explain what need this fills for potential customers. You can include images in plan attachments if that helps.

Company structure You need to define who is part of the business and what their roles are. For investors, you'll also want to show how each member is qualified to fulfill their duties. For example, you'll get more investor confidence if your key members have a proven track record in running a business or working in the industry.

Market It is critical that you identify your potential market. If there is a lot of competition, what will you offer that is better than your competitors? If you want to open a coffee shop across the street from another coffee shop, you'll need to be able to explain why that makes sense. You should be able to describe your market in quantifiable terms, like how many potential customers are in the market and what you expect them to spend.

Marketing How exactly do you plan on reaching your new customers? If it is a small local company, are you going to put up signage and attend local events? If your business is online, will you pay for ads or hire an online marketing or SEO company? Do you have strategic relationships with already established businesses? You'll also want to map out your marketing schedule and how you plan to pay for everything.

Financial plans You'll need to map out how you plan to finance your business. Do you have a business loan? Are you going to take an income from the business? How much of the seed money will be from your own savings? Investors will also want to know if you plan to take on additional debt or if other investors are involved. You'll also want to show how you plan to pay back debt and when you expect to be profitable. They may also want to see a tentative budget.

Funding needs If you are looking for investors, how much do you need and how exactly are you going to use the funds? How do you plan to pay back investors and when? Do you have collateral you are willing to put up? Are you prepared to give up equity? What other funding options have you tried? How long can you operate without funding?

Once you have done your research and have a solid plan for moving forward, you can sit down and create your Business Plan easily using our online document builder.

Who should review my Business Plan?

Looking at your business like an outsider is difficult for many small business owners. But your investors, unless they are family or friends, are going to look at it objectively. This is one of the reasons you need a Business Plan capable of surviving intense scrutiny. Once you have your Business Plan made, try to look at it as if you were a stranger to your business. Have a few respected colleagues read through it as well and tell them not to be nice, but to find as many weak areas as they can. If you need to keep your business information private, you can ask those reviewing your plan to sign a Non-disclosure Agreement . If you find information you need to change, you can easily edit your plan. In fact, a Business Plan is an evolving, working document, so change it as often as you need.

How do I write an executive summary?

Writing a good executive summary is important because it may be the only thing an investor reads to decide if they even want to bother with reading the rest of your plan. It should be able to grab the reader right away and entice them to want to learn more. Here are a few tips for writing an effective executive summary:

• Tailor it to your audience, change whenever needed
• Add a sense of urgency, make it timely to the market and ideal to move on now
• Include what needs it fills in the market, what real problem it solves
• Make it more personable by using language like "us" and "we" rather than "the company"
• Use confident and positive words and remove indecisive language
• Write it without worrying about the length and then shorten it as much as you can
• Avoid cliché terms like "best in the world" or "industry disruptor"—Show it rather than tell it
• Test it before you send it
• Write it after the rest of the plan is complete and well researched

If you do not need to share your Business Plan with others, you may not need an executive summary. However, it is a good exercise for building your elevator pitch for times when you talk about your business with others.

How do I evaluate my business competition?

Often small business owners are so excited about their product that they forget to consider their competition. If you are planning on opening a local business, you likely know your competitors. But if you are starting an online business or are in a large city, you'll benefit from market research. One way to perform this analysis is to create a side-by-side comparison sheet. Using this type of document, you can compare pricing, product offerings, web presence, user review scores, size of business and market reach, customer profiles and more depending on your business. If it is a restaurant, you could compare menus, pricing, customer loyalty and patron reviews. If it is an online business, you can compare keyword terms, social media presence, subscription pricing models, or customer service responsiveness to find a competitive angle. You may even benefit from hiring someone to do the research for you since they might be more objective than you. Companies with large budgets may even hire a marketing agency to evaluate the market for them. Regardless of your budget, market research is not a step you'll want to skip in the business planning process.

What should I know about budgeting and financial planning?

Like evaluating your market, you also want to make sure you are realistic when it comes to your financial planning. For example, can you really afford to quit your day job and run your new business? Are your sales projections reasonable? Have you planned for issues that may arise? For example, if you intend to open a cafe, you may need money to take care of unexpected compliance issues. What if your location falls through, and you need to afford a more expensive lease? Have you underestimated monthly expenses like water usage or employee salaries? And if business is good, what will you do with the profits? If you are having trouble creating a realistic budget, you may want to consult with a business accountant. A working budget is needed to help run your business even if you do not plan to ask for funding, so it is important to create a realistic budget.

What should I do if I am stuck?

Sometimes it is hard to complete all the parts of your Business Plan in a way that is impenetrable. Again, you may have to look at your business objectively to evaluate whether it makes sense or not. Is the market already saturated? Is there a market at all? Is there a way to test the market? Is there a certain segment of the market more suitable for your product? Do you have the time to run your business properly? Can you realistically afford to meet your objectives? Do you have the right partners? Is it the best time for your product or service to be launched? Are your goals realistic?

If you cannot answer these questions, it may be time to reevaluate your business idea and market. Perhaps somehow you are missing the mark. You may also benefit from reading through our How to Start a Business Guide . Also, try not to overthink it to the point of road-blocking yourself. While it is important, it is better to have a Business Plan that needs work rather than no plan at all.

A good Business Plan is not fabricated around your pie-in-the-sky dreams for your company to "trick" investors into buying into your vision. A good plan is a working document that proves you have a product or service that can be viable in the real market. Even if you are not seeking funding, creating a functional Business Plan is an excellent tool for proving your business idea is a good one.

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How to Write a Business Plan, Step by Step

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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. add additional information to an appendix, business plan tips and resources.

A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.

ZenBusiness: Start Your Dream Business

Here’s a step-by-step guide to writing your business plan.

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

This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, 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, which should contain 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, it should cover 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 exactly what you’d like to accomplish, both in the near term and over the long term.

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

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

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.

Your sales strategy.

Your distribution 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.

» 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.

You may also include 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.

» NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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.

List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

Here are some tips to help your business plan stand out:

Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. 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. You can search for a mentor or find a local SCORE chapter for more guidance.

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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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 ."

• Business Development: Definition, Strategies, Steps & Skills 1 of 46
• Business Ethics: Definition, Principles, Why They're Important 2 of 46
• Business Plan: What It Is, What's Included, and How to Write One 3 of 46
• Organizational Structure for Companies With Examples and Benefits 4 of 46
• Which Type of Organization Is Best For Your Business? 5 of 46
• What Are the Major Types of Businesses in the Private Sector? 6 of 46
• Corporate Culture Definition, Characteristics, and Importance 7 of 46
• What Is an S Corp? Definition, Taxes, and How to File 8 of 46
• LLC vs. Incorporation: Which Should I Choose? 9 of 46
• Private Company: What It Is, Types, and Pros and Cons 10 of 46
• Sole Proprietorship: What It Is, Pros & Cons, and Differences From an LLC 11 of 46
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 46
• Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 46
• Seed Capital: What It Is, How It Works, Example 14 of 46
• Venture Capital: What Is VC and How Does It Work? 15 of 46
• Startup Capital Definition, Types, and Risks 16 of 46
• Capital Funding: Definition, How It Works, and 2 Primary Methods 17 of 46
• Series Funding: A, B, and C 18 of 46
• Small Business Administration (SBA): Definition and What It Does 19 of 46
• Upper Management: What it is, How it Works 20 of 46
• What is the C Suite?: Meaning and Positions Defined 21 of 46
• Chief Executive Officer (CEO): What They Do vs. Other Chief Roles 22 of 46
• Operations Management: Understanding and Using It 23 of 46
• Human Resource Planning (HRP) Meaning, Process, and Examples 24 of 46
• Brand: Types of Brands and How to Create a Successful Brand Identity 25 of 46
• What Is Brand Personality? How It Works and Examples 26 of 46
• What Is Brand Management? Requirements, How It Works, and Example 27 of 46
• What Is Brand Awareness? Definition, How It Works, and Strategies 28 of 46
• Brand Loyalty: What It Is, and How to Build It 29 of 46
• Brand Extension: Definition, How It Works, Example, and Criticism 30 of 46
• What Is Social Networking? 31 of 46
• Affiliate Marketer: Definition, Examples, and How to Get Started 32 of 46
• What Is Commercialization, Plus the Product Roll-Out Process 33 of 46
• Digital Marketing Overview: Types, Challenges & Required Skills 34 of 46
• Direct Marketing: What It Is and How It Works 35 of 46
• Marketing in Business: Strategies and Types Explained 36 of 46
• What Are Marketing Campaigns? Definition, Types, and Examples 37 of 46
• How to Do Market Research, Types, and Example 38 of 46
• Micromarketing Explained: Definition, Uses, and Examples 39 of 46
• Network Marketing Meaning and How It Works 40 of 46
• Product Differentiation: What It Is, How Businesses Do It, and the 3 Main Types 41 of 46
• Target Market: Definition, Purpose, Examples, Market Segments 42 of 46
• Outside Sales: What They are, How They Work 43 of 46
• What Is a Sales Lead? How It Works and Factors Affecting Quality 44 of 46
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BUSINESS STRATEGIES

