prepare a bankable business plan for a private limited company

How to Write a Winning Bankable Business Plan in 2024

What is a business plan, who needs a business plan, why do i need a business plan, how to make a business plan template, how can i write a business plan, 1. executive summary, 2. company overview, 3. market analysis, 4. marketing plan, 5. operational/production plan, 6. organizational and management plan, 7. financial plan, 8. business risks and swot analyses, 9. appendix, 10. business model canvas, business plan writing, revising your business plan, hire a professional for writing a business plan.

Some fail because they don’t have a business plan. Others should have done better with it. In 2024 and beyond, you need to have a solid plan for your business; I mean, a bankable business plan.

We have seen a lot of fallen heroes in the past. They fell with their businesses due to a lack of plans and quality strategies. When it comes to business, I never welcome overconfidence. I will show you how to write a business plan that matches the future.

If you don’t aim it, you can’t hit it Onifade Azeez

A business plan is a written document that summarizes the details of a business including the nature of the product, target market, marketing strategies, and financial projections. Whether it’s to provide direction, seek a loan, or attract investors, a business plan is vital for the success of your organization. A business plan is an indispensable business tool for every startup.

It shows a company’s goals and the way it plans to realize them. It also contains several other aspects of a company’s future agenda and may function as a tool for decisive decision-making or as a business proposal to pitch for funding purposes. Every business must have a written Business plan. Let’s check Wikipedia ‘s definition.

A  business plan  is a formal document containing the goals of a business, the methods for attaining those goals, and the time frame for the achievement of the goals. It also describes the nature of the business, background information on the organization, the organization’s financial projections, and the strategies it intends to implement to achieve the stated targets.

Those who are 

• Starting a new business from scratch
• Who have an existing business with the aim of expanding 
• Sole proprietors
• Partnerships
• Limited Liability Company (LLC) members

A Business Plan is a planning tool. It will often build a framework for your new or existing enterprise and align goals for your business.

It also can be employed by your startup as how to present your ideas, sales projections, and plans for achieving your objectives to potential investors for funding purposes.

Ultimately, whether you propose to launch a corporation, transition from being a freelancer to a little business owner, or wish to recreate, improve, and organize your current business, it may be a helpful document for steering your business forward and informing others of your plans.

A Business Plan helps you generate new ideas for decision-making. It also gives you an action plan after a reality check. In short, a bankable business plan is a must for any successful aiming business .

Begin with a clear idea of the target niche for your template. Since the Business plan template will be used across the chosen niche, you need to do well-detailed and generalized research. You will follow the steps to write a business plan that will be discussed below, after which you will write one. The written template can later be modified to your client’s taste or to suit the purpose of another business venture entirely. Moreover, identifying your audience allows you to establish the language you’ll need to convey your ideas, as well as the level of detail you’ll need to provide to enable readers to complete due diligence.

It’s alright, this is how to write a business plan; Writing a Business plan is easy and also tasking at the same time. All you have to do is follow these simple steps. A business plan format and its organization determine what section will be included. Let’s have a glance:

• Executive summary
• Company Overview
• Products and services description
• Market analysis
• Marketing Plan
• Operational/Production plan
• Organizational and management plan
• Financial plan
• Business risks/SWOT Analyses
• Business Model Canvas

Moreover, the last 2 are optional. We want to take them one after the other. Points stated under each section should be used as subsections.

But wait! You can make money with this skill even if you don’t have a business by writing for people or teaching people how to write.

What is the business plan outline?

Summarize the company profile, problem, solution, product/service, competitive edge, market potential, financials, management, vision, and conclusion. It is a general overview of your business. Anyone who reads it should be able to make a decisive decision about your business I will advise you to write this section last since it is the summary of all.

Here, You will write concisely about the Business description, Target market, Vision and Mission Statement, Goals, and objectives, including your Current milestones if it is an existing business. Goals can include both short-term goals and long-term goals.

This section should include the Industry analysis, Potential challenges and how to handle them, Opportunities, Competitive Analysis, and Effect on the local and national/international economy.

Before you start writing a business plan. You ought to have done a strategic market survey and feasibility study It will help you have a smooth Marketing strategy. In this section, you want to write about Promotional strategies Distribution strategies or sales methods.

The existing Office location description or proposed office locations should be written and discussed. Other subsections include a list of consumables Equipment, Capital Expenses of Production/Services, Process technique or methodology, pricing strategy, Proposed/Existing price list, and Record/stock control process.

The human effort behind your organization should be made known. That is why you have to write about the Ownership of the business, the Promoter profile and management team, details of employees, and details of the salary schedule.

The Promoter, which might also be the founder or a sole proprietorship Identity, should be revealed. Details like full name, Address, academic or professional qualifications with a valid means of Identification.

Majorly, assumptions and financial projections. In other words, you have to be realistic when writing this section. The Present worth and Asset Valuation will be discussed as well. Expansion capital estimation for existing business and give loan details if your business will survive on loan.

Financial projections are necessary for any business, whether it’s a start-up or an established company. They are the key to success for any company because they provide an overall view of where the business is now, where it is going, what its needs are, and how to make sure the company will be profitable in the future.

Financial projections may seem difficult to create at first glance, but there are plenty of free templates available online that can be modified depending on your personal preference.

Business risks and mitigation; Highlight, the risks and possible ways of reducing or eliminating them

SWOT (Strength, weakness, opportunities, and threat) ; Write about them one after the other, but make sure your strength is always more than your weakness. Note: You must have at least a weakness and a threat.

You want to attach additional documents or sheets to your business plan. Especially documents that have to do with financial analyses.

It is a tool that helps you put your business on one page. It can be called the one-page business plan, See the example below.

• Keep it short
• Make it simple to read
• Divide your content into sections
• Use high-quality design and printing

When confronted with challenging problems, conducting additional research and changing your approach may give solutions. As time goes on, the need to revise your business plan could arise. It’s a good idea to examine your business plan regularly even before that time comes, especially if you’re planning to expand or to adjust to meet a long-term goal. So you have to Refocus, Realign, and Repurpose your plan.

You most likely established your unique business and personal goals when you developed your original business plan. Take some time now to evaluate and see if you’ve met your objectives. A need to refocus might arise.

Check your instincts to see whether all of your hard work is still aligned with your initial aims and mission statement. Are they still in use? Have you forgotten about the broader picture?

Consider packaging your existing products or services differently if your time is being spent on little tasks instead of actual development and establishing a lucrative customer base.

You may like to read: How Social Media Marketing Agency Can Boost Your Business

Key marketing, production, and financial challenges differ amongst businesses. Their plans must depict these differences, highlighting relevant areas.  Understand that investors see a plan as a reflection of the goals and personalities of the company and its management. They will be turned off by a plug-and-play, fill-in-the-blanks business plan to even worsen the situation, a computer-generated plan. That is why business plan template software should be discouraged.

Instead of looking inside to see what suits you best, write your plan with an eye outside to your major audiences. You will save time and energy this way, as well as increase your chances of attracting investors and clients to your side. Investors are uncomfortable with poorly drafted documents. You want your business plan to be as appealing and easy to read as feasible.

Creating a business plan might be done with a business plan template, by self-writing, or by hiring a professional. Get the best Business Plan Writing and Business Proposal . Contact Onifade Azeez via [email protected]

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Limited Company Help

How to set up a limited company in the UK

How to write a business plan for your limited company

A good business plan sets out what you want to achieve and how you intend to make it happen in clear and simple terms. It doesn’t have to be a hefty document and definitely shouldn’t be long-winded, especially if you’re trying to persuade your bank to fund your limited company, attract new investors, or motivate staff.

So, what are the core elements of a business plan, thinking in particular about start-ups or small businesses, and what format should it take?

Scroll down for 10 business plan mistakes every limited company owner should avoid!

What every business plan needs

For a business plan to be credible – and not come across as mere wishful thinking – it has to contain some essential information about your business. Most business plans should include the following:

• An overview of your business, stating what you do and what, if anything, makes you different. If you have a unique selling point, be sure to say what is.
• Define your goals in concrete terms. What do you want the business to achieve?
• Define your audience and the market. Show you understand who your clients or customers are and how they will access your product or services. State how the market operates and where you see your place in it, in terms of your products and pricing.
• Provide basic financial details about set-up costs, production and operating costs, and where investment is coming from. What is the break-even point for your business? Include both short and long-term goals.
• Who is on your team? People are key to the success of every business so describe your team, briefly mentioning collective experience and skills and the passion you share for the business.

Depending on your type of business, you may also want to include a marketing plan, advertising strategy or full-blown SWOT analysis, but remember to stick to the point and be brief.

Benefits of writing your business plan

Writing a business plan is not just for the benefit of would-be investors or your bank manager, but is a useful process in itself. It will help you to identify and articulate your objectives more clearly and identify what the challenges are and how you may overcome them.

By stating your short-term and long-term goals you’ll have to consider how you will measure and demonstrate progress. Writing a business plan forces you to be proactive and can be a strong statement of intent that will help to keep you on track going forward.

Choose a format and style that suits

A business plan doesn’t have to be just a bunch of facts and figures or be presented in a traditionally linear format. If you’re a start-up involved in design or one of the creative industries, for example, let this shine through in your business plan by choosing a format that reflects your creativity.

By all means uses images, charts, and infographics as well as words, whatever helps to get your message across so long as the information is easily understood.

Remember, your business plan has to be shareable by lots of different individuals, so keep it simple and use plain English, avoiding jargon, or the latest buzz words .

How to use your business plan

A business plan is not simply to clarify your ideas before launching or to help secure funding for your venture, but can play a key role in how you run and understand your business on a day-to-day basis. You can use your business plan to compare actual results with the original forecasts you made, to see if you’re on track and whether you need to revise your goals in any way.

Were you right about how customers would access your products or services, or understand your brand, and do you have to develop new strategies? Check your business plan regularly to chart your progress.

The business plan can be amended or adapted in response to change, for example, if the market reacts to external influences, or the competition is doing something different. Your business plan can also serve as a kind of manifesto that you choose to display prominently for staff to see.

