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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.

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How To Write a Business Plan

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Starting a business is a wild ride, and a solid business plan can be the key to keeping you on track. A business plan is essentially a roadmap for your business — outlining your goals, strategies, market analysis and financial projections. Not only will it guide your decision-making, a business plan can help you secure funding with a loan or from investors .

Writing a business plan can seem like a huge task, but taking it one step at a time can break the plan down into manageable milestones. Here is our step-by-step guide on how to write a business plan.

Table of contents

• Write your executive summary
• Do your market research homework
• Set your business goals and objectives
• Plan your business strategy
• Describe your product or service
• Crunch the numbers
• Finalize your business plan

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Step 1: Write your executive summary

Though this will be the first page of your business plan , we recommend you actually write the executive summary last. That’s because an executive summary highlights what’s to come in the business plan but in a more condensed fashion.

An executive summary gives stakeholders who are reading your business plan the key points quickly without having to comb through pages and pages. Be sure to cover each successive point in a concise manner, and include as much data as necessary to support your claims.

You’ll cover other things too, but answer these basic questions in your executive summary:

• Idea: What’s your business concept? What problem does your business solve? What are your business goals?
• Product: What’s your product/service and how is it different?
• Market: Who’s your audience? How will you reach customers?
• Finance: How much will your idea cost? And if you’re seeking funding, how much money do you need? How much do you expect to earn? If you’ve already started, where is your revenue at now?

Step 2: Do your market research homework

The next step in writing a business plan is to conduct market research . This involves gathering information about your target market (or customer persona), your competition, and the industry as a whole. You can use a variety of research methods such as surveys, focus groups, and online research to gather this information. Your method may be formal or more casual, just make sure that you’re getting good data back.

This research will help you to understand the needs of your target market and the potential demand for your product or service—essential aspects of starting and growing a successful business.

Step 3: Set your business goals and objectives

Once you’ve completed your market research, you can begin to define your business goals and objectives. What is the problem you want to solve? What’s your vision for the future? Where do you want to be in a year from now?

Use this step to decide what you want to achieve with your business, both in the short and long term. Try to set SMART goals—specific, measurable, achievable, relevant, and time-bound benchmarks—that will help you to stay focused and motivated as you build your business.

Step 4: Plan your business strategy

Your business strategy is how you plan to reach your goals and objectives. This includes details on positioning your product or service, marketing and sales strategies, operational plans, and the organizational structure of your small business.

Make sure to include key roles and responsibilities for each team member if you’re in a business entity with multiple people.

Step 5: Describe your product or service

In this section, get into the nitty-gritty of your product or service. Go into depth regarding the features, benefits, target market, and any patents or proprietary tech you have. Make sure to paint a clear picture of what sets your product apart from the competition—and don’t forget to highlight any customer benefits.

Step 6: Crunch the numbers

Financial analysis is an essential part of your business plan. If you’re already in business that includes your profit and loss statement , cash flow statement and balance sheet .

These financial projections will give investors and lenders an understanding of the financial health of your business and the potential return on investment.

You may want to work with a financial professional to ensure your financial projections are realistic and accurate.

Step 7: Finalize your business plan

Once you’ve completed everything, it's time to finalize your business plan. This involves reviewing and editing your plan to ensure that it is clear, concise, and easy to understand.

You should also have someone else review your plan to get a fresh perspective and identify any areas that may need improvement. You could even work with a free SCORE mentor on your business plan or use a SCORE business plan template for more detailed guidance.

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The takeaway

Writing a business plan is an essential process for any forward-thinking entrepreneur or business owner. A business plan requires a lot of up-front research, planning, and attention to detail, but it’s worthwhile. Creating a comprehensive business plan can help you achieve your business goals and secure the funding you need.

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How To Write the Funding Request for Your Business Plan

What goes into the funding request, parts of the funding request, important points to remember when writing your request, frequently asked questions (faqs).

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A business plan contains many sections, and if you plan to seek funding for your business, you will need to include the funding request section. The good news is that this section of your business plan is only needed if you plan to ask for outside business funding. If you're not seeking financial help, you can leave it out of your business plan. There are a variety of  ways to fund your business  without debt or investors. Below, we'll cover how to write the funding request section of your business plan.