Free business plan template for your new business

• Cecilia Lazzaro Blasbalg

Creating a successful business is about more than launching a business website or hanging a shingle on your front door. It requires a well-crafted plan that keeps you on track, anticipates obstacles and acts as a concrete roadmap for launching or improving your small business.

Business planning allows you to clarify your vision while providing information to both intrigue and reassure potential investors. The process may seem daunting, but creating a business plan isn’t difficult—and templates like the one below can help simplify the process even further.

What is a business plan?

A business plan is used by small business owners and entrepreneurs when starting a new business venture. It’s a strategic document that outlines the goals, objectives and strategies of your new or expanding business, including the company's vision, target market, financial projections and operational plans.

A business plan can attract potential partners, convince investors and banks to help you raise capital, and serve as a resource for future growth. Most importantly, you’ll be able to use your business plan as a roadmap for how to structure, operate and manage your new venture, whether it’s a sole proprietorship, a partnership or something larger.

Who needs a business plan?

Every business owner needs a business plan. They’re an essential tool for any person or entity interested in starting a business . There are many benefits, including:

Defining your business idea

Clarifying the market and competitive landscape

Outlining your marketing strategy

Stating your value proposition

Identifying/anticipating potential risks

Seeking investments from banks and other sources

Setting benchmarks, goals and key performance indicators (KPIs)

A business plan also gives you a way to assess the viability of a business before investing too much time or money into it. While all business involves risk, taking the time to create a plan can help mitigate fallout and avoid potentially costly mistakes.

When creating a business plan, it's important to establish your business goals up front and be prepared to spend time researching the market, performing a competitor analysis and understanding your target market .

Download Wix’s free business plan template

Creating a successful business plan is no easy feat. That’s why we’ve put together a simple, customizable, and free-to-download business plan template that takes the guesswork out of getting started. Use it to create a new business plan or to refresh an existing one.

Lean startup versus traditional business plan formats

In terms of types of business plans , there are two main formats to choose from: traditional and lean.

Traditional business plan format

A traditional business plan includes every detail and component that defines a business and contributes to its success. It's typically a sizable document of about 30 to 50 pages that includes:

Executive summary: The executive summary contains a high-level overview of everything included in the plan. It generally provides a short explanation of your business and its goals (e.g., your elevator pitch ). Many authors like to write this section last after fleshing out the sections below.

Company description: A company description should include essential details like your business name, the names of your founders, your locations and your company’s mission statement . Briefly describe your core services (or products if you’re writing an eCommerce business plan ), but don't go into too much detail since you’ll elaborate on this in the service/product section. Wix offers some helpful mission statement examples if you get stuck. It’s also a good idea to create a vision statement . While your mission statement clarifies your company’s purpose, a vision statement outlines what you want your company to achieve over time.

Market analysis: One of the most extensive sections of the business plan, this section requires that you conduct market research and write your conclusions. Include findings for the following: industry background, a SWOT analysis , barriers/obstacles, target market and your business differentiators.

Organization and management: This is where you outline how your business is structured and who's in charge, including founders, executive team members, board members, employees and key stakeholders. To this end, it can be helpful to create a visual layout (e.g., org chart) to illustrate your company structure.

Service or product line: Create a detailed list of your current and future products and services. If you’re still working on your idea, create a concept statement to describe your idea or product. You should also include a proof of concept (POC), which demonstrates the feasibility of your idea. Wherever applicable, include diagrams, product images and other visual components to illustrate the product life cycle.

Marketing and sales: Detail how your business idea translates into selling and delivering your offerings to potential customers. You can start by outlining your brand identity, which includes the colors and fonts you plan to use, your marketing and advertising strategy, and details about planned consumer touchpoints (like your website, mobile app or physical storefront).

Financial projections and funding requests: Include financial statements, such as a balance sheet, profit-and-loss statement (P&L), cash flow statement and break-even analysis. It's not uncommon for a business plan to include multiple pages of financial projections and information. You’ll also want to mention how much funding you seek and what you plan to do with it. If you’ve already secured funding, provide details about your investments.

Lean startup business plan format

A lean startup business plan—also referred to as a “lean canvas”—is presented as a problem/solution framework that provides a high-level description of your business idea. A lean plan is a single-page document that provides a basic overview of the most essential aspects of your business. It’s a good way to dip a toe into business planning since it doesn't require the same level of detail as a traditional plan. This includes:

Problem: What problem does your product or service solve, or what need does it fulfill?

Solution: How do you intend to solve it?

Unique value proposition (UVP): Why should people use your product or service versus someone else’s?

Unfair advantage: What do you have that other companies don’t?

Customers: Who are your ideal customers?

Channels: How will those customers find you?

Key metrics: How do you define success? How will you track and measure it?

Revenue streams: How will your business make money?

Cost structure: What will you spend money on (fixed and variable costs)?

Tips for filling out your business plan template

The hardest part of a journey is always the first step, or so the saying goes. Filling out your business plan template can be daunting, but the template itself is meant to get you over that crucial first hurdle—getting started. We’ve provided some tips aimed at helping you get the most from our template.

These are best practices—they’re not rules. Do what works for you. The main thing to remember is that these tips can help you move more easily through the planning process, so that you can advance onto the next (exciting) step, which is launching your business.

Consider your goals: What is the purpose of your business? Are you looking to expand, launch a new product line or fund a specific project? Identifying your goals helps you prioritize important information in your business plan.

Fill out what you can: You may already have a vague—or specific—idea of what you want your business to achieve. Go through each section of the template and fill out what you can. We suggest leaving the executive summary blank for now, since it'll be the last thing you write.

Be realistic: Even though this document is meant to serve as a marketing tool for potential investors, don't exaggerate any numbers or make any false promises.

Dig into the research: Nothing's more motivating than getting some intel about your competitors and your market. If you're truly stuck, a little research can help motivate you and provide valuable insight about what direction to take your business. For example, if you plan to start a landscaping business, learn about the specific pricing offered in your area so that you can differentiate your services and potentially offer better options.

Get help from others: Bouncing your ideas off a friend, mentor or advisor is a great way to get feedback and discover approaches or products to incorporate into your plan. Your network can also give you valuable insight about the industry or even about potential customers. Plus, it's nice to be able to talk through the challenges with someone who understands you and your vision.