There is no single right way to produce a great business plan but there are a few definite things to avoid at all costs.

Steer clear of the following ten common mistakes and you’ll increase your chances of convincing potential investors that you really do mean business.

10 business plan mistakes to avoid

1. it’s not all about you.

Your personal attributes are important and may be key to driving the business forward but prospective investors are more interested in the specifics of the project. Instead of promoting your expertise, dreams or past successes, focus your business plan on delivering answers and addressing any areas of concern your potential backers may have.

2. State your objective

Don’t neglect to give individuals a reason to invest in your project or business. Be specific about what they can expect to get back in return and what your objective is for the business going forward. If you want to build up the business to sell it, then say so; if this is a one-off project or part of a long-term strategy, make that clear to investors.

3. Don’t inflate the numbers

Even if you believe your business will enjoy exponential growth, be sensible when it comes to throwing in numbers. Show you’re a strategic thinker by rounding up revenue forecasts and be realistic about what you believe can be achieved in one, two, or three years down the line.

4. Market research

Your project is not an aspiration but a well-thought-out plan based on solid market research. Data from a Google search won’t cut it, so show you’ve done your homework and understand how the market works, where the need for your products or service exists and the niche or gap you aim to fill.

You may have a great idea but you have to convince investors there’s a real demand for it. For example, if you’ve tested it on the market, explain briefly how well your product was received.

5. Don’t forget your USP

Don’t forget to say what it is that makes your business special. If you have a unique selling point, say what it is and how this differentiates you from what your competitors are doing. If what you have to offer is an improvement or iteration of what already exists, say how this will give you an advantage.

6. Don’t dismiss the competition

Even if you have an exceptional and unique product, you’re likely to have some competition – if not now, then in future. Don’t try and pretend otherwise or dismiss the competition.

Backers will be more interested in seeing that you’ve considered how competitors may react, what this could mean for your business, and what your strategy will be in response.

7. What are the risks?

There are always risks in every venture. It’s important that you show potential investors that you have considered what these are, including market demand, competition, resources, supply lines, etc., and how you would deal with a worst-case scenario. Of course, the flip side of risk is reward so don’t neglect to articulate the potential for growth by using simple graphics, where possible.

8. Don’t underestimate the resources you need

As a start-up, you may be operating from home and have fairly modest overheads, but as your business grows, you will need more resources.

Don’t neglect to factor in future costs to cover moving to bigger premises, buying new equipment, taking on staff, paying suppliers, consultant fees, and any other expenses you may incur in order to achieve the kind of growth you predict.

9. Serious investors aren’t naïve

Remember, serious investors will carry out due diligence before deciding to put money into your business, so make sure you are totally honest with them at all times. Don’t be tempted to exaggerate what the business can achieve or has already achieved to date. By all means, be positive in your predictions but never try and mislead investors.

10. Keep your business plan up-to-date

You may be lucky and get the backing you need at the first attempt but getting your business off the ground could take some time. It’s important to keep abreast of what’s going on in the market and change or adapt your business plan as required. Presenting a plan that doesn’t reflect the current market or business environment will make you look out of touch and could scupper your chances of attracting investors.

Downloadable Business Plan Templates

Free business plan templates are also widely available including from GOV.UK . Also, try templates from StartupLoans and The Prince’s Trust .

Tax-efficient protection for directors

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Related guides:

• How to choose a suitable limited company name
• Set up a limited company – options and costs
• What are a company’s statutory registers?
• Who can become a limited company director?
• Forming a company – what is a SIC code?

Private Banking Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Financial Service Industry » Bank

Do you want to start a private banking service and need to write a plan? If YES, here is a sample private banking business plan template & feasibility report.

Whether you have decided to enter the financial markets directly as part of your integral business plan, are a smaller private financial institution that has outgrown your licensing boundaries, or are experiencing operational inefficiencies or restrictions with your current financial license, you are likely wondering how to move forward and start a private bank.

When you start a bank, your financial company will have an almost limitless array of possibilities to take advantage of. Financial companies in different situations (including FX, wealth managers, family offices, IB, M&As, FAs, IAs, payment processors, or fund managers) will at some point in their lifecycles find it necessary or desirable to grow beyond their current licensing limitations.

For many such businesses, the natural way to move forward is to obtain or apply for a bank license or register a new private bank from the ground up. Private Banks raise capital through a private stock offering to accredited individuals who meet onerous financial requirements related to their net worth and annual income.

Although privately-held bank stock is not publicly traded, there often is a healthy secondary market for it, engineered by boutique investment banks that focus on small bank stocks and even new hedge funds that invest in de novo banks.

Private Banks earn high returns on assets and equity, and typically are managed conservatively by executives with strong ties to the business community. A small number of non-accredited investors, usually people with personal relationships with insiders, are allowed to participate in the stock offering as well.

The apex control for private banks are the Board of Directors, who appoint the bank’s executive management and oversee the regulatory compliance function. Note that this requires monitoring capital adequacy levels and ensuring the bank never deviate from the FDIC-approved business plan.

If the bank’s directors want to make changes to the bank’s funding structure or expand lending activities, prior approval must be obtained from the FDIC. Regulators typically require that de novo banks exceed capital requirements, understanding that it often takes roughly three years for new banks to achieve profitability.

In the united states, Deposit Insurance Corporation membership is mandated for all banks, and all FDIC requirements must be attained before the new bank commences operations. The Interagency Charter and Federal Deposit Insurance Application must be filled, submitted and shared by the FDIC with all relevant regulatory bodies.

Coupled with the application, the applying bank must submit a mission statement, a business plan containing three years of projected financial statements, and policy descriptions for loans, investments and other bank operations. Note that completing these requirements can take hundreds of hours, and often requires engaging financial consultants.

A Sample Private Banking Business Plan Template

1. industry overview.

In recent years, private banks have experienced a period of growth. For many universal banks, the segment has therefore become undeniably crucial. At the same time, a closer analysis of financial results and the major drivers of sector performance points to some fundamental challenges in growing the top line.

Nevertheless, few banks have outperformed the competition and offer some best practice examples. According to reports, any growth in assets under management (AuM) generated by private banks over the last three years has mostly been driven by favourable market performance rather than new business.

Of the 6.2 percent average compound annual growth rate (CAGR) between 2015 and 2018, 4.0 percent was accredited to an increase in asset value. Simply put, only approximately one third of AuM growth was self-generated. Much of this self-generated growth has been achieved inorganically, and this is certainly true for three out of the top five performing banks.

In Europe, Switzerland and North America, mergers and acquisitions (M&A) activity contributed to double-digit growth for a number of banks. Chinese private banks have been an exception to this pattern. In their case, unprecedented rates of wealth creation made organic growth possible.

According to reports, the wealth of Chinese billionaires increased by 39 percent in 2017 alone, with two new billionaires created each week. Even with the favourable market performance, many banks were not able to maintain their revenue margins.

What stood in their way were pressure from low interest rates, stricter regulation leading to the elimination of certain revenue streams and a drive for greater price transparency, and a changing portfolio composition with more assets falling into higher wealth buckets (with lower revenue margins).

North American banks lead the way on revenue margin, and are even able to capture double the revenue of Swiss and European banks on their AuM. Their success can be mostly put down to higher interest rates, more transactions and higher absolute price levels.

Highly capitalized and growing US and Canadian banks may put additional pressure on Swiss and European competition if they continue to pursue international expansion in the region.

2. Executive Summary

Octagon Private Bank (OPB) prides itself as being one of the most customer focused private banks in New York City. With our luxurious atmosphere and high standards of service, our Private Banking experience is unsurpassed. Each client is treated as a prestigious partner with the utmost respect and concern.

We always strive to ensure the bank’s comprehensive financial and investment services are carefully crafted and put into effect for our client’s unique needs. Our selection of diversified investment in both broad and specialised markets enables us to manage private investors with the same proficiency available to large pension funds and corporate investors.

We also help private clients create a plan that optimises the use of their money by advising them on a selected number of products and help them get where they are going faster.  Although some clients prefer to make their own investment decisions; others are more comfortable receiving professional guidance. Whichever approach they prefer, we at Octagon Private Bank (OPB) are here to help.

At OPB we will offer investment packages, underwriting, proprietary trading, and investment management for our clients.  New York City is beneficial for several industries. Relatively low energy cost, accessible resources, north–south and east–west Interstates, international air terminals, and both west coast intercontinental railroads are all economic advantages.

OPB will be formed as a Limited Liability Company with the sole purpose of serving our clients excellently. Once we land a client, their own financial and investment aspirations, preferences and needs are effectively in control and will be the focus of the bank’s assigned and highly dedicated Associate.

Private banking at OPB is a secure haven, where clients’ dreams and ambitions set the target, their special needs decide the right tailored solutions and their financial status dictates the most appropriate financial planning leading to their targets.

To secure a financial future for our clients and their family, OPB will offer financial advice on a broad range of issues affecting the way the client live at the present and the way they want to live in the future. Clients with substantial wealth often have unique and sometimes complex borrowing needs ranging from basic credit to more sophisticated tax-optimisation strategies.

The Bank Associate coupled with a bank designated Analyst will guide our client to the solutions that best fit their needs by offering completely versatile credit products like specially structured finance with privileged terms and conditions.

3. Our Products and Services

At OPB, our services are designed for high net worth individuals and families. We offer clients professional guidance to protect and enhance their wealth. We provide them with tailored, unbiased advice and investment services – ranging from asset management to estate planning and from cash management to business planning.

It is the nature of things that with more wealth accumulated, more options, obstacles, and challenges are faced. As multiple factors are incorporated from agents to advisors, there is a need for a cohesive force to bring it all together. OPB can greatly simplify the management of client’s complex finances.