Key Takeaways

• The funding request section of your business plan is required if you plan to seek funding from a lender or investors.
• You'll want to include information on the business, your current financial situation, how the money will be used, and more.
• Tailor each funding request to the specific funding source, and make sure you ask for enough money to keep your business going.

The funding request section provides information on your future financial plans, such as when and how much money you might need. You will also include the possible sources you could consider for securing your funds, such as loans or crowdfunding. Later, you can update this section when you need outside funding again for business growth.

An Outline of the Business

Yes, you've done this already in past sections, but you want to give potential lenders and investors a recap of your business. In some cases, you might simply share the funding request section so you need to have your business details such as what you provide, information about your target market, your structure (i.e. LLC), owners' and members' information (for partnerships and corporations), and any successes you've had to date in your business.

Current Financial Situation

Again, you've provided some financial information in the financial data section , but it doesn't hurt to summarize. If you're submitting just the funding request, you'll need this information to help financial sources understand your money situation.

Provide financial details such as income and cash flow statements, and balance sheets in your funding request section.

Offer your projected financial information as well. If you're asking for a loan for which you'll be offering collateral, include information about the asset. If the business had debt, outline your plan for paying it off. Finally, share how you'll pay the loan or what sort of return on investment (ROI) investors can expect by investing in your business.

How Much Money Do You Need Now and in the Future?

Indicate what type of funding you're asking for such as a loan or investment. Outline what you need now and what you might need in the future as far as five years out. 

How Will the Funds Be Used?

Detail how you'll be using the money, whether it's for inventory, paying a debt, buying equipment, hiring help, and more. If you plan to use the money for several things, highlight each and how much money will go to each.

Most financial sources would rather invest in things that grow a thriving business than things that pay for debt or overhead expenses. 

Current and Future Financial Plans

Current and future financial plans include items such as loan repayment schedules or plans to sell the business. If you're getting a loan, outline your plans for repayment (although most lenders will have their own schedules). If you have plans to sell the business, let the lender know that and how it will affect them. Other issues to consider are relocation (if you move) or a buyout. Finally, let investors know how they can exit the deal, such as cashing out (and how long before they can do that).

You're asking for money, so you need to always be professional and know your business inside and out. Here are some other things to keep in mind:

• Tailor your funding request to each financial source : Lenders and investors need different information, such as loan repayment versus ROI, so create different reports for each. 
• Keep your funding sources in mind : Each resource will have different questions and concerns. Do a little research so you can address them in your report.
• Ask for enough to keep your business going : Don't be stingy, as you don't want your business to fail from a lack of money. At the same time, don't be greedy, asking for more than you need. 

How do you request funding for a nonprofit?

Most nonprofits seek funding in the form of grants. Write a grant proposal that includes information on the project or organization, preliminary budget needs, and more. Be sure to format it with a cover letter, proposal summary, the introduction of the organization, problem statement, objectives, methods, evaluation, future funding needs, and the budget.

What are three methods of funding?

Grants and scholarships, equity financing, and debt financing are the main three methods of funding for small businesses . Grants and scholarships do not need to be repaid and are often best for nonprofit organizations. Equity financing is when you receive money in exchange for ownership and profits. Debt financing is when you borrow money that needs to be repaid.

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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, related articles.

How to get a startup business loan: 5 steps

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How to get a business loan in 6 steps

How to create a business budget

How to Create a Startup Funding Proposal: 8 Samples and Templates to Guide You

Being a founder is difficult. Managing the day-to-day as a founder while trying to secure capital for your business can almost feel impossible. Thankfully, there are different tools and techniques that founders can use to systemize their fundraise to focus on what truly matters, building their business.

One of those tools is a startup funding proposal. In this guide, we’ll break down what a startup funding proposal is and how you can leverage it to build momentum in your fundraise.

What Is a Startup Funding Proposal?