Revise and review: Once complete, step back from your plan and let it "cook." In a day or two, review your plan and make sure that everything is current. Have other people review it too, since having another set of eyes can help identify areas that may be lacking detail or need further explanation.

Once you’ve completed your business plan template, it can become a meaningful resource for developing your mission statement, writing business proposals and planning how to move forward with the marketing, distribution and growth of your products and services.

After launch, you can also analyze your value chain to identify key factors that create value for your customers and maximum profitability for you. This can help you develop a more effective business plan that considers the entire value chain, from research and development to sales and customer support.

Business template FAQ

What is the easiest way to write a business plan.

The easiest way to write a business plan is to utilize a template. Templates provide a structured format and guide you through each section, simplifying the process of creating a comprehensive plan.

Is there a template for how to write a business plan?

Yes. Use Wix’s free business plan template and simply fill in the blanks to customize it to your unique needs. Wix’s business plan template includes seven essential sections, such as an executive summary, market analysis, financial projects and more.

What are the 7 essential parts of a business plan?

Executive summary

Company description

Market analysis

Organization and management

Service or product line

Marketing and sales

Financial projections and funding requests

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Understanding LLC Basics

An LLC, or Limited Liability Company, is a legal structure that combines the simplicity of a sole proprietorship or partnership with the liability protection of a corporation. This setup allows owners, known as members, to benefit from limited personal liability for business debts and actions. It also offers flexibility in management and taxation, as LLCs can opt to be taxed as a sole proprietorship, partnership, or corporation, based on their preferences and circumstances.

Determining If an LLC Is Right for Your Business

Deciding to form an LLC should be a strategic business move. It's suitable for those seeking personal liability protection, tax flexibility, and minimal formalities in running their business. Consider an LLC if you:

• Want protection from personal liability in business dealings.
• Prefer tax options that best suit your financial situation.
• Seek a balance between regulatory requirements and operational flexibility.

Remember, while an LLC offers many benefits, it may not be ideal for businesses planning to seek venture capital or those looking to go public.

Choosing the Best LLC Formation Service

Selecting the right service to form your LLC is critical. Look for a service that offers comprehensive support, including handling paperwork, providing legal advice, and ensuring compliance with state-specific requirements. Here, LLC Geek, a website about everything LLC,  recommends the best LLC formation services that have been thoroughly vetted for reliability and customer satisfaction.

When considering services, especially for those operating in specific states, such as Texas, it's essential to choose a provider well-versed in local regulations and requirements. For Texas entrepreneurs, LLC Geek identified the best LLC services in Texas , ensuring you receive tailored assistance.

State-Specific Considerations in LLC Formation

Forming an LLC isn't a one-size-fits-all process. Each state in the U.S. has its unique set of rules and requirements for LLC formation. For instance, in Texas, the process involves filing a Certificate of Formation with the Texas Secretary of State and adhering to specific state-level taxation rules. Understanding these nuances is crucial for a smooth formation process and ongoing compliance.

We recommend exploring the Business and Non-Profit Forms Texas section on the Texas Secretary of State's website for official forms and detailed information.  

Step-by-Step LLC Formation Process

The process of forming an LLC can vary slightly from state to state, but generally, it involves the following steps:

• Choose a Name for Your LLC: Ensure the name is unique and adheres to state naming requirements.
• Designate a Registered Agent: This is a person or business entity responsible for receiving legal documents on behalf of your LLC.
• File the Articles of Organization: Submit the necessary formation documents to your state's business filing agency.
• Create an Operating Agreement: Although not always required, this document outlines the ownership and operating procedures of your LLC.
• Obtain Necessary Licenses and Permits: Depending on your business type and location, specific licenses and permits may be required.
• File for an EIN and Review Tax Requirements: An Employer Identification Number (EIN) is needed for tax purposes and to open a business bank account.

Each of these steps can involve considerable detail, so it's advisable to consult with a professional service, especially if you are new to the process.

Legal Requirements and Documentation

Legal compliance is a critical aspect of maintaining your LLC. This involves a variety of documentation and adherence to state-specific legal mandates. Key documents include:

• Articles of Organization: The primary document filed with your state to formally establish your LLC.
• Operating Agreement: Outlines the management structure and operating procedures of your LLC.
• Annual Reports: Most states require LLCs to file regular reports to maintain good standing.

Stay vigilant about deadlines and requirements for these documents to avoid legal complications and penalties.

Post-Formation Steps

After successfully forming your LLC, there are several important steps you should take to establish your business's operational and legal foundation:

• Open a Business Bank Account: This is crucial for keeping your personal and business finances separate, a key aspect of maintaining your LLC's liability protection.
• Apply for Business Licenses and Permits: Depending on your industry and location, you may need specific licenses to operate legally.
• Set Up an Accounting System: Proper financial management is essential for tax purposes and operational efficiency.
• Understand and Fulfill Tax Obligations: LLCs have unique tax considerations. Ensure you understand and meet all federal, state, and local tax requirements.
• Obtain Business Insurance: Depending on your business type, certain insurances, like liability insurance, may be advisable or required.

Maintaining Your LLC

To keep your LLC in good standing and ensure ongoing legal and financial health, consider the following:

• File Annual Reports: Most states require LLCs to submit annual reports. Keep track of these deadlines.
• Renew Licenses and Permits: Regularly renew any business licenses or permits.
• Update the Operating Agreement as Needed: As your business grows or changes, update your operating agreement to reflect these changes.
• Keep Business Records Updated: Regularly update records such as minutes from meetings and financial statements.
• Stay Informed on Legal Changes: Laws governing LLCs can change. Stay informed to ensure ongoing compliance.

Forming and maintaining an LLC in 2024 requires careful planning and attention to detail. From understanding the basics to maintaining compliance, each step is crucial for the success and legal health of your business. Remember, while this guide provides a comprehensive overview, the nuances of LLC formation can vary significantly by state and specific business needs.

Copyright © 2023 SCORE Association, SCORE.org

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

How to apply for an LLC (limited liability company)

Considering an LLC for your business? The application process isn't complicated, but to apply for an LLC, you'll have to do some homework first.

Ready to start your business? Plans start at $0 + filing fees.

updated November 17, 2023 · 14min read

Benefits of forming a limited liability company

Steps to apply for an llc, complying with tax and reporting requirements, frequently asked questions.

One of the most important early decisions business owners must make is what business entity to register and conduct business under. There are plenty of business entity types to choose from—a sole proprietorship, C corporation, S corporation, limited liability company (LLC), or limited liability partnership (LLP). What business structure you decide on depends on the risk you're willing to assume.

An LLC is an excellent choice if you are looking for more liability protection than a sole proprietorship can give but are not ready to register as a C corp or S corp. Before you apply for LLC formation, read on to determine if it's right for you.

The most significant benefit of an LLC is limited liability. According to Fareed Kaisani, a Dallas-based Platt Cheema Richmond PLLC attorney, "This means that the owners (also known as members) are not personally liable for the company's debts or legal liabilities."

In addition to personal liability protection, "LLCs also have the option to choose how they are taxed," Kaisani says. "They can be taxed as a sole proprietorship or partnership (if there is more than one member), or they can elect to be taxed as a corporation," resulting in significant tax benefits.

Another benefit is that an LLC is a relatively simple and flexible structure. "Members can be foreign or U.S. individuals, partnerships, trusts, corporations, or other LLCs," explains Bianca Lindau, a Boston-based Caldwell Intellectual Property Law corporate associate.

Foreign entities and local governments can also be LLC members. Insurance companies and banking institutions usually are not allowed to be LLCs. Check the state you'll be conducting business in for additional or different regulations.