Leveraging a team of experts, we provide an objective and holistic analysis of our client’s personal financial situation that is tailored to help them grow and preserve their wealth. Octagon Private Bank will be set in a way to offer a personally tailored solution in five key areas of wealth management:

• Investment planning and asset management
• Wealth protection
• Credit planning and management
• Cash management
• Business planning (Private business owner)

4. Our Mission and Vision Statement

• At OPB, our vision is to grow into a large investment and private bank that that will provide investment advices, wealth protection, dividend income, asset and cash management, and interest income to our clients.
• Our mission at OPB is to ensure that investment decisions are implemented quickly and efficiently across all portfolios.
• To also make sure a trading research and rotation is used to avoid any type of systematic advantage or disadvantage an account may experience.

Our Business Structure

From our detailed research, we understood that for a new bank charter to be approved for us, all our senior management team are expected to have substantial experience in the banking industry.

Howbeit, all members of OPB board of directors are individuals with successful careers in a mix of business, banking, and other fields, and have representation in the necessary disciplines for the board to meet its responsibilities. We also understand the role of the board and management as investors in the bank and how important they are.

Regulators and other investors will look to the investment of these directors and senior officers as an important sign of their commitment to the bank. Knowing that a typical private bank is operated in a rigid way, more than most corporate or financial institutions, we have decided to start with the listed workforce.

Managing director

• Senior vice president

Vice president

Bank Associate

Bank Analyst

• Marketing manager
• Security man

5. Job Roles and Responsibilities

• Broaden and/or enhance the bank’s industry coverage
• Partner with the leadership to grow and build the bank
• Tirelessly work to deliver superior results to the bank’s clients
• Participate as a key member of the senior leadership team, contributing to the strategy, growth and success of the bank
• Lead efforts on sell-side and buy-side acquisition assignments, refinancing, recapitalization and restructuring assignments
• Interact seamlessly with prospects, clients, acquirers, investors and attorneys on all aspects of a M&A deal and/or capital raise
• Direct a team of junior bankers to support all elements of deal sourcing and execution

Senior Vice president

• Involved in executing and managing the actions in equity offerings that will include the drafting and structuring of material, logistics management, issue identification, its analysis and the resolution.
• Responsible for mergers and acquisitions and manages the creation of buyers list, their contacts, drafting the relevant material, financial analysis and management and is involved in private equity placement.
• Researches and identify deal opportunities by formulating and issuing factual financial analyses and creating different kinds of financial plans.
• Involved in pitching or selling the organization’s products and services to the new clients and may be involved in other projects as well.
• May participate in due diligence meetings with non-proprietary or proprietary investment managers and create relevant call reports that include their opinions.
• May be involved in analysing the investment products and screening them by making effective use of a variety of investment data and the relevant software applications
• Monitors the investment products and their performance.
• Analyses the relevant statistics to evaluate the appropriateness of the product.
• Manages relationships with the investment management organizations and regularly gets him/her updated by getting valuable information from them.
• Responsible for providing leadership and overseeing the work of subordinate members.
• Call on prospective clients such as privately held business owners, publicly traded companies and private equity banks.
• Conceptualize, organize and deliver new business presentations.
• Lead transaction implementation across industry groups.
• Manage, educate and develop private banking analysts and associates.
• Develop marketing and new business presentations.
• Monitor financial analysis and modelling.
• Perform and analyse industry research.
• Create client presentations, proposals, engagement letters term sheets, legal agreements and offer memorandums.
• Coordinate internal resources and train and develop junior resources.
• Create and foster client relationships.
• Managing and assisting in the preparation of financial models and business valuations
• Creating client marketing presentations
• Attending client meetings
• Conducting industry and company-specific due diligence related to transactions
• Drafting memoranda for sale assignments
• Assisting in the preparation of fairness opinions
• Attending drafting sessions for equity offerings
• Creating marketing materials for our equity sales organization
• Assisting in the development and continued cultivation of client relationships
• Developing an understanding of the underlying trends that affect equity capital markets
• Gaining an understanding of the interests and investment criteria of a number of middle-market private equity banks
• Development of various types of financial models to value debt and equity for mergers, acquisitions, and capital raising transactions.
• Perform various valuation methods: comparable companies, precedents, and DCF.
• Develop recommendations for product offerings, private equity transactions, mergers and acquisitions, and valuations.
• Conduct preparation and review of materials used in the financing of clients, including investment memoranda, management presentations and pitch books.
• Develop relationships with new and existing clients in order to expand the business.
• Perform due diligence, research, analysis, and documentation of live transactions.
• Create presentations for client portfolios.
• Affinity for current events, critical issues, and relevant news.

Sales and Marketing director

• In charge of organising external research and coordinating all the internal sources of information to retain the organizations’ best customers and attract new ones
• In charge of creating demographic information and analysing the volumes of transactional data generated by customer purchases
• Expected to understand, prioritizes, and reaches out to new partners, and business opportunities et al
• Tasked with understanding development opportunities; follows up on development leads and contacts
• Keep all customer contact and information
• Represents the company in strategic meetings
• Aid to increase sales and growth for the business
• In charge of the cleaning of all OPB floors
• Keep note and make sure the toiletries and supplies don’t run out of stock
• Ensures that both the interior and exterior of the bank are always clean
• Handles any other duty as assigned by the Vice president

Security guard

• The security guard is in charge of protecting the bank and it’s environs
• Also controls traffic and organize parking
• Tasked with giving security tips when necessary
• Should also Patrol around the building on a 24 hours basis
• It’s expected to give security reports weekly

6. SWOT Analysis

OPB is a family of caring partners, experts and friends our clients can trust. We believe we can only consolidate this trust through managing, growing and protecting our clients wealth in a strategic way. We have analysed our market and put together a strategic plan to ensure our bank’s success.

We believe that this plan put into consideration our opportunities, our financial and managerial resources, our prospect for success, the convenience and needs of the public, and the effect of competition on OPB. This strong business and strategic plan supported by detailed financial projections and appropriate policies and procedures form the basis of successful regulatory applications for a private bank charter.

We at OPB hope to establish a lucrative private bank that will help its clients manage and grow wealth while also ensuring profits for our investors. We took time to conduct a detailed SWOT analysis for OPB. The details and results are explained below.

At OPB, our strength rests on the expertise and experience of our management team. With the experience and discipline of our team, our SWOT analysis predict we can build a robust profile even before biding for investment, banking, and securities dealings with high net worth individuals.

As the private banking industry expands and grows in revenue and market reach, so does the level of competition in the industry. Due to the very low barriers to entry, any individual or business may register itself as an investment private bank after meeting the necessary financial requirements and basic paperwork.

• Opportunities

The private banking sector has become one of the fastest growing business sectors in the U.S. economy. Note that computerized technologies allow financial banks to operate advisory, investment banking, and brokerage services anywhere in the country.

In time past, most financial banks needed to be within a close proximity to Wall Street in order to provide their clients the highest level of service. This is no longer the case as a bank can access almost every facet of the financial markets through Internet connections and specialized trading and investment management software.

According to our SWOT analysis, the risks we will be facing include the high correlation which exists between the growth rate of the investment industry and the performance of equity markets. While evidence suggests an attractive environment for equities in the future, no forecasts can be made with absolute certainty.

Secondly, our products are measured by their performance. Although the goal is to achieve competitive performance over three to five-year time periods, short-term periods may result in underperformance based on the critical measures.

Also, beyond the third full year of operations, assets under management must produce revenues that will be sufficient to support operations in their entirety. Otherwise our options will be to acquire additional funding or to reduce costs.

7. MARKET ANALYSIS

• Market Trend

According to industry experts, wealth management and private banking players will need to adapt to a new competitive landscape, as the industry has journeyed into an unprecedented era of transparency.

Constant scrutiny from tax authorities—at a global level—has been at the origin of a significant client re-domiciliation trend, which in turn, has urged Wealth Management firms and Private Banks, notably from international wealth management centres, to follow their clients to their home countries. In parallel, a series of substantial evolutions in the cross-border environment has rocked the industry to its foundations.

Indeed, political tension has been intensifying in some regions of the world and new client types, of a more global and mobile nature, have emerged. These phenomena have led to a rise in asset volumes in cross-border markets. On top of that, in a context of fierce domestic competition, onshore players are looking for new customers in foreign markets.

Concurrently, the industry has experienced a regulatory avalanche over the last few years. Many new restrictions have been implemented, ranging from the marketing of products and services, to customer protection, distance selling, and financial advice.

Also, the fast-changing fiscal environment continues to redesign the cross-border wealth management and private banking market. This translates into additional costs and investments for the players.

Many industry experts foresee that the future of cross-border markets will be subject to further regulatory and fiscal developments. The businesses in the industry will need to demonstrate their ability to comply with such developments and to adapt their business strategies accordingly. In our view, there remains much to be done.

Our analysis at OPB shows existing challenges revolving around the value proposition delivered to cross-border clients, and more importantly, how this value can be delivered, through a combination of multi-channel interaction, appropriate product and service offerings, at a fair price, and supported by optimal operating and organizational models. At OPB, we believe that these considerations will shape the industry for years to come.

8. Our Target Market

At OPB, our target market will mostly depend on the phase of our investment product and its development cycle. Most of the marketing opportunity will happen beyond the first year of product development. But we remain very certain that some initial opportunities do exist.

For instance, our bank can utilize its transfer agent’s distribution services, which would put the product in a highly visible online platform. Note that extra opportunities include marketing to programs that invest specifically in “emerging managers.” High net worth individuals and retail marketplace will constitute a greater number of our potential clients.

We believe they can be accessed to a limited degree, even in the early stages, through similar innovative opportunities and already-established relationships with clients. Just like manufacturing organizations, investment machines like OPB are expected to develop products to provide to their customers.

Our hallmark product offering will be our well designed Market Equity strategy, an investment product offering based on the evidence supporting investor’s desires to outperform the overall market via a single, diversified vehicle and to avoid the need to create complex investment structures.

Our Competitive Advantage

There are strategic three P’s commonly associated with investment banks: People, Process, and Performance. The prior two determine the latter. Even though our business plan highlights many areas (market research, financial projections, etc.), we believe there are two areas that will surely determine the level of success achieved by OPB.

The first will be the people. Bright, energetic, talented, and knowledgeable individuals compose the core of the team we have at OPB. Outstanding and qualified investment professionals are always attracted to efficient private banks that are free from bureaucracy. Process is the second most important element of our bank.