A startup funding proposal is a document that helps startup founders share an overview of their business and make the case for why they should receive funding. A startup funding proposal can be boiled down to help founders layout 3 things:

• What — what does your startup do
• How — how does your startup or product help customers accomplish what they are seeking
• Why — why does your startup need funding and why should an investor fund your business

Related Resource: How to Write a Business Plan For Your Startup

Types of Startup Funding Proposals

Like any business document, there are many ways to approach a startup funding proposal. Ultimately it will come down to pulling the pieces and tactics that work best for your business. Investors are seeing hundreds, if not thousands, of deals a month so it is important to have your assets buttoned up to move quickly and build conviction during a raise. Check out a couple of popular types of funding proposals below:

Traditional Startup Funding Proposal

The most traditional or “standard” standard funding proposal is generally a written and visual document that is created using word processing software and/or design tools.

A traditional proposal is great because it allows you to share context with every aspect of your business. For example, if you include a chart of growth you’ll be able to explicitly write out why that was and what your plan is for future growth.

This document is generally designed to fit your brand and will hit on the key components of your business is structured and predictable way. We hit on what to include in your proposal below.

Startup Funding Proposal Pitch or Presentation

The most common approach we see to a fundraise or proposal is the pitch deck. Pitch decks take the same components as any proposal and fit them into a visual pitch deck that can be easily navigated and understood by a potential investor.

Pitch decks are not required by investors by are generally expected and are a great tool that can help you efficiently close your round. To learn more about building your pitch deck, check out a few of our key resources below:

• Tips for Creating an Investor Pitch Deck
• 18 Pitch Deck Examples for Any Startup
• Our Teaser Pitch Deck Template

1-on-1 Proposals (Elevator Pitch)

A 1 on 1 proposal or an elevator pitch is the quickest version of any proposal. Every founder should have an elevator pitch in their back pocket and is a complementary tool to any of the other funding proposals mentioned here.

As the team at VestBee puts it, “Elevator pitch” or “elevator speech” is a laconic but compelling introduction that can be communicated in the amount of time it takes someone to ride an elevator, usually around 30 seconds. It can serve you for fundraising purposes, personal introduction, or landing a prospective client.”

Email Proposal

Another common way to share a startup funding proposal via email. While the content might be similar to what is seen in a “traditional” funding proposal this allows you to hit investors where they spend their time – their inbox.

The format will follow a traditional proposal with less emphasis on visual aspects and more emphasis on the written content. Check out an example from our Update Template Library below:

Related Resource: How to Write the Perfect Investment Memo

Investor Relationship Hub

Lastly, there is an investor relationship hub or data room that can be used to share your proposal with potential investors. A hub is a great place to curate multiple documents or assets that will be needed during your fundraise. For example, you could share your funding proposal and your financials if they are requested by a potential investor.

Related Resource: What Should be in an Investor Data Room?

What to Include in Your Startup Funding Proposal

How you share your funding proposal might differ but ultimately the components are generally closely related from one proposal to the next. However, be sure that you are building this for your business. There is no prescriptive template that will work for every business.

Project Summary

First things first, you’ll want to start with a summary of your project or your business. This can be a high-level overview of what your proposal encompasses and will give an investor the context they need for the rest of the proposal. A couple of ideas that are worth hitting on:

• What your company does and how it’s different from existing solutions to pressing problems.
• Existing market gaps and how your product covers them.
• The importance of your product in your industry and how it improves the industry.
• Existing resources and manpower, investment requirements, and potential limitations.

Current Performance and Financial Report

Of course, investors want to see how your business has been performing. The data and metrics around your business are generally how an investor builds conviction and further interest in your business. We suggest using your best judgment when it comes to the level of metrics or financials that you’d like to share. A couple examples of what you might share:

• Current assets and liabilities
• MVP presentation for companies still in the ideation stage
• Appendix with financial reports

Related Resource: ​​ Building A Startup Financial Model That Works

Existing Investors and Partners

Inevitably investors will want to know who else you have raised capital from and partnered with in the past. Include a brief description of the different investors you have on your cap table and be ready to field additional questions if they have any.

Pro tip: The first place an investor will go to when performing due diligence is your current investors. Make sure you have a strong relationship and good communication with your current investors.

Market Study and Sales Goals

Investors will also care about your customer acquisition efforts and want to make sure you can repeatably find and close new customers. A couple of things that might be important to include in this section:

• Product pricing and information
• Revenue targets and goals
• Customer acquisition model and efforts
• Sales and marketing related KPIs
• Stories or testimonials from happy customers

Current Valuation, Investment Requirements, and Expected Returns

This is an opportunity to lay out your cap table and explain your current valuation, investment requirements, and what future valuations could look like. As always, we suggest using your best judgment when it comes to what level of detail you’d like to share about your cap table.