Just choosing to become an LLC, however, is not enough. You'll need to delve further into the LLC types to determine which fits your situation. "Owners of an LLC must pick the sort of LLC they want and if they want to participate in daily decisions and operations actively or prefer to be more hands-off," says Martin Gasparian, an attorney and owner of California-based Maison Law.

1. Choose one of the 5 types of LLCs

An LLC is not a one-size-fits-all legal entity. There are several LLC types, one of which can be split into four categories.

Let's break them down. In general, there are:

• Member-managed LLCs. Owners of this type of LLC, known as members, run the company. Only a specific person or group of people can run the company.
• Series LLCs. This type of LLC is structured similarly to a corporation with several subsidiaries. It has a parent or umbrella LLC with one or more sub- or series LLCs underneath. "Each series LLC is separate from the others, and its liability is limited to its assets," Lindau says. Such a structure "allows risk to be segregated within separate entities without the cost of setting up new entities."
• Restricted LLCs. Nevada recognizes this type of LLC. With a restricted LLC, "profits cannot be distributed to the owners for at least 10 years beginning on the date of formation or conversion to the restricted LLC," Lindau says. Often used in Nevada for estate planning, a restricted LLC's main benefit is that profits aren't taxed during those ten years but rather are paid upon distribution at a significantly lower rate due to the valuation discounts.
• Anonymous LLCs. The true identities of the members are not publicly disclosed with this type. States that offer this type of LLC include Delaware, New Mexico, Nevada, and Wyoming.
• Professional LLCs. "This type of LLC is specifically designed for professionals, such as attorneys, doctors, and architects," says Min Hwan Ahn, an attorney and founder of EZ485, which assists people with immigration and visa applications. The protection is the same as other limited liability companies, "but with the added requirement that all members must be licensed professionals in the same field."

Member-managed LLCs get a bit more granular. They can be single- or multiple-member, and members' relations to each other can further categorize the multiple-member. If the members are related, the LLC can be a family LLC. The LLC could be called a general LLC if they aren't related. (Not all states recognize these unique forms of LLC.)

Once you've chosen your form of LLC, you can move on to the next step.

2. Choose a business name

Spend some time thinking about your new LLC's name . Marketing and brand purposes are not the only considerations you must make. There are other important legal considerations as well.

The name of your business will need to include "LLC" in the name. You also must ensure your name doesn't include any restricted words as defined by your state. For example, the words "bank" and "insurance" are commonly restricted by most states. Check your state business office's website for its list of restricted words.

You must also take the time to make sure a name isn't already being used in your state. If your name is available, your state may allow you to reserve the name until you get your documentation filed. In most states, your business name will be automatically registered when you file your articles of organization, so you most likely won't have to register your name separately.

You also don't want to infringe on any existing trademarked names. The Trademark Electronic Search System offers a database of registered trademarks and prior pending trademark applications and is maintained by the U.S. Patent and Trademark Office. This step isn't required, but it's a smart business move. You don't want a name too similar to another business' name.

In addition, you'll want to purchase your business name or some permutation of it as a domain name.

3. Register a DBA name

Once you have your name, you'll have to decide if you want to do business under that name. If you plan to run your company under a name different from your business name, you must register a "doing business as" (DBA) name . Also known as an assumed or trade name, a DBA is a name different from your LLC's officially registered business name. Not all states require a DBA to be registered, so check with your state's business office to determine the process you'll need to follow if you plan to use a DBA name.

4. File articles of organization

To create your LLC, you'll need to file articles of organization with your state. The articles may be called something else in your state, like articles of formation, but they're all the same thing.

Your state's business or filing office will typically have an easy-to-fill-out document you can obtain in-person or online. The information required varies from state to state, but you typically only need to provide the name and address of the corporation owners of your LLC and the names of its members.

Once you've completed the form, file it with your state and the filing fee. The U.S. Small Business Administration maintains a list of links to state business offices on its website. Visit the appropriate state site to obtain more information about the proper place to make your filing and enquire about the required filing fee (if any).

5. Designate a registered agent

This is a requirement in most states. A registered agent , also known as an agent for the service of process, is the person who will receive service of process notices, government correspondence, and compliance-related documents on behalf of your business. The registered agent is typically one of the LLC members.

6. Draft your operating agreement

This document provides a structure for important internal business decisions. Even though it is not required in many states, it is an extremely wise move to have one because it provides clarification on key issues. The operating agreement covers the percentage of ownership among members, voting rights and responsibilities, members' powers and duties, and provisions governing the transfer of members' ownership interests together. Check with your state's business office to see if an operating agreement is required.

7. Publish a notice of formation

Some states require you to publish a notice in your local paper announcing the formation of your LLC. Check with your county clerk or state's business office for information regarding the content of the notice, how many times it must be published, and any other requirements that might apply.

8. Obtain a business license and permit

Most small businesses will need some type of business license or permit. The types of licenses or permits you'll need will depend on both your state and local government requirements and the industry your business is in. Check with your city, county, and state business offices to learn what is required.

9. Obtain an EIN

This is not always required, but many financial institutions prefer Employer Identification Numbers (EINs) over Social Security numbers when opening bank accounts for your business. If you plan on having a business account with any employees in the future, this employer identification number is required for you to have for federal tax purposes. Obtaining an EIN is simple and quick. Go to the IRS website to fill out a short form, and when you submit the form, you'll have your EIN. You can print out the accompanying letter, which will also be mailed to you.

10. Open a business bank account

Once you get your business license, you'll want to open up bank accounts for your business. "Having a separate account for the business is helpful, as this gives one an overview of business income and business expenses, making accounting efforts and financial decision-making easier," Lindau says.

Typically, LLCs have one or more of the following:

• Business checking: Allows for depositing and withdrawing funds, writing checks, and making online transactions. The accounts often have fees, but they also offer various features, such as overdraft protection, merchant services, and credit cards.
• Business savings: This account earns interest on extra funds; although the interest rate is typically lower than personal savings accounts but may offer more benefits for business owners.
• Merchant services: You'll want this account if you want to accept debit or credit card payments. This account allows you to process card payments and directly receive funds in your business checking account.
• Business line of credit (LOC): For short-term financing, a LOC can be handy. It allows your company to borrow funds as needed and pay them back over time like a credit card. A LOC usually requires collateral and has a higher interest rate than other types of loans.

"It's important to shop around and compare the fees, interest rates, and features of different types of bank accounts to find the best fit for your LLC's needs," Kaisani says.

Other things to consider for your LLC

State and local formation and maintenance costs should be considered when forming an LLC. "There are filing fees, state fees, and ongoing costs such as annual reports, taxes, and legal fees," according to Kaisani.

Using the state of Nevada as an example, LLC formation and business filings cost $75. There is a 24-hour expedited fee of $125. Also included in the setup costs are the annual list ($150) and business license ($200). Additional fees apply to have a business in Las Vegas proper or greater Las Vegas. Once the state filing is completed, a general service business would pay $100 for the local business license and $50 for processing, and if the business is home-based, you can add $50. There is no single price for a business license in Las Vegas.

"Another consideration is the recordkeeping involved," Kaisani says. "LLCs are required to maintain proper records and documentation, including the company's operating agreement, financial statements, and meeting minutes," which can be time-consuming and may require the help of a professional, especially for unique, limited partnership situations. “Often, small business owners do not understand the sophistication of what they are trying to accomplish with their company agreement terms. I always recommend consulting with a licensed attorney in your state when considering forming a new company."

If you plan to do business in other states, consider that you'll have to "foreign qualify" in the new state, which means additional fees. "A business owner who has formed an LLC in one state and wishes to grow into another can do so," says Gasparian. "Foreign qualification is the procedure for acquiring authorization to carry on business in the state where they intend to increase the scope of their current corporation's operations." The qualification is necessary when a firm has a physical presence or economic connection to the additional state, reaching a certain income threshold in the new state.