We have made sure cutting-edge research will be provided in support of our portfolio management process. The implementation of our process is maximized by outsourcing virtually all functions not related to portfolio management and research, thereby making full use of the bank’s human capital.

9. SALES AND MARKETING STRATEGY

• Sources of Income

We believe that our primary income at OPB will come from providing our clients with professional guidance to protect and enhance their wealth. We will also offer them tailored, unbiased advice and investment services – ranging from asset management to estate planning and from cash management to business planning.

OPB will earn substantial fees for the equity and debt instruments that it underwrites and then resells to the general public. We also believe that we will engage primarily in debt instruments among middle market companies that will be sold on a best efforts basis.

This will place minimal risk on our capital reserve. We will also earn substantial per hour management and deal fees regarding advisory services. We also plan to make investments directly into marketable securities and hedge funds that specialize in specific areas of trading.

Our intention is to develop a number of trading strategies including options trading, LEAPs trading, long position/short position trading, and other methods of trading that will produce small but consistent gains on a weekly and monthly basis.

We plan to engage in a covered call strategy that would allow the fund to assure return on investment for securities that are held for an extended period of time.

10. Sales Forecast

Our plan at OPB is to turn over approximately 1/3 of our portfolio each year. This will remain consistent with an average holding period of three years. Generally, we would love for all holdings to be long-term investments. The more reason we attempt to identify stocks with which we would be comfortable with if we were “locked in” for three years.

Note that this handicaps us to look beyond short-term noise in quarter-to-quarter results and focus on the big picture, such as our management’s vision for the future and their probability of executing their plan. Also, we do realize that quick price changes, especially in volatile markets, may cause us to realize gains (or losses) sooner than anticipated.

• Marketing Strategy and Sales Strategy

At OPB, we acknowledge that the key to marketing an investment product is to create a successful and attractive product, develop a pattern of success, and show that pattern can be repeated in the future. With that, products should be aggressively marketed if capacity to manage additional assets exists.

Although a three to five-year period tends to seem like a century compared to the technology world, it is really quite reasonable especially with the fact that private equity investors in limited partnership vehicles are generally satisfied with a 10-year waiting period that exists prior to a return of their capital investment.

OPB First Century investment product will be the OPB Total Market Equity strategy and will be initially offered through an SEC registered mutual fund. Technological advancements also permit for other economically feasible distribution channels such as separately managed portfolios for large account sizes.

11. Publicity and Advertising Strategy

At OPB, we will create a long term publicity plan that will boost our brand and help us stay consistent in the industry.

That is why we have contacted the services of an Advertising Experts in business development and publicity, Lexus Channel, to help us create publicity and advertising strategies that will help us at OPB to attract and keep our target audience interested. Listed below is the summary of capable strategies detailed by Lexus Channel for our bank.

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms; we will also advertise OPB on financial magazines, real estate and other relevant financial programs on radio and TV
• Introduce OPB by sending introductory letters with our business brochure to individuals, households, corporate organizations, schools, players in the real estate sector, and all the people of New York City.
• Advertise OPB in important financial and business related magazines, newspapers, TV stations, and radio station.
• Place OPB on yellow pages ads (local directories)
• Attend important international and local real estate , finance and business expos, seminars, and business fairs et al
• Create different packages for different category of clients (individuals, startups and established corporate organizations) in order to work with their budgets
• Encourage word of mouth marketing from loyal and satisfied clients
• Sponsor relevant community based events / programs
• Leverage various online platforms to promote the business. This will make it easier for people to enter our website with just a click of the mouse. We will take advantage of the internet and social media platforms such as; Instagram, Facebook , twitter, YouTube, Google + et al to promote our brand
• Place our Bill Boards on strategic locations
• Share and distribute our fliers and handbills in target areas all around New York City

12. Our Pricing Strategy

Banks in this industry aside helping clients manage and plan wealth, get funds from investors who are interested in investing, and charge them for assisting them in investing their funds over a period of time as agreed by both parties.

Even though the investment banking is a very risky venture, it is still a profitable venture hence there is an agreement between the investment bank and the client as it relates to the commission they are expected to make from the deal.

We at OPB plan to charge based on percentage and also a fixed consultancy/business administrative fee. We believe that in coming years and as we progress that we can decide to improvise or adopt any business process and structure that will guarantee us good return on investment (ROI), efficiency and flexibility.

• Payment options

We plan to make sure we provide our clients with a wide variety of payment options for our services. We understand the need and the diverse platforms different people prefer and we plan to provide a suitable platform that will suit all equally. Listed below are the payment options that we will make available to OPB.

• Payment through private bank transfer
• Payment through online private bank transfer
• Payment with check
• Payment with private bank draft

13. Startup Expenditure (Budget)

Banks like ours raise their initial capital from investors after completing regulatory processes before they can open. In the industry, all insured banks must comply with the capital adequacy guidelines of their primary federal regulator. The guidelines require a private bank to demonstrate that it will have enough capital to support its risk profile, operations, and future growth even in the event of unexpected losses.

We believe that new established private banks are generally subject to additional criteria that remain in place until the private bank’s operations become well established and profitable. We plan for an effective minimum capital of between $15 million to $25 million.

Successful capital generation in these amounts is generally the result of a well formulated and executed plan. We have analysed our needs and we plan to spend our startup funds judiciously. Outlined below is a detailed financial projection and costing for starting OPB;

• Price of incorporating the Business in the United States of America – $750.
• Our budget for basic insurance policy covers, permits and business license – $200,000
• Acquiring a suitable Office facility opposite the city hall at New York City (Re – Construction of the facility inclusive) – $75,000
• The budget envisaged for capitalization (working capital) – $30 million
• Budget for settling other legal processes (acquiring business license and all city dues et al) – $2,500
• Equipping the office with suitable and standard equipment(computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $10,000
• Purchasing of the required software applications (CRM software, Accounting and Bookkeeping software and Payroll software et al) – $10,500
• Launching OPB official Website – $600
• Our expenditure for paying employees for 3 months plus utility bills – $36, 000
• Other Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $4,000
• Miscellaneous: $10,000

With the above detailed cost analysis , we need $349,350 and $30 million working capital to successfully set up OPB.

Generating Funding/Startup Capital for OPB

Octagon Private Bank will be capitalized by three principal investors, Timothy Johnson, Michael Blair, and Thomas Hill. Our founders plan to become the very first financiers of the business, although we have plans of selling shares and stocks as the business matures. Due to less constraint in financing OPB Mortgages, we have outlined the few ways we can get funding and startup capital.

• Generate part of the start up capital from the five principal investors
• Agreeing to angel investors
• Apply for business loan from the Federal Reserve bank (if need be)

Note: OPB has been able to generate an enormous $15 million from its three principal investors. We have also aligned with angel investors to inject $20 million into OPB, with the hope of making profits and establishing a solid business.

14. Sustainability and Expansion Strategy

Our selection of diversified investment in both broad and specialised markets enables us to manage private investors with the same proficiency available to large pension funds and corporate investors. We will help our clients create a plan that optimises their money by advising them on a selected number of products and help them get where they are going faster.

Although some clients prefer to make their own investment decisions; others are more comfortable receiving professional guidance. Whichever approach they prefer, we will always be willing to help. Private banking at OPB is a secure haven, where client’s dreams and ambitions set the target, their special needs decide the right tailored solutions and their financial status dictates the most appropriate financial planning leading to their targets.

To secure a financial future for our clients and their family, we will always proffer financial advice on a broad range of issues affecting the way the client live at the present and the way they want to live in the future.

OPB can greatly simplify the management of client’s complex finances. Leveraging a team of experts, we provide an objective and holistic analysis of our clients personal financial situation that is tailored to help them grow and preserve their wealth.

One distinctive feature of the investment industry is that collection of fees (i.e. revenues) is highly certain because fees are frequently charged directly to the client’s accounts (or to the mutual fund). That is the more reason why revenue certainty is very high and is directly related to the amount of assets under management.

Also common practice in the investment industry is to bill at each quarter-end. For instance, our annual fee of 1 percent would be applied to our clients’ accounts five times per year at 0.20 percent.

Economic motivation is great and growth rates for the investment industry are expected to range from 30 percent to 32 percent in each of the next three years. Also, the demographic, economic, political and social evidence supporting these projections make this industry one of the most attractive industries due to the high degree of certainty in the estimates.

We believe that the certainty coupled with the above average growth rate differentiates this opportunity from other venture investments. Our near accurate estimates outline a plan-to-profitability over a period much shorter than typical venture investments that sometimes need up to ten years to make profits.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Private bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting feasibility studies: Completed
• Leasing, renovating and equipping our facility: Completed
• Generating part of the start – up capital from the founder: Completed
• Applications for Loan from our Private bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with private banks, financial lending institutions, vendors and key players in the industry: In Progress

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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

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

A Step-by-Step Guide to Crafting a Bankable Business Plan

A well-crafted business plan is the foundation of any successful venture. It not only serves as a roadmap for your business but also plays a crucial role in securing funding from investors or financial institutions. In this guide, we will take you through the step-by-step process of creating a bankable business plan that will captivate stakeholders and increase your chances of securing the funding you need.

Step 1: Executive Summary Start your business plan with a compelling executive summary that provides a concise overview of your business. Clearly define your vision, mission, and the unique value proposition your business offers. Highlight your target market, competitive advantage, and growth potential. Keep it concise but impactful to grab the reader's attention.

Step 2: Company Description and Market Analysis In this section, provide a detailed description of your company, its history, legal structure, and ownership. Conduct thorough market research to understand your target audience, industry trends, and competitive landscape. Demonstrate your knowledge of the market by identifying your target market segments, customer needs, and how your product or service will fulfill those needs better than your competitors.

Step 3: Product or Service Offering Describe your product or service in detail, emphasizing its unique features and benefits. Outline how your offering solves customer pain points and addresses market demands. Include information about your product development stage, intellectual property, and any competitive advantages such as patents or proprietary technology.