Potential Pitfalls and Solutions

There is an inherent risk when investing in any startup. It is important to make sure potential investors are aware of this. Layout the common pitfalls your startup might face and stop you from achieving your goals. Next, lay out the solutions to these problems and how you plan to tackle them if/when they arise.

8 Startup Funding Proposal Samples and Templates

Below are 8 proposal templates to help you kick off your next fundraise. Note that some of these are technically investor updates and not designed for first-time fundraising. Keep in mind that a startup funding proposal could also be utilized for additional funding after the first round of funding.

1. An Investment Summary Template by Underscore VC

Underscore VC is a seed-stage venture fund based out of Boston. As the team at Underscore writes :

“As part of this, we strongly recommend you write out a pitch narrative before you start to build a pitch deck. “Writing the prose forces you to fill in the gaps that can remain if you just put bullets on a slide,” says Lily Lyman, Underscore VC Partner. “It becomes less about how you present, and more about what you present.”

This exercise can help you synthesize your thoughts, smooth transitions, and craft a logical, compelling story. It also helps you include all necessary information and think through your answers to tough questions.

Check out the template here .

2. The Visible “Standard” Investor Update Template

Our Standard investor update template is great for communicating with existing investors. If you are regularly sending Updates to their investors they should know when you are beginning to raise capital again and can almost be treated as an investment proposal.

Check out the template for our standard investor update template here .

3. Sharing a Fundraising Pitch via Video

Videos are a great way to give the right context to the right investors in a concise and quick way. Video is a great supporting tool for any other information or documents you might be sending over. For example, you can include a few charts or metrics and some company information and use the video to further explain the data and growth plans. Check out the template here .

4. Financial Funding Proposal

The team at Revv put together a plug-and-play financial funding proposal. As they wrote, “A funding proposal must provide details of your company’s financials to obtain the right amount of funding. Check out our funding proposal template personalized for your business.” Check out the template here .

5. Investor Proposal Template for SaaS Companies

The team at Revv put together a template to help founders grab the attention of investors. As they wrote, “With so many Investing Agencies, this Investor proposal will surely leave an impact on your company in the long run.” Check out the template here .

6. Startup Funding Proposal Sample

Template.net has created a downloadable funding proposal template that can be edited using any tool. As they wrote, “Get your business idea off the ground by winning investors for your business through this Startup Investment Proposal. Fascinate investors with how you are going to get your business into the spotlight and explain in vivid detail your goals or target for the business.” Check out the template here .

7. Simple Proposal Template

Best Templates has created a generic proposal template that can be molded to fit most use cases. As they wrote, “Use this Simple Proposal Template for any of your proposal needs. This 14-page proposal template is easily editable and fully customizable using any chosen application or program that supports MS Word or Pages file formats.”

8. Sample Investment Proposal for Morgan Stanley

Another example is from the team at Morgan Stanley. The template is commonly used by their team and can be applied to most proposal use cases.

Connect With More Investors and Tell Your Story With Visible

Being able to tie everything together and build a strategy for your fundraise will be an integral part of your fundraising success. Check out how Visible can help you every step of the way below:

Visible Connect — Finding the right investors for your business can be tricky. Using Visible Connect, filter investors by different categories (like stage, check size, geography, focus, and more) to find the right investors for your business. Give it a try here .

Pitch Deck Sharing — Once you’ve built out your target list of investors, you can start sharing your pitch deck with them directly from Visible. You can customize your sharing settings (like email gated, password gated, etc.) and even add your own domain. Give it a try here .

Fundraising CRM — Our Fundraising CRM brings all of your data together. Set up tailored stages , custom fields , take notes, and track activity for different investors to help you build momentum in your raise. We’ll show how each individual investor is engaging with your Updates, Decks, and Dashboards. Give it a try here .

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How to Finance a Business: 4 Options to Consider

• 04 Aug 2020

In entrepreneurship, the old adage “you must spend money to make money” often rings true.