The IRS also has further information on forming limited liability companies.

Business licenses and permits

The required business licenses and permits for your LLC will vary depending on the type of business and the state in which it operates. To obtain business licenses and determine which licenses and permits are necessary, it's essential to research your local and state government regulations and contact the appropriate agencies for guidance.

The costs of obtaining business licenses and permits can range from $25 to several hundred, depending on the license and business location used. Be sure to budget for these expenses as you set up your LLC and ensure that you comply with all applicable regulations.

Lastly, it's essential to ensure that your LLC complies with all relevant tax and reporting requirements to maintain good standing with the state and federal government. This includes filing annual reports, paying state income tax, and potentially paying employer taxes if your LLC has employees.

In this segment, we will highlight the significance of fulfilling state and personal tax return obligations and submitting annual reports, as well as the specific protocols and guidelines one should adhere to.

State tax requirements

State tax requirements for LLCs can vary significantly from one state to another, so it's crucial to familiarize yourself with your state's specific regulations. Some states may require your LLC to pay franchise taxes based on its income or assets, while others may impose additional fees or levies.

To ensure compliance with state tax requirements, it's recommended to consult with a qualified tax professional or research your state's tax laws. This can help you avoid penalties or legal issues arising from non-compliance.

Annual Reports

As part of the ongoing compliance requirements for your LLC, you'll need to file annual reports with the state to provide essential information about your business. The exact due date, filing fees, and forms for annual reports may vary depending on the state, so it's important to familiarize yourself with your state's specific guidelines.

Timely filing of annual reports with accurate information guarantees your LLC's good standing with the state, steering clear of potential penalties, late fees, or even business dissolution.

In conclusion, forming an LLC can be valuable for many business owners looking to benefit from liability protection, tax flexibility, business profits, and increased credibility. By understanding the various aspects of forming an LLC, you can successfully navigate the process and lay a solid foundation for your business.

How much is an LLC in California?

The cost of forming an LLC in California is $85, which includes the filing fee for articles of organization with the Secretary of State and the filing fee for Form LLC-12 (the Statement of Information).

How much is an LLC in Georgia?

Forming an LLC in Georgia costs $100 if you file your paperwork online. The standard processing time for an LLC in Georgia is seven days. However, you can expedite the process to two days for an additional $100 fee. If you need same-day processing, there is a $250 fee. If you prefer to file your paperwork by mail, you can send your completed articles of organization to the Georgia Secretary of State. Processing mail-in paperwork takes approximately 15 days. One-hour processing is available in person for a $1000 fee.

How much is an LLC in Illinois?

The main cost when forming an LLC in Illinois is the $150 registration fee. In addition to the registration fee, you must pay $75 per year to file your annual reports.

How much does it cost to file for an LLC in Virginia?

Forming an LLC in Virginia costs $100, which is paid for the articles of organization to be filed with the Virginia State Corporation Commission. Once approved, your LLC will officially exist.

How do I set up an LLC in North Carolina?

To set up an LLC in North Carolina, choose a name, select a registered agent, file articles of organization, create an operating agreement, and get an EIN.

What is the downside of starting an LLC?

The main downside to forming an LLC is the requirement to dissolve any business assets within it if a member leaves, goes bankrupt, or dies, as well as limited sources of funding and high taxes. In addition, transferring ownership can be challenging, and some states require ongoing fees like annual reports and/or franchise tax fees.

What is the main advantage of forming an LLC?

The main advantage of forming a nonprofit corporation or an LLC is the limited liability protection it provides, protecting members' personal assets from business debts and liabilities.

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How to Write a Business Plan Outline

A step-by-step guide to your best first impression

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Business Plan Outline

• Organize Your Business Plan
• Title Page and Table of Contents
• Appearance Matters

Adrian Mangel / The Balance

Are you an entrepreneur looking to turn your idea into a business? Do you have a business plan? There is some debate about whether new businesses need a business plan when just starting out, especially if they're not asking for money. According to Carl Schramm, author of "Burn the Business Plan," many large corporations didn't have business plans when they first started:

"If you look at all our older major corporations—U.S. Steel, General Electric, IBM, American Airlines—and then you look at our newer companies like Amazon, Apple, Facebook, Microsoft, none of these companies ever had a business plan before they got started."

The U.S. Small Business Administration takes a middle-of-the-road approach, recognizing that not all businesses need a comprehensive plan. Instead, it suggests that smaller businesses and startups use a "leaner" and more streamlined version to outline the essentials and highlight strengths. Lean or long, your business plan should cover the basics.

The outline below offers a brief overview of what each section of your business plan should cover. It is not a definitive guide, as you may wish to expand or combine sections, or add extra detail in a way that is customized to your particular venture. Keep in mind the idea is to present your venture in the most attractive and professional way possible.

Executive Summary

Though it appears first in the business plan, the executive summary is a section that is usually written last, as it encapsulates the entire plan. It provides an introduction and high-level overview of your business, including your mission statement and details about what product(s) and/or service(s) you offer.

Since the executive summary is your business's first impression, it's critical that it be outstanding, especially if you're seeking funding.

Business Description

Provide information about the business you're starting, including what sort of problem your products/services solve and your most likely buyers. You can also expand this description by offering an overview of the industry that your business will be a part of, including trends, major players, and estimated sales. This section should give a positive perspective on your place within the industry. Set your business apart from the competition by describing your or your team's expertise, as well as your competitive advantage.

Market Analysis

The market analysis is a crucial section of the business plan, as it identifies your best customers or clients. To create a compelling market analysis, thoroughly research the primary target market for your products/services, including geographic location, demographics, your target market's needs, and how these needs are currently being met. Your purpose here is to demonstrate that you have a solid and thorough understanding of the people you are planning to sell your products/services to so that you can make informed predictions about how much they might buy, and convince other interested parties.

Competitive Analysis

In preparing to write the competitive analysis section, you'll learn how successful your direct and indirect competitors are in the marketplace. This section of your business plan includes an assessment of your competition's strengths and weaknesses, any advantages they may have, and the unique qualities that make your business stand out from the competition. It also includes an analysis of how you will overcome any barriers to entry in your chosen market.

The primary goal here is to distinguish your business from the competition, but a strong competitive analysis will be able to persuade potential funding sources that your business can compete in the marketplace successfully . A useful tool to help articulate this section of the plan is sometimes referred to as a SWOT analysis, or a "Strengths, Weaknesses, Opportunities, and Threats" assessment.

Sales and Marketing Plan

The sales and marketing section offers a detailed explanation of your sales strategy, pricing plan, proposed advertising and promotion activities, and all the benefits of your products/services. This is where to outline your business's unique selling proposition, describe how you plan to get your products/services to market, and how you'll persuade people to buy them.

When developing your unique selling proposition, your goal is to answer the question: Why should people buy from me over my competition?

Ownership and Management Plan

This section outlines your business's legal structure and management resources, including the internal management team, external management resources, and human resources needs. Include any experience or special skills that each person in your management team brings to the business. If the goal of your business plan is to get funding, it's wise to include an advisory board as a management resource.

Operating Plan

The operating plan offers detailed information about how your business will be run. It provides your business's physical location, descriptions of facilities and equipment, types of employees needed, inventory requirements, suppliers, and any other applicable operating details that pertain to your precise type of business, such as a description of the manufacturing process, or specialty items needed in day-to-day operations.

Financial Plan

Starting a business is usually about making a profit, so it's important to demonstrate that you have a solid sense of your current finances, funding needs, as well as projected income. In the financial section , provide a description of your funding requirements, your detailed financial statements, and a financial statement analysis. This part of the business plan is where you present the three main financial documents of any business: the balance sheet, the income statement, and the cash flow statement, or in the case of a new business, a cash flow projection.