Step 4: Marketing and Sales Strategy Present a comprehensive marketing and sales strategy that outlines how you will reach your target audience and convert them into loyal customers. Define your pricing strategy, distribution channels, and promotional activities. Include a detailed analysis of your competitors and explain how you will differentiate your business in the market.

Step 5: Operations and Management Provide an overview of your business operations, including facilities, equipment, and key processes. Present your organizational structure and introduce key members of your management team, highlighting their relevant experience and expertise. Investors are often interested in knowing who will be driving the business forward and their qualifications.

Step 6: Financial Projections and Funding Request Develop realistic financial projections, including revenue forecasts, expenses, and cash flow statements. Project your financials over a period of at least three years to demonstrate long-term sustainability. Clearly explain the assumptions behind your projections and provide a comprehensive analysis of your funding needs. Specify the amount you are seeking and how it will be utilized.

Step 7: Risk Analysis and Mitigation Strategies Acknowledge potential risks and challenges your business may face and outline strategies to mitigate them. This demonstrates that you have thoroughly considered various scenarios and have plans in place to navigate uncertainties. Identify regulatory, market, and operational risks, and explain how you will address them to ensure the success and growth of your business.

Conclusion: Crafting a bankable business plan requires careful research, strategic thinking, and a deep understanding of your market and financials. By following this step-by-step guide, you will be well-equipped to create a comprehensive and compelling business plan that impresses investors and lenders. Remember, a well-prepared plan not only increases your chances of securing funding but also serves as a valuable roadmap to guide your business towards success. Take the time to refine and update your business plan as your venture evolves, ensuring it remains a dynamic tool for your entrepreneurial journey.

Please feel free to reach out to us for further information or to discuss how we can assist you in accessing the funding you require for your business.

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Here’s How To Write A Bankable Business Plan

• 11 mins read

I have had experience coaching and training numerous companies, government-linked corporations (GLCs), government agencies, and entrepreneurs. Among the most crucial challenges is creating and developing a bankable business plan or business proposal.

While many have taught the criteria for preparing a business plan, few have delved into the specifics of crafting a bankable one. I will not only cover the criteria for a bankable business plan but also go deep into the reasons why many companies face rejections of their proposals. Understanding these reasons is crucial in order to effectively counter them and increase the chances of success.

I analyzed the common pitfalls and shortcomings that often lead to proposal rejections, such as lack of market research, weak financial projections, inadequate competitive analysis, or insufficient clarity in the value proposition. By addressing these issues head-on, we equip you with the tools and strategies to strengthen your proposal and overcome potential obstacles.

My aim is to empower you with the knowledge and insights necessary to develop a compelling and persuasive business plan that not only meets the criteria but also impresses stakeholders and potential investors. Through our in-depth discussions and guidance, you will gain the confidence and understanding needed to navigate the challenges of creating a bankable business plan.

When seeking a loan from a bank to fund your business venture, a well-crafted and bankable business plan is crucial. A strong business plan not only demonstrates your vision and potential but also instills confidence in lenders that your venture is worth investing in.

In this article, we will guide you through the critical steps to writing a bankable business plan that will increase your chances of securing a loan for your entrepreneurial journey.

• Executive Summary: The executive summary sets the stage for your business plan and provides a concise overview of your company, its objectives, and the amount of funding you are seeking. Keep it compelling and to the point, highlighting the most critical aspects of your business.
• Company Description: This section provides a comprehensive overview of your business. Describe your company’s mission, vision, legal structure, ownership details, and key milestones achieved. Explain the industry in which you operate, its potential for growth, and the target market you intend to serve.
• Market Analysis: Conduct a thorough market analysis to demonstrate your understanding of the industry and its trends. Identify your target audience, analyze competitors, and highlight your unique selling proposition. Show the bank that you have conducted market research and understand your customers’ needs and preferences.
• Products and Services: Describe your business’s products or services. Explain how they address market demand and provide value to customers. Highlight any competitive advantages or intellectual property you possess that differentiates your offerings from others in the market.
• Marketing and Sales Strategy: Outline your marketing and sales approach to attract customers and generate revenue. Explain your pricing strategy, distribution channels, and promotional activities. Include a sales forecast and projections to demonstrate the potential profitability of your business.
• Management and Organization : Detail the structure of your management team and their qualifications. Emphasize their relevant experience and expertise, as this will give the bank confidence in your ability to lead the business successfully. Include an organizational chart and highlight any key advisors or board members.
• Financial Projections: This section is crucial, as it demonstrates the financial viability of your business. Include projected income statements, cash flow statements, and balance sheets for at least three years. Use realistic assumptions and provide detailed explanations for your financial projections.
• Funding Request: Clearly state the amount of funding you are seeking and explain how it will be used to support your business goals. Provide a breakdown of the loan requirements, including working capital, equipment purchases, or expansion plans. Show the bank that you have a solid repayment plan in place.
• Risk Assessment and Mitigation: Acknowledge the risks and challenges your business may face and outline your strategies for mitigating them. Address potential industry or market risks and demonstrate your ability to adapt and overcome obstacles.
• Appendix: Include any supporting documents, such as resumes, legal contracts, permits, licenses, or market research data, in the appendix. These documents will provide additional credibility and support to your business plan.

People often write business plans that may not be considered bankable due to various reasons. Banks may reject a business plan or business proposal for a loan due to various reasons. Understanding these common issues can help you avoid them and increase your chances of approval.

Normal issues that can lead to a bank rejecting a business plan or proposal

• Inadequate Financial Projections: Banks assess the financial viability of a business and its ability to generate sufficient cash flow to repay the loan. If your financial projections are unrealistic, lack supporting data, or show inconsistencies, the bank may consider your business plan unreliable and reject your loan application.
• Insufficient Collateral or Guarantees: Banks often require collateral or personal guarantees to secure a loan. If the value of the collateral is insufficient or if the personal guarantees provided are not strong enough, the bank may reject the loan application due to perceived higher risk.
• Poor Credit History: Banks review the credit history of the borrower, both personal and business. A low credit score, a history of late payments, or defaults on previous loans can lead to loan rejection. Maintain a good credit history by making payments on time and managing your debts responsibly.
• Lack of Business Experience or Expertise: Banks consider the experience and expertise of the management team crucial to the success of a business. If the management team lacks relevant industry experience or fails to demonstrate the necessary skills to manage the proposed venture, the bank may reject the loan application.
• Weak Business Model or Market Analysis: If the business plan fails to convince the bank of the viability of the business model or lacks a thorough market analysis, it may be seen as high risk. Banks want assurance that your business has a solid market demand, a competitive advantage, and a well-defined target audience.
• Insufficient Cash Flow or Profitability: Banks assess the cash flow and profitability of a business to ensure it can generate enough income to repay the loan. If your business plan demonstrates weak cash flow projections or a lack of profitability, the bank may consider it financially unstable and reject the loan application.
• Inadequate Documentation: Failing to provide the required supporting documents or submitting incomplete or inaccurate information can result in loan rejection. Banks rely on these documents to assess the credibility and feasibility of your business proposal, so ensure they are well-prepared and up-to-date.
• Regulatory or Legal Issues: Banks require businesses to comply with all applicable laws and regulations. If your business plan raises concerns about legal compliance or if there are any pending legal issues, the bank may reject the loan application to mitigate potential risks.
• Over-reliance on a Single Customer or Supplier: If your business heavily depends on one customer or supplier, it can be seen as a risk. Banks prefer diverse and stable customer bases and supply chains to ensure the sustainability of their business.
• Lack of Repayment Plan: If your business plan fails to outline a clear and feasible repayment plan for the loan, including repayment sources and timelines, the bank may reject the loan application. Banks need assurance that you have considered how the loan will be repaid.

It’s important to address these issues when preparing your business plan and loan proposal. Conduct thorough research, seek professional advice if needed, and ensure your business plan addresses these potential concerns to maximize your chances of loan approval.

To increase the chances of your business plan being considered bankable by banks, it is important to fulfill certain prerequisites and provide supporting documents that demonstrate the viability of your business.

Here is a list of prerequisites and supporting documents commonly required by banks when submitting a business plan for a loan

The prerequisites.

• Clarity of Purpose: Clearly state the purpose of the loan and how it will be used to support your business’s growth, such as working capital, equipment purchase, expansion, or inventory management.
• Realistic Financial Projections: Develop realistic and well-supported financial projections that include projected income statements, cash flow statements, and balance sheets for at least three years. Use accurate assumptions based on thorough market research and industry analysis.
• Repayment Plan: Present a solid repayment plan, including the proposed loan term, interest rates, and the expected cash flow generated by the business to cover loan repayments.
• Strong Management Team: Highlight the qualifications and experience of your management team to instill confidence in the bank regarding their ability to successfully lead and manage the business.
• Collateral or Guarantees: Be prepared to provide collateral or personal guarantees, such as property, inventory, or other assets, to secure the loan. Banks often require some form of security to mitigate their lending risk.
• Credit History: Maintain a good personal and business credit history. Banks typically review credit scores and credit reports to assess the borrower’s creditworthiness.
• Legal and Regulatory Compliance: Ensure that your business complies with all applicable legal and regulatory requirements. This includes licenses, permits, registrations, and any necessary certifications.

The supporting documents for loan submission

• Business Plan: A comprehensive business plan that includes all the essential sections mentioned in the previous response. This document should be well-structured, clearly written, and professionally presented.
• Financial Statements: Provide the latest financial statements of your business, including income statements, balance sheets, and cash flow statements. These statements should be prepared by a qualified accountant.
• Personal and Business Tax Returns: Submit personal and business tax returns for the previous few years to demonstrate the financial health and stability of your business.
• Bank Statements: Provide recent bank statements for your business accounts to showcase cash flow patterns and financial stability.
• Legal Documents: Include copies of legal documents such as business licenses, permits, registrations, contracts, leases, or partnership agreements to establish the legitimacy and legality of your business.
• Resumes: Attach resumes or curricula vitae (CVs) of key members of your management team, highlighting their relevant experience, skills, and qualifications.
• Market Research and Analysis: Include market research data, competitor analysis, and industry reports to support your understanding of the market, its potential, and your competitive advantage.
• Contracts or Purchase Orders: If applicable, provide any signed contracts or purchase orders from customers or clients that demonstrate existing demand for your products or services.
• Insurance Policies: Include copies of insurance policies relevant to your business, such as general liability insurance, property insurance, or professional liability insurance.
• References: Provide references from clients, suppliers, or industry experts who can vouch for your business’s credibility and potential.