Once you’ve developed an innovative business idea , identified a market need, and created a value proposition , you need to acquire funding to get your company up and running.

The key to financing a business is keeping expenses as low as possible. You also want to ensure invested money is used to gain insight into how to proceed.

In the online course Entrepreneurship Essentials , taught by Harvard Business School Professor William Sahlman, entrepreneurship is described as the process of "spending money to produce information about future possibilities."

For instance, using funds to rent a beautiful office may be tempting, but leveraging it to run tests, conduct market research, or identify more efficient means of production can help you learn about your product, pivot accordingly, and expand your company’s growth potential.

Here’s a guide for assessing startup costs and expenses, along with four business financing options to consider.

Access your free e-book today.

How Difficult Is It to Fund a Startup Business?

Securing adequate funding for your business can be challenging. However, it’s important to remember that starting your own business is a large investment that should be given an appropriate period of time to succeed.

Often, new businesses need to raise funding quickly and efficiently to properly grow and thrive in their given market, but it can be difficult to adhere to various lending requirements without existing financial information. In spite of these challenges, there are various financial resources that can help you get your business off the ground.

Evaluate Startup Costs and Expenses

Before deciding how to finance your business, determine how much money you anticipate needing for startup costs and regular expenses. Whether you run a brick-and-mortar or online business, consider the following when taking stock of expenses:

• Licenses and permits
• Trademarks, copyrights, or patents for your brand and products
• Business insurance
• Legal or accounting assistance
• Rent and utilities (for brick-and-mortar businesses)
• Equipment required for production
• Website platforms
• Marketing materials (both print and digital)
• Shipping supplies
• Subscriptions to content management systems and sales or marketing platforms
• Market research

As your business scales , you may need to expand your expense list to include:

• Employee salaries
• Rent and utilities for office space
• Travel expenses
• Conferences, conventions, and networking events

These lists aren’t exhaustive—every business’s needs are different—but they provide a starting point for you to brainstorm all possible expenses for your startup. When your list is complete, calculate your total estimated startup cost. This number is the amount of funding you’ll need to invest when starting your company.

Before raising capital, it’s also wise to familiarize yourself with how to read and create a balance sheet, income statement, and statement of cash flows. Financial literacy is a critical skill for entrepreneurs , and being aware of these financial statements will ensure you’re taking the necessary steps to become a responsible business owner.

Now, how do you obtain this necessary capital? Here are four sources of funding for your business’s launch.

Related: 6 Questions to Ask Before Starting a Business

How to Finance a Business

1. self-funding.

If your projected expenses add up to a manageable amount, you may be able to fund the business yourself. This can involve taking money from your personal savings account, dipping into your retirement funds, using credit cards and paying back the debt, or asking for donations from friends and family.

Self-funding comes with the risk of long-term debt or losing personal savings and, potentially, money from loved ones. However, it’s a financing option that allows you to retain full ownership over your business, which is often seen as a downside of raising venture capital from investors.

2. Crowdfunding

If you believe your business can garner a fan base, crowdfunding could be a good option. Crowdfunding platforms, such as Kickstarter, Indiegogo, and Patreon enable entrepreneurs to pitch their products and request financial backing.

If people are intrigued and support your product, they can donate to your company in exchange for a free item, discount code, or acknowledgment once your business is up and running. For this reason, crowdfunding is typically a good fit for business-to-consumer startup companies with physical products, although there are exceptions. Each platform has its own terms and conditions, which you should read before selecting one.

Like self-funding, crowdfunding allows you to maintain full ownership of your company, as long as you’re willing to thank your donors with free or discounted products. A few brands that got their start using crowdfunding are Oculus, PopSockets, and Allbirds.

3. Taking Out a Small Business Loan

Applying for a small business loan is another way to secure necessary startup funds. Before applying to banks and credit unions, prepare a business plan, value proposition, expense report, and financial projections for the next five years. Most banks or credit unions will ask to see some combination of these documents when considering your application.

Be sure to weigh the pros and cons of every bank loan offer you receive. Which gives you the lowest interest rate? What are the terms and conditions?

As Sahlman says in Entrepreneurship Essentials , “The terms of financing have a major impact on the success or failure of a venture.”

Related: What Does It