Appendices and Exhibits

In addition to the sections outlined above, at the end of your business plan, include any additional information that will help establish the credibility of your business idea, or bolster your potential success. You may choose to include marketing studies, photographs of your product, permits, patents and other intellectual property rights, credit histories, résumés, marketing materials, and any contracts or other legal agreements pertinent to your business.

How to Organize Your Business Plan

There is no set order to your business plan, the only exception being that the executive summary should always come first. Beyond that, the order depends on your goals.

If your purpose for writing a business plan is to help you organize, gather information, and create a roadmap, organize it in the way that is most intuitive to your process. You might group similar content together, such as all the material relating to markets (industry overview, marketing analysis, competitive analysis, and marketing plan).

If your goal is to seek funding, organize the plan based on what your audience values, and lead with the best, most convincing material first. If you have a stellar group of people serving on your new business's advisory board, put that section directly after the executive summary. Highlighting your new business's strengths will encourage your reader to continue reading your plan.

Add a Title Page and Table of Contents

After completing all the sections, don't forget to insert a title page at the beginning of the plan followed by a table of contents listing each section with page numbers.

The Appearance of Your Business Plan Matters

If you're writing a business plan as an organizational exercise—for your eyes only—feel free to get loose with the style and organization; the simple act of putting all your ideas into a practical template may be a valuable brainstorming tool. However, if you're looking for funding or investors, the business plan is a formal document, so it should look like one. Every aspect of your business plan should impress your potential funding source.

Pay attention to margins and formatting; make sure it's spell-checked and grammatically sound. If you're not good at this, pay a professional to do it.

Hiring a professional to design, edit, or review your business plan may be a good idea, regardless of how skilled you are; a fresh pair of eyes can often spot issues that the original writer missed.

If you need printed copies, get them professionally printed and bound. Keep in mind that you may only have a short amount of time to sell your idea, and first impressions pack a powerful punch.

How Long Should a Business Plan Be?

A good business plan can't be pinned to a minimum or maximum page count. This is because the right length depends on your business. Your business plan should be brief enough to convey the essentials without redundancy or fluff content, yet long enough to demonstrate to your audience that your business is well-researched and fully considered. A simple plan for a modest startup might be around 40 pages, while a more complex business plan may need 100 pages to convey an ambitious financing strategy, product diagrams, industry data, or the full scope of the venture. The goal is to allow for a full explanation of the pertinent information about your business, presented in a concise and well-organized fashion.

Knowledge@Wharton. " Why Creating a Business Plan Is a ‘Waste of Time’ ."

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

Corporate Finance Institute. " Barriers to Entry ."

U.S. Small Business Administration. " SBA Recommended Business Plans and Length ."

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BUSINESS PLAN

_________________________________ (Company Name) ____________________ ____________________ (Company Address) November 19, 2023

Executive Summary

The Company

The Ownership

The Company will be structured as a sole proprietorship.

The Management

The Company will be managed by ____________________.

The Goals and Objectives

The Products

Pricing Strategy

The Company will use an economy pricing strategy.

Last Updated August 30, 2023

What is a Business Plan?

A Business Plan is a fundamental document that every entrepreneur should use to outline their business’s goals and plans to achieve them . It also contains several other aspects of a business’s future agenda and can serve as an internal decision-making tool. A Business Plan is a convenient document for executives to reference, so everyone is on the same strategic page.

In addition to being an internal document, it's also an external document. Using a Business Plan to pitch business proposals to potential investors is a great way to present yourself as credible. In many cases, a Business Plan is considered a prerequisite for banks and investors to provide capital to a new business.

Think of a Business Plan as a self-made guide for managing, operating, and structuring your company.

A Business Plan is also known as a:

• Business Proposal
• Marketing Plan
• Business Strategy

Marketing Strategy

For a more succinct version of our Business Plan, please use our One Page Business Plan Template . 

Who needs a Business Plan?

Anyone with a new or existing business should have a Business Plan to map out their company's goals and strategies. Sole proprietors, general partners, limited liability company (LLC) members, and even corporations will find a Business Plan useful.

When should I use a Business Plan?

A Business Plan is essentially a planning and educational tool. You can use it when you need to build the framework for your new or existing enterprise and set goals for your business. For example, you can use it when:

• Launching a company
• Transitioning from freelancing to owning a small business
• Improving your current business

A Business Plan can also be used to help secure funding from investors. You can use your Business Plan as a way to present your ideas, sales projections, and plans for achieving your objectives.

What does a Business Plan include?

A Business Plan considers nearly every aspect of a company and how each decision might affect those aspects. Take some time to think about these eight essential factors before drafting your Business Plan:

Business Description and Mission Statement

Summarize your business's history, ownership, and mission or vision statement. Outline how your business resolves problems for its customers. If possible, specify the businesses and consumers you expect to serve. Don't be afraid to boast about what gives you a competitive advantage.

Competitors Analysis

Describe your competition and how you plan to compete against their current strategies. Try to imagine what's in their Business Plan.

Summarize your company with an overview of your company's management structure, a description of your product or service, your goals, and a summary of your finances and marketing strategy.

Financial Plan

Your financial plan may include your company's income (profit and loss) statements. It can also encompass your capital requirements if you pitch your ideas to investors. In that case, you may describe the investment amount you require and how you plan to repay this capital in a repayment plan.

Your marketing strategy is how you plan to get your product or service in front of customers. This section of the business plan is where you can include your ideas for promotions (online or traditional methods), as well as how you physically plan to sell your product or service (brick-and-mortar, e-commerce, etc.).

Operations Overview

An operations overview provides a glimpse into your business's daily operations, including the management and staffing structure, human resources plan, your physical operational facility, and your production methods, such as quotas or manufacturing details.

Product or Service Details

Break down what your product or service is, its unique features, any patents you may have , and any future products you want to develop. Think about how your product or service benefits your target customer.

SWOT stands for "Strengths, Weaknesses, Opportunities, Threats." A SWOT analysis evaluates these specific aspects of your business.

How long should a Business Plan be?

There isn't a catch-all answer to this question. The length of your Business Plan depends on how many factors you want to consider and how you intend to use your plan . It can be as straightforward or as comprehensive as you'd like.

The more you put into it, the more your business may get from it because there’s a clear strategy for you to follow.

Suppose you intend to use your plan as a business proposal to enlist investor funding. In that case, it is recommended that you have a more detailed plan.

How do I write a Business Plan?

LawDepot's online Business Plan template allows you to customize a document specifically to your business's needs and guides you through the process.

Use complete sentences when you’re completing LawDepot’s Business Plan questionnaire. Your answers will be inserted directly into your document.

1. State the industry your business operates in

Start your Business Plan by stating in which industry your company is operating.

Your choices include:

• Arts, entertainment, and recreation
• Construction
• Food and accommodation
• Professional services

If your business is in an industry not listed above, select "Other" and manually tell us the type of industry.

2. Provide company details

Next, state whether this Business Plan is for a new or existing company. Your choice will affect the wording of your document. 

Company structure

Use your Business Plan to outline details about the company’s structure. There are multiple types of company structures you can choose for your business. The one you ultimately select will come down to the size and goals of your company and how you want it to operate at the top:

• Sole proprietorship : A single individual is fully and personally responsible for all the debts and obligations of the company.
• Partnership : Two or more people share in the profits and losses of the company.
• Corporation : The company itself is a legal entity with the same rights and obligations as a real person. Shareholders have limited liability for any of the company's losses or obligations.
• Limited Liability Company (LLC) : A business entity that enjoys the attractive features of both a partnership and a corporation. It is similar to a corporation because the individual member's liability exposure is limited to what each member has invested in the business. In addition, an LLC can be structured to be taxed only at one level, similar to a partnership.