These specific requirements and supporting documents may vary depending on the bank and the nature of your business. It’s always recommended to consult with the bank or a financial advisor to ensure you meet their specific prerequisites and provide all the necessary supporting documents when submitting your business plan for a loan.

If an entrepreneur does not have sufficient collateral or the necessary documentation to support their loan application, there are still several actions they can take to increase their chances of obtaining a loan.

Strategies for entrepreneurs in such a situation

• Build a Strong Business Case: Focus on developing a compelling business plan that clearly outlines the viability and potential profitability of your venture. Highlight your unique selling points, market demand, competitive advantage, and growth projections. Demonstrating a well-thought-out and promising business model can help compensate for the lack of collateral.
• Seek Alternative Financing Options: Explore alternative financing options beyond traditional bank loans. Consider options such as crowdfunding, angel investors, venture capital, or peer-to-peer lending platforms. These alternative sources of funding may have different requirements and may be more flexible regarding collateral.
• Find a Co-Signer or Partner: If you lack collateral, you could consider bringing on a co-signer or business partner who has the necessary assets or creditworthiness to act as a guarantor for the loan. This individual would share responsibility for loan repayment and provide additional security for the bank.
• Build Relationships with Local Banks: Develop relationships with local community banks or credit unions that may have more flexibility in their lending criteria compared to larger institutions. Local banks often have a deeper understanding of the local market and may be more willing to work with entrepreneurs without extensive collateral.
• Opt for Government-backed Loan Programs: Investigate government-backed loan programs or Small Business Administration (SBA) loans or grants that offer support and assistance to entrepreneurs. These programs often have more lenient collateral requirements and provide guarantees to lenders, reducing their risk.
• Improve Personal and Business Credit: Work on improving your personal and business credit scores by paying bills and debts on time, reducing outstanding debts, and establishing a positive credit history. A strong credit profile can help compensate for the lack of collateral and increase your chances of loan approval.
• Provide Additional Documentation : Even if you don’t have traditional collateral, providing additional documentation that showcases the stability and potential of your business can be beneficial. This could include contracts or purchase orders from clients, letters of intent, supplier agreements, or evidence of strong customer demand.
• Demonstrate Personal Investment: Show your commitment and belief in your business by investing your funds into the venture. Banks appreciate entrepreneurs who have a stake in their own success and are willing to invest their resources.
• Seek Expert Assistance: Consider seeking guidance from a small business advisor, consultant, or mentor who can help you navigate the loan application process. They can provide valuable insights, review your business plan, and assist in identifying alternative funding options.

Please bear in mind that each situation is unique, and the availability of options may vary depending on your location, industry, and specific circumstances. It’s essential to carefully evaluate your options, research available resources, and consider seeking professional advice to determine the best course of action for your specific situation.

Writing a bankable business plan requires thorough research, strategic thinking, and a clear understanding of your business model. By following these key steps, you will be well-equipped to create a compelling business plan that increases your chances of securing the loan you need to turn your entrepreneurial vision into a reality.

A strong business plan helps you secure funding and serves as a roadmap for your business’s success.

So, writing a bankable business plan is an essential step for entrepreneurs who are looking to start or expand their ventures. A well-crafted business plan serves as a roadmap that outlines your goals, strategies, and financial projections, making it easier to secure funding and attract potential investors.

Throughout this process, it’s important to thoroughly research your market, identify your target audience, and clearly articulate your unique value proposition. By demonstrating a thorough understanding of your industry, competition, and customer needs, you increase the likelihood of developing a compelling business plan that resonates with stakeholders.

Furthermore, a bankable business plan should address potential risks and challenges while providing realistic and achievable financial projections. This demonstrates your ability to analyze and mitigate risks, which gives confidence to investors and lenders.

Remember, a bankable business plan is not a static document but an evolving blueprint that should be regularly reviewed and updated as your business progresses. Flexibility and adaptability are key in the ever-changing business landscape. By investing time and effort into crafting a comprehensive and persuasive business plan, entrepreneurs can position themselves for success, navigate obstacles, and maximize their chances of turning their ideas into thriving businesses.

Hence, start today and embark on the journey of writing a bankable business plan that will set the foundation for your entrepreneurial aspirations. With careful planning, diligent research, and a clear vision, you can increase your chances of building a successful and sustainable business.

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Step-by-Step Guide to Writing a Simple Business Plan

By Joe Weller | October 11, 2021

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A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice. 

Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .

What Is a Business Plan?

A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:

• Product goals and deadlines for each month
• Monthly financials for the first two years
• Profit and loss statements for the first three to five years
• Balance sheet projections for the first three to five years

Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.

While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.

For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .

Business Plan Steps

The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:

• Executive summary
• Description of business
• Market analysis
• Competitive analysis
• Description of organizational management
• Description of product or services
• Marketing plan
• Sales strategy
• Funding details (or request for funding)
• Financial projections

If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.

Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.

Do I Need a Simple or Detailed Plan?

Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.

How to Choose the Right Plan for Your Business

In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.

Use the chart below as a guide for what type of business plan to create:

Is the Order of Your Business Plan Important?

There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.

The Difference Between Traditional and Lean Business Plans

A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.

In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.

How to Write a Business Plan Step by Step

Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.

Step 1: Executive Summary

The executive summary will always be the first section of your business plan. The goal is to answer the following questions:

• What is the vision and mission of the company?
• What are the company’s short- and long-term goals?

See our  roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.

Step 2: Description of Business

The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:

• What business are we in?
• What does our business do?

Step 3: Market Analysis

In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:

• Who is our customer? 
• What does that customer value?

Step 4: Competitive Analysis

In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:

• Who is the competition? 
• What do they do best? 
• What is our unique value proposition?

Step 5: Description of Organizational Management

In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.

Step 6: Description of Products or Services

In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.

Questions to answer in this section are as follows:

• What is the product or service?
• How do we produce it, and what resources are necessary for production?

Step 7: Marketing Plan

In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:

• Who is the target market (if different from existing customer base)?
• What channels will you use to reach your target market?
• What resources does your marketing strategy require, and do you have access to them?
• If possible, do you have a rough estimate of timeline and budget?
• How will you measure success?

Step 8: Sales Plan

Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts. 

Start by answering the following questions:

• What is the sales strategy?
• What are the tools and tactics you will use to achieve your goals?
• What are the potential obstacles, and how will you overcome them?
• What is the timeline for sales and turning a profit?
• What are the metrics of success?

Step 9: Funding Details (or Request for Funding)

This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:

• How much capital do you currently have? How much capital do you need?
• How will you grow the team (onboarding, team structure, training and development)?
• What are your physical needs and constraints (space, equipment, etc.)?

Step 10: Financial Projections

Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years. 

While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:

• How and when will the company first generate a profit?
• How will the company maintain profit thereafter?

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.

For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy. 

If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.

How to Write a Simple Business Plan

A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.

Below are the steps for creating a generic simple business plan, which are reflected in the template below .

• Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company. 
• Add a Company Overview Document the larger company mission and vision. 
• Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
• Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
• Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
• Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
• Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
• Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
• Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting. 
• Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.

Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates . 

How to Write a Business Plan for a Lean Startup

A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.

While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:

• Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
• List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
• Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
• Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
• Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.). 
• Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
• Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
• Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.

See our wide variety of  startup business plan templates for more options.

How to Write a Business Plan for a Loan

A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.

In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.

• Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
• Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
• Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
• Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
• Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”

Outside of these more practical tips, the language you use is also important and may make or break your business plan.

Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.

“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”

Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”

Resources for Writing a Business Plan

While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.

Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.

How a Business Plan Helps to Grow Your Business

A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships. 

Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.

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How to write a business plan

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Every business owner can benefit from writing a business plan, including those in the early stages of launching a business . A well-crafted business plan communicates the business’s strategy for growth to key leaders and investors. It’s also an important step to getting a business loan since many lenders require it.

Let’s walk through the steps and elements of writing your ideal business plan.

Key takeaways

• A business plan outlines how you plan to bring products or services to market
• Many lenders require a business plan be included with a loan application
• You can choose to write a lean or traditional business plan
• It covers everything from market research to your marketing and financial plan.

What is a business plan?

A business plan is a document that outlines a business’s strategy for bringing a product or service to market. It describes the company, product idea and goals or steps that the business will take to achieve growth. The document includes multiple sections that provide insight into each part of the strategy.

The business plan can be a simple document called a lean business plan or a more detailed traditional business plan. The lean business plan covers the basics of the company, product, target customers and how it will get revenue. It may only be one page with short descriptions for each part.

The traditional business plan includes more depth on the goals, measurements, research and marketing strategies to get the business where it’s going. Here are key differences in the information written for each type of business plan:

Although there’s no one-size-fits-all approach, follow these steps to create a strong business plan.

Write an executive summary

An executive summary is the introduction to a business plan, giving the key details about your business model and the product or service you’re offering. While there’s no strict formula for writing this section, you should include all the relevant details that you’d want a key partner or investor to know.

It should describe your product or service idea, target market and key objectives for growth within the next few years. It may also summarize your marketing and sources of revenue or funding.

You can adjust what to include based on the exact business you’re starting and its business model. Most business plans keep the executive summary to one to two pages.

Create a company description

The company description should overview important details about your company. It can state your company’s name, location and type of entity as well as describe its history. It should also clearly define the vision that you have for your company’s future in the form of a mission or vision statement.

You may also outline the structure for managing the business, listing key roles and responsibilities and the people filling those roles. Depending on the details you included in the executive summary, you might include information about your product or service.

Describe your value proposition

The value proposition is your chance to pitch what makes your business stand out. It identifies the customer’s problem or gap in the market for the product or service you’re offering. It then goes into detail about how your business will solve the problem.