Company details and background

Include basic information like the business' name, address, city, state, and ZIP Code.

Some entrepreneurs like to include the company's background in their Business Plan. Although it isn't always necessary, it can be valuable information for potential investors during a pitch meeting.

Include how long your company has been operating and how it's grown since the beginning. Also, describe any evolutions to your product or service. If your company is a startup, feel free to say what inspired you to start the company.

Company goals

Company goals are essential to your Business Plan because they outline your goals and how you plan to achieve them.

Describe what you think your company can reasonably accomplish in the short term (12 months) and long term (five years). Include sales forecasts and market share growth.

Next, describe your plans for reaching those accomplishments. Include strategies for securing funding, hiring employees, and producing new products and services.

3. Describe your products or services

Describe your products or services and what they do for the customer. For example, if you own a restaurant, explain what makes your menu special. If you're selling a product, detail what makes it better than the competition.

Also, include any trademarks, patents, or licenses you possess in your Business Plan.

If your company already has plans for new or improved products, potential investors will likely want to hear about them too. 

4. Outline your pricing and advertising strategy

Every company needs a pricing and advertising strategy. The more detailed your plan is, the better your chances are of reaching your target audience and hitting your goals.

The price of your products or services will play a large part in who your customers are and how people will perceive the quality of your business.

If you're selling luxury items, your prices will be higher than if you're selling items to a broader range of people. You must also consider what kind of profits you want to make and what's possible in your industry.

Advertising

Advertising is how you'll reach your target customers. It's also an opportunity to establish your company's brand. Consider how you plan to advertise (e.g., email marketing, newsletters, website, Google Ads, social media, print advertisements, television, radio, etc.) and how your customers will find you. Make sure to keep your budget in mind as well.

5. Describe your customers and competitors

Take time to provide the essential information about your business's customers and competitors.

Your target market is the group of customers you're trying to sell your products or services to. The marketing strategy should be designed to make your company as appealing and accessible as possible to this group.

Use your Business Plan to describe who you want your customers to be. Consider their age, location, and income. Your customer also doesn't need to be a single person. Perhaps it's other businesses.

If you already have established customers and are creating a new Business Plan, include a description of them.

Competitors

Having a finger on your competition's pulse goes a long way toward creating an effective marketing strategy for your company. It lets you know what they're doing right and how you can match or exceed them, what they’re doing to steal your customers, and the standard you need to rise above to be more successful.

Describe who your competition is and which one is the biggest competitor. If possible, also include their market share and annual revenue.

Also, consider it your business's location gives it a competitive advantage.

6. Provide a SWOT analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

A SWOT analysis is a planning method entrepreneurs use to identify and quantify the critical issues in a prospective business. The purpose is to aid in predicting viability and to help bring strategic focus. By objectively identifying yourself among your competitors, you can position your company to compete successfully in your market.

Common strengths to describe in your Business Plan include:

• Unique technology or products
• Patents or licenses in your possession
• The location of your business
• The expertise of owners or management
• The quality of your products or services

Common weaknesses to describe in your Business Plan include:

• Risks of development or production delays
• Products are quickly becoming outdated
• Production technology is quickly becoming outdated
• Higher costs than your competitors
• A lack of marketing expertise
• High staff turnover
• Poor business location
• Weak or damaged reputation

Opportunities

Common opportunities to describe in your Business Plan include:

• An increase in your product’s demand in the future
• Expanding your market share
• Expanding your product line
• Other marketing channels

Common threats to describe in your Business Plan include:

• New competitors easily entering your market
• Larger competitors undercutting your pricing
• Undependable labor market
• Undependable suppliers
• A risk of being legislated out of business
• New or increased taxes
• Decreased demand in the future

7. Outline operational details

Provide a breakdown of your company’s operations. This can include:

• Facilities : The facility’s location and size, any required renovations, and when it’s available for use.
• Suppliers : Who the suppliers are and their dependability, where they’re located, how many years they’ve been in business, and who your backup suppliers are.
• Day-to-day operations : What a typical day looks like for your business.

8. Summarize finances and assets

Summarize your company’s finances and assets by providing the following information:

Company assets

Using complete sentences, describe your company’s assets.

Consider whether the company owns or leases any land, buildings, or manufacturing equipment. The company may also own fixtures and fittings, inventory or stock-in-trade, cars, trucks, or other commercial vehicles. Provide an approximate resale value of each asset.

Capital requirements

Capital requirements refer to what you need to spend money on and how much money you need to make it happen. Outline how much your company's owners have invested, the amount you need to borrow, and how you'll spend the money.

Income statement

An income statement, also called a profit and loss statement, shows how much money your company has made over a specific period. Break down your gains, losses, and expenses in your Business Plan.

Examples of expenses include rent, utilities, insurance, employee salaries, benefits, etc.

9. Provide information about personnel

To complete your Business Plan, provide the following information about yourself and the other owner(s), management, and staffing requirements.

Provide the names of all your business's owners and any relevant training or experience. Each type of business has a different name for its owners:

State who is in charge and how your company makes decisions. In small companies, the owner and manager are often (but not always) the same person. However, large company owners are more likely to delegate day-to-day responsibilities to a hired manager who specializes in a company's products or services.

Staffing requirements

If necessary, you can describe your business's staffing requirements. For example, you can outline how many skilled laborers, general laborers, and management personnel you need to hire.

How often should I update my Business Plan?

Your Business Plan should be a working document that you consistently refer to and periodically revise as your situation and goals evolve. Whether this is once a year or every quarter, it's essential to adjust your plan as necessary , so it always reflects your business's current and future direction.

Updating your plan keeps your company and employees focused on the same goals. It may even enliven your business as you hit milestones and work towards achieving new ones.

Related documents:

• Partnership Agreement : Set the terms of their working relationship between general partners
• LLC Operating Agreement : Map out company rules and the rights and responsibilities of an LLC’s members
• Articles of Incorporation : File this document with the government to form a corporation
• Purchase of Business Agreement : Purchase all assets or shares of a company from an individual or corporate party
• Risk Management Plan : Identify, evaluate and mitigate risks that impact your business.

Related articles:

• 15 Best States for Employers in 2023
• Employees vs. Independent Contractors
• Legal Names Versus Trade Names in Business

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550+ Business Plan Examples to Launch Your Business

Need help writing your business plan? Explore over 550 industry-specific business plan examples for inspiration. Go even further with LivePlan , which harnesses AI-assisted writing features and SBA-approved plan examples to get you funded.

Find your business plan example

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Business plan template: There's an easier way to get your business plan done.

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Finish your plan faster with step-by-step guidance, financial wizards, and a proven format.

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Example business plan format

Before you start exploring our library of business plan examples, it's worth taking the time to understand the traditional business plan format . You'll find that the plans in this library and most investor-approved business plans will include the following sections:

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally only one to two pages. You should also plan to write this section last after you've written your full business plan.

Your executive summary should include a summary of the problem you are solving, a description of your product or service, an overview of your target market, a brief description of your team, a summary of your financials, and your funding requirements (if you are raising money).

Products & services

The products & services chapter of your business plan is where the real meat of your plan lives. It includes information about the problem that you're solving, your solution, and any traction that proves that it truly meets the need you identified.

This is your chance to explain why you're in business and that people care about what you offer. It needs to go beyond a simple product or service description and get to the heart of why your business works and benefits your customers.

Market analysis

Conducting a market analysis ensures that you fully understand the market that you're entering and who you'll be selling to. This section is where you will showcase all of the information about your potential customers. You'll cover your target market as well as information about the growth of your market and your industry. Focus on outlining why the market you're entering is viable and creating a realistic persona for your ideal customer base.

Competition

Part of defining your opportunity is determining what your competitive advantage may be. To do this effectively you need to get to know your competitors just as well as your target customers. Every business will have competition, if you don't then you're either in a very young industry or there's a good reason no one is pursuing this specific venture.

To succeed, you want to be sure you know who your competitors are, how they operate, necessary financial benchmarks, and how you're business will be positioned. Start by identifying who your competitors are or will be during your market research. Then leverage competitive analysis tools like the competitive matrix and positioning map to solidify where your business stands in relation to the competition.

Marketing & sales

The marketing and sales plan section of your business plan details how you plan to reach your target market segments. You'll address how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success.

The operations section covers the day-to-day workflows for your business to deliver your product or service. What's included here fully depends on the type of business. Typically you can expect to add details on your business location, sourcing and fulfillment, use of technology, and any partnerships or agreements that are in place.

Milestones & metrics

The milestones section is where you lay out strategic milestones to reach your business goals.

A good milestone clearly lays out the parameters of the task at hand and sets expectations for its execution. You'll want to include a description of the task, a proposed due date, who is responsible, and eventually a budget that's attached. You don't need extensive project planning in this section, just key milestones that you want to hit and when you plan to hit them.

You should also discuss key metrics, which are the numbers you will track to determine your success. Some common data points worth tracking include conversion rates, customer acquisition costs, profit, etc.

Company & team

Use this section to describe your current team and who you need to hire. If you intend to pursue funding, you'll need to highlight the relevant experience of your team members. Basically, this is where you prove that this is the right team to successfully start and grow the business. You will also need to provide a quick overview of your legal structure and history if you're already up and running.

Financial projections

Your financial plan should include a sales and revenue forecast, profit and loss statement, cash flow statement, and a balance sheet. You may not have established financials of any kind at this stage. Not to worry, rather than getting all of the details ironed out, focus on making projections and strategic forecasts for your business. You can always update your financial statements as you begin operations and start bringing in actual accounting data.

Now, if you intend to pitch to investors or submit a loan application, you'll also need a "use of funds" report in this section. This outlines how you intend to leverage any funding for your business and how much you're looking to acquire. Like the rest of your financials, this can always be updated later on.

The appendix isn't a required element of your business plan. However, it is a useful place to add any charts, tables, definitions, legal notes, or other critical information that supports your plan. These are often lengthier or out-of-place information that simply didn't work naturally into the structure of your plan. You'll notice that in these business plan examples, the appendix mainly includes extended financial statements.

Types of business plans explained

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. To get the most out of your plan, it's best to find a format that suits your needs. Here are a few common business plan types worth considering.

Traditional business plan

The tried-and-true traditional business plan is a formal document meant to be used for external purposes. Typically this is the type of plan you'll need when applying for funding or pitching to investors. It can also be used when training or hiring employees, working with vendors, or in any other situation where the full details of your business must be understood by another individual.

Business model canvas

The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

The structure ditches a linear format in favor of a cell-based template. It encourages you to build connections between every element of your business. It's faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan . This format is a simplified version of the traditional plan that focuses on the core aspects of your business.

By starting with a one-page plan , you give yourself a minimal document to build from. You'll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan.

Growth planning

Growth planning is more than a specific type of business plan. It's a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, forecast, review, and refine based on your performance.

It holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27 minutes . However, it's even easier to convert into a more detailed plan thanks to how heavily it's tied to your financials. The overall goal of growth planning isn't to just produce documents that you use once and shelve. Instead, the growth planning process helps you build a healthier company that thrives in times of growth and remain stable through times of crisis.

It's faster, keeps your plan concise, and ensures that your plan is always up-to-date.

Download a free sample business plan template

Ready to start writing your own plan but aren't sure where to start? Download our free business plan template that's been updated for 2023.

This simple, modern, investor-approved business plan template is designed to make planning easy. It's a proven format that has helped over 1 million businesses write business plans for bank loans, funding pitches, business expansion, and even business sales. It includes additional instructions for how to write each section and is formatted to be SBA-lender approved. All you need to do is fill in the blanks.

How to use an example business plan to help you write your own

How do you know what elements need to be included in your business plan, especially if you've never written one before? Looking at examples can help you visualize what a full, traditional plan looks like, so you know what you're aiming for before you get started. Here's how to get the most out of a sample business plan.

Choose a business plan example from a similar type of company

You don't need to find an example business plan that's an exact fit for your business. Your business location, target market, and even your particular product or service may not match up exactly with the plans in our gallery. But, you don't need an exact match for it to be helpful. Instead, look for a plan that's related to the type of business you're starting.

For example, if you want to start a vegetarian restaurant, a plan for a steakhouse can be a great match. While the specifics of your actual startup will differ, the elements you'd want to include in your restaurant's business plan are likely to be very similar.

Use a business plan example as a guide

Every startup and small business is unique, so you'll want to avoid copying an example business plan word for word. It just won't be as helpful, since each business is unique. You want your plan to be a useful tool for starting a business —and getting funding if you need it.

One of the key benefits of writing a business plan is simply going through the process. When you sit down to write, you'll naturally think through important pieces, like your startup costs, your target market , and any market analysis or research you'll need to do to be successful.

You'll also look at where you stand among your competition (and everyone has competition), and lay out your goals and the milestones you'll need to meet. Looking at an example business plan's financials section can be helpful because you can see what should be included, but take them with a grain of salt. Don't assume that financial projections for a sample company will fit your own small business.

If you're looking for more resources to help you get started, our business planning guide is a good place to start. You can also download our free business plan template , or get started right away with LivePlan .

Think of business planning as a process, instead of a document

Think about business planning as something you do often , rather than a document you create once and never look at again. If you take the time to write a plan that really fits your own company, it will be a better, more useful tool to grow your business. It should also make it easier to share your vision and strategy so everyone on your team is on the same page.

Adjust your plan regularly to use it as a business management tool

Keep in mind that businesses that use their plan as a management tool to help run their business grow 30 percent faster than those businesses that don't. For that to be true for your company, you'll think of a part of your business planning process as tracking your actual results against your financial forecast on a regular basis.

If things are going well, your plan will help you think about how you can re-invest in your business. If you find that you're not meeting goals, you might need to adjust your budgets or your sales forecast. Either way, tracking your progress compared to your plan can help you adjust quickly when you identify challenges and opportunities—it's one of the most powerful things you can do to grow your business.

Prepare to pitch your business

If you're planning to pitch your business to investors or seek out any funding, you'll need a pitch deck to accompany your business plan. A pitch deck is designed to inform people about your business. You want your pitch deck to be short and easy to follow, so it's best to keep your presentation under 20 slides.

Your pitch deck and pitch presentation are likely some of the first things that an investor will see to learn more about your company. So, you need to be informative and pique their interest. Luckily, just like you can leverage an example business plan template to write your plan, we also have a gallery of over 50 pitch decks for you to reference.

With this gallery, you have the option to view specific industry pitches or get inspired by real-world pitch deck examples. Or for a modern pitch solution that helps you create a business plan and pitch deck side-by-side, you may want to check out LivePlan . It will help you build everything needed for outside investment and to better manage your business.

Get LivePlan in your classroom

Are you an educator looking for real-world business plan examples for your students? With LivePlan, you give your students access to industry-best business plans and help them set goals and track metrics with spreadsheet-free financial forecasts. All of this within a single tool that includes additional instructional resources that work seamlessly alongside your current classroom setup.

With LivePlan, it's not just a classroom project. It's your students planning for their futures. Click here to learn more about business planning for students .

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