The value proposition can also explain major barriers that customers have before making a decision and what your business will do to break through those barriers. It shows leaders and investors that you have a thoughtful purpose behind the business you’re creating.

State your business goals

The path to achieving success starts with knowing what success looks like. Many business plans state its main objectives in the company description. Others describe those goals in a separate part of the business plan to dive deeper into the specific goals.

You can also include key measurements you’ll use to gauge whether your business is achieving its goals. You would then use these goals in other business planning documents, further breaking them down into defined short-term steps that ladder up to the larger goals.

Outline your product and service

Next, you want to dive into the main product or service that your business is offering. Explain what the product is, how it works and the benefits that it brings to customers. If you’re planning to make multiple products, you can include a description of each product line. Show how this product or service is set apart from similar products from competitors.

You can also use this section to show how the product or service is produced, including cost of supplies and the price at which you plan to sell. Let the investors and stakeholders know if you have a trademark or patent for the products you’re creating.

Give a summary of market research

Next comes market research, the part of the plan where you do your due diligence to gather information and understand your target customers and competitors. First, you want to understand your target customers’ needs and any barriers they might have to buying your product.

You want to look for information about their demographics and how they might respond to the product you’re offering. This information will help you when designing your product and marketing it in a way that resonates with customers.

Then, you can look at the economy around your product, such as average pricing and sales revenue. This also includes research about your competitors, the market share that they hold and the barriers to entering your market. This section may include data from data research companies, surveys, focus groups and interviews.

According to the U.S. Small Business Administration , the questions you’re trying to answer include:

• Market size, or how many people may want to buy your product
• What people are willing to pay for your product
• Similar products already available
• Who your competitors are
• How your industry is doing
• Typical revenue gained by small businesses in your industry

Summarize a marketing strategy

Once you’ve clearly defined your product and who you’re selling to, you can come up with a strategy for how you’ll reach and sell to customers. In this section, you’ll include the different marketing channels you’ll use to promote your products and services.

These may include direct mailers, social media, traditional or online advertising or media events. The exact channels you use will depend on where you can easily find your target customers.

You can also describe the key messaging that you plan to use during marketing, which will pinpoint the value that it offers to customers. The marketing plan should also include the cost of marketing to different channels and your marketing budget. You can then outline the marketing goals and measurements you’ll use to see if you’re meeting those goals.

Create a logistics and operations plan

The logistics and operations section of your business plan is a detailed description of how your business will bring products and services to market. It explains how the business will run on a day-to-day basis. It should highlight your company’s management structure, give an overview of processes and describe the workflow from end to end. It can also include data on how many products you can make or how long it will take to make products or offer services.

Create a financial plan

Now that you’ve laid out the research, goals and planning, you can use that information to forecast revenue and build a financial plan. Use any past revenue or sales history as a starting point. Then, refer to your company’s recent growth and goals to calculate future financial growth.

If you’re a startup , you can use market research to estimate revenue for a startup in your industry. You can either forecast revenue manually or find software that projects revenue for you.

In your financial plan, you also want to create and track your business budget . You’ll track your estimated and actual revenue, updating regularly to keep the revenue forecast accurate and realistic. Next, you’ll list all expenses and their amounts, including one-time, variable, fixed or seasonal expenses. Here are some examples of different business expenses:

• One-time or capital expenses: Equipment, real estate, furniture, commercial vehicles, business licenses
• Variable expenses: Inventory, utilities, fuel, office supplies, shipping services, card processing fees
• Fixed expenses: Employee salaries and benefits, software, web hosting, office or equipment leases, business loan repayments

Business plan resources

Writing your business plan will take more than putting pen to paper. Try these resources to help you gather data, set up your finances and more:

• Business plan templates. Creating a business plan for the first time? Learn by looking up examples of other business plans or templates like these from Smartsheet .
• Software for accounting and financial planning. Many small businesses use Quickbooks, Xero or Netsuite to track revenue and expenses. These may also forecast revenue based on sales history.
• Business loan resources. To cover your funding needs, think through the types of business loans that would best serve your business. Once you’ve landed on a loan, compare features and interest rates to help you make a decision.
• Survey tools. For in-depth market research, you can build a survey and send to your target customers through a data research company like GWI.

Small business mentoring

Experienced mentors can guide you to making effective business decisions and unlock new potential for growth. Where to find small business mentors:

• SBA. You can find resources and free or low-cost mentors through the SBA’s local assistance tool .
• Small Business Development Centers. SBDCs provide specialized training programs in your local area covering specialized topics like marketing, data research and business management.
• Community Development Financial Institutions. CDFIs   are financial organizations like banks and credit unions that are built to develop the community. Alongside banking and lending services, CDFIs offer training programs and resources.
• SCORE. SCORE is an organization that partners with the SBA to bring resources to small business owners. Mentorship is at the core of what the organization does, and it can match you with a local mentor through its online locator tool.
• Local Chamber of Commerce. These local organizations are known for supporting business networking. They may help you find a mentorship program, or you may build a relationship with another successful entrepreneur through networking events.
• Nonprofit organizations. Some nonprofit organizations are dedicated to supporting small business owners with funding, trainings and mentorship programs. These are typically local programs. For example, NYPACE is a nonprofit that offers free consulting to underserved entrepreneurs in New York.

Bottom line

Your business plan should outline key information about your company, products and the strategy for getting those products in the hands of your customers. Every business plan looks different, but there is essential information to include in every plan, such as who your target customer is and your expected revenue. The business plan serves to help you get business funding and outline exact goals and steps to growing your company.

Frequently asked questions

Do i need a business plan to apply for a business loan, how do i write a simple business plan, what basic items should be included in a business plan.

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How to Write a Successful Bank Business Plan (+ Template)

Creating a business plan is essential. Still, it can be beneficial for bank s that want to improve their strategy or raise funding.

A well-crafted business plan outlines your company’s vision and documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components essential to its success.

This article provides an overview of the key elements that every bank business owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a Bank Business Plan?

A bank business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a critical document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Bank Business Plan?

A bank business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Bank Business Plan

The following are the key components of a successful bank business plan:

Executive Summary

The executive summary of a bank business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your bank company
• Provide a summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast, among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.

You may not have a long company history if you are just starting your bank business. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company or been involved in an entrepreneurial venture before starting your bank firm, mention this.

You will also include information about your chosen bank business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an essential component of a bank business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the bank industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support your company’s success)?

You should also include sources for your information, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a bank business’ customers may include small businesses, large corporations, and individuals. Each customer segment will have different requirements that your bank company will need to cater to.

You can include information about how your customers decide to buy from you and what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or bank services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will differ from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your bank business may have:

• Proven track record with a focus on customer service.
• Superior technology that makes banking easier and more convenient for customers.
• Range of products and services to meet the needs of different customer segments.
• Sound financial position with a commitment to responsible lending practices.
• Extensive branch and ATM network.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your bank business via PR or events.

Operations Plan

This part of your bank business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

You also need to include your company’s business policies in the operations plan. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, your Operations Plan will outline the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a bank business include reaching $X in sales. Other examples include expanding to new markets, launching new products and services, and hiring key personnel.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific bank industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here, you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs and the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Bank

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : Everything you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Bank

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from:

• Investments

Below is a sample of a projected cash flow statement for a startup bank business.

Sample Cash Flow Statement for a Startup Bank

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your bank company. It not only outlines your business vision but also provides a step-by-step process of how you will accomplish it.

Now that you know how to write a business plan for your bank, you can get started on putting together your own.

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Starting a business in the United States involves a number of different steps spanning legal considerations, market research, creating a business plan, securing funding, and developing a marketing strategy. It also requires decisions about a business’ location, structure, name, taxation, and registration. Here are the key steps involved in starting a business, as well as important aspects of the process for entrepreneurs to consider.

Key Takeaways

• Entrepreneurs should start by conducting market research to understand their industry space, competition, and target customers.
• The next step is to write a comprehensive business plan, outlining the company’s structure, vision, and strategy.
• Securing funding in the form of grants, loans, venture capital, and/or crowdfunded money is crucial if you’re not self-funding.
• When choosing a venue, be aware of local regulations and requirements.
• Design your business structure with an eye to legal aspects, such as taxation and registration.
• Make a strategic marketing plan that addresses the specifics of the business, industry, and target market.

Before starting a business, entrepreneurs should conduct market research to determine their target audience, competition, and market trends. The U.S. Small Business Administration (SBA) breaks down common market considerations as follows:

• Demand : Is there a need for this product or service?
• Market size : How many people might be interested?
• Economic indicators : What are the income, employment rate, and spending habits of potential customers?
• Location : Are the target market and business well situated for each other?
• Competition : What is the market saturation ? Who and how many are you going up against?
• Pricing : What might a customer be willing to pay?

Market research should also include an analysis of market opportunities, barriers to market entry, and industry trends, as well as the competition’s strengths, weaknesses, and market share .

There are various methods for conducting market research, and these will vary depending on the nature of the industry and potential business. Data can come from a variety of places, including statistical agencies, economic and financial institutions, and industry sources, as well as direct consumer research through focus groups, interviews, surveys, and questionnaires.

A comprehensive business plan is like a blueprint. It lays the foundation for business development and affects decision-making, day-to-day operations, and growth. Potential investors or partners may want to review and assess it in advance of agreeing to work together. Financial institutions often request business plans as part of an application for a loan or other forms of capital. 

Business plans will differ according to the needs and nature of the company and should only include what makes sense for the business in question. As such, they can vary in length and structure. They can generally be divided into two formats: traditional and lean start-up. The latter is less common and more useful for simple businesses or those that expect to rework their traditional business plan frequently. It provides a vivid snapshot of the company through a small number of elements.

The process of funding a business depends on its needs and the vision and financial situation of its owner.  The first step is to calculate the start-up costs . Identify a list of expenses and put a dollar amount to each of them through research and requesting quotes. The SBA has a start-up costs calculator for small businesses that includes common types of business expenses.  

The next step is to determine how to get the money. Common methods include:

• Self-funding , also known as “ bootstrapping ”
• Finding investors willing to contribute to your venture capital
• Raising money online by crowdfunding
• Securing a business loan from a bank, an online lender, or a credit union
• Winning a business grant from a donor, usually a government, foundation, charity, or corporation

Different methods suit different businesses, and it’s important to consider the obligations associated with any avenue of funding. For example, investors generally want a degree of control for their money, while self-funding puts business owners fully in charge. Of course, investors also mitigate risk; self-funding does not.

Availability is another consideration. Loans are easier to get than grants, which don’t have to be paid back. Additionally, the federal government doesn’t provide grants for the purposes of starting or growing a business, although private organizations may. However, the SBA does guarantee several categories of loans , accessing capital that may not be available through traditional lenders. No matter the funding method(s), it’s essential to detail how the money will be used and lay out a future financial plan for the business, including sales projections and loan repayments . 

Businesses operating in the U.S. are legally subject to regulations at the local, county, state, and federal level involving taxation, business IDs, registrations, and permits.

Choosing a Business Location

Where a business operates will dictate such things as taxes, zoning laws (for brick-and-mortar locations), licenses, and permits. Other considerations when choosing a location might include:

• Human factors : These include target audience and the preferences of business owners and partners regarding convenience, knowledge of the area, and commuting distance.
• Regulations : Government at every level will assert its authority.
• Regionally specific expenses : Examples are average salaries (including required minimum wages), property or rental prices, insurance rates, utilities, and government fees and licensing.
• The tax and financial environment : Tax types include income, sales, corporate, and property, as well as tax credits; available investment incentives and loan programs may also be geographically determined.

Picking a Business Structure

The structure of a business should reflect the desired number of owners, liability characteristics, and tax status. Because these have legal and tax compliance implications , it’s important to understand them fully. If necessary, consult a business counselor, a lawyer, and/or an accountant.

Common business structures include:

• Sole proprietorship : A sole proprietorship is an unincorporated business that has just one owner, who pays personal income tax on its profits.
• Partnership : Partnership options include a limited partnership (LP) and a limited liability partnership (LLP) .
• Limited liability company (LLC) : An LLC protects its owners from personal responsibility for the company’s debts and liabilities.
• Corporation : The different types of corporations include C corp , S corp , B corp , closed corporation , and nonprofit .

Getting a Tax ID Number

A tax ID number is the equivalent of a Social Security number for a business. Whether or not a state and/or federal tax ID number is required will depend on the nature of the business and the location in which it’s registered.

A federal tax ID, also known as an employer identification number (EIN) , is required if a business:

• Operates as a corporation or partnership
• Pays federal taxes
• Has employees
• Files employment, excise, alcohol, tobacco, or firearms tax returns
• Has a Keogh plan
• Withholds taxes on non-wage income to nonresident aliens
• Is involved with certain types of organizations, including trusts, estates, real estate mortgage investment conduits, nonprofits, farmers’ cooperatives, and plan administrators

An EIN can also be useful if you want to open a business bank account, offer an employer-sponsored retirement plan, or apply for federal business licenses and permits. You can get one online from the Internal Revenue Service (IRS) . State websites will do the same for a state tax ID.

Registering a Business

How you register a business will depend on its location, nature, size, and business structure.  For example, a small business may not require any steps beyond registering its business name with local and state governments, and business owners whose business name is their own legal name might not need to register at all.

That said, registration can provide personal liability protection, tax-exempt status, and trademark protection, so it can be beneficial even if it’s not strictly required. Overall registration requirements, costs, and documentation will vary depending on the governing jurisdictions and business structure.  

Most LLCs, corporations, partnerships, and nonprofits are required to register at the state level and will need a registered agent to file on their behalf. Determining which state to register with can depend on factors such as:

• Whether the business has a physical presence in the state
• If the business often conducts in-person client meetings in the state
• If a large portion of business revenue comes from the state
• Whether the business has employees working in the state

If a business operates in more than one state, it may need to file for foreign qualification in other states in which it conducts business. In this case the business would register in the state in which it was formed (this would be considered the domestic state) and file for foreign qualification in any additional states.

Obtaining Permits

Filing for the applicable government licenses and permits will depend on the industry and nature of the business and might include submitting an application to a federal agency, state, county, and/or city. The SBA lists federally regulated business activities alongside the corresponding license-issuing agency, while state, county, and city regulations can be found on the official government websites for each region.

Every business should have a marketing plan that outlines an overall strategy and the day-to-day tactics used to execute it. A successful marketing plan will lay out tactics for how to connect with customers and convince them to buy what the company is selling. 

Marketing plans will vary according to the specifics of the industry, target market, and business, but they should aim to include descriptions of and strategies for the following:

• A target customer : Including market size, demographics, traits, and relevant trends
• Value propositions or business differentiators : An overview of the company’s competitive advantage with regard to employees, certifications, and offerings
• A sales and marketing plan : Including methods, channels, and a customer’s journey through interacting with the business
• Goals : Should cover different aspects of the marketing and sales strategy, such as social media follower growth, public relations opportunities, and sales targets
• An execution plan : Should detail tactics and break down higher-level goals into specific actions
• A budget : Detailing how much different marketing projects and activities will cost

How Much Does It Cost to Start a Business?

Business start-up costs will vary depending on the industry, business activity, and product or service offered. Home-based online businesses will usually cost less than those that require an office setting to meet with customers. The estimated cost can be calculated by first identifying a list of expenses and then researching and requesting quotes for each one. Use the SBA’s start-up costs calculator for common types of expenses associated with starting a small business.

What Should I Do Before Starting a Business?

Entrepreneurs seeking to start their own business should fully research and understand all the legal and funding considerations involved, conduct market research, and create marketing and business plans. They will also need to secure any necessary permits, licenses, funding, and business bank accounts.

What Types of Funding Are Available to Start a Business?

Start-up capital can come in the form of loans, grants, crowdfunding, venture capital, or self-funding. Note that the federal government does not provide grant funding for the purposes of starting a business, although some private sources do.

Do You Need to Write a Business Plan?

Business plans are comprehensive documents that lay out the most important information about a business. They reference its growth, development, and decision-making processes, and financial institutions and potential investors and partners generally request to review them in advance of agreeing to provide funding or to collaborate.

Starting a business is no easy feat, but research and preparation can help smooth the way. Having a firm understanding of your target market, competition, industry, goals, company structure, funding requirements, legal regulations, and marketing strategy, as well as conducting research and consulting experts where necessary, are all things that entrepreneurs can do to set themselves up for success.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. " Calculate Your Startup Costs ."

U.S. Small Business Administration. “ Fund Your Business .”

U.S. Small Business Administration. “ Grants .”

U.S. Small Business Administration. “ Loans .”

U.S. Small Business Administration. “ Pick Your Business Location .”

U.S. Small Business Administration. “ Choose a Business Structure .”

Internal Revenue Service. “ Do You Need an EIN? ”

U.S. Small Business Administration. “ Get Federal and State Tax ID Numbers .”

U.S. Small Business Administration. “ Register Your Business .”

U.S. Small Business Administration. “ Apply for Licenses and Permits .”

U.S. Small Business Administration. “ Marketing and Sales .”

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What is a Bankable Business Plan ?-Katzenbar Limited

Katzenbar Limited

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What is a Bankable Business Plan ?

We are often asked “ what is the difference between a Bankable Business Plan and other similar documents” : such as a bankable feasibility study, proposal, or a normal short business plan.

The main difference is probably the intent – a Bankable Business Plan (BBP) is a single   unified document, de-risking the opportunity and aiming to persuade the reader that this business opportunity is a ‘sure thing’.  

To do this the BBP needs to lead the reader through the opportunity and your proposed execution in quite some detail – see below.  (Rarely is a BBP less than 100 pages, and may be over 200).

A Bankable Business Plan is usually used for Loan Funding, especially if the loan is unsecured (other than by the business itself).  Thus, the financier’s main concerns are that the correct amount has been budgeted and that their money will be repaid timeously. 

The Funder will typically make a ‘go / no go’ decision purely upon reading the BBP and their Due Diligence; and will probably not take an active role in the company.  

In comparison, if the financing is Equity based, the financier will share in your upside and is hoping for a significant Return On Investment (including selling their shares). 

Initially, this type of funding probably only needs a Pitch Deck or short business plan; thereafter the financier will engage in discussions with you.

As well as shares, the Investor will want regular feedback as to how their money is being spent.  

Business Plans come in all shapes and sizes, but often the shortfalls to a Bankable Business Plan (BBP) are in the following areas (listed in descending importance).

• Executive Summary – This should be 1 page only and at the start of the document !

It should guide the reader through the document (with cross references) highlighting the most important points.  It must clearly state how much funding is required and the repayment.  The Executive Summary is the BBP’s ‘elevator   pitch’ . .

• Financial Projections – Too often spreadsheets are simply pasted into the document with little or no explanation.  A BBP should have an explanation of each line in the spreadsheet, so that the Funder understands how the income is generated and how the money will be spent.
• Marketing Plan – This needs to be more than an ‘advertising budget’.  We recommend that the writer uses the 4 P’s tool to guide their explanation (Product, Price, Place, Promotion).  We also find the AIDA tool useful to help you structure Promotion i.e. your marketing /sales plan (Awareness, Interest, Desire, Action).
• Who – CV’s should be included for each of the Directors – these are a key part of the Due Diligence, thus should not be in the appendices !  
• Feasibility – Usually the Funder will not know the industry as well as you, possibly they will also not know the country/region.  It is therefore useful to ground the feasibility with an overview of these basics. The Feasibility should also include your key competitors and main suppliers (±1 page for each).

Motivation of Demand & Price may also be necessary..

We like to draw upon this information to start the Marketing Plan with a statement of the business opportunity.

Bottomline – the BBP is what you are promising, and the Funder will expect you to follow what is agreed in the BBP.  You are also requesting a sizeable amount of money, i t is therefore worth spending time and effort to get the BBP right – this is your future !!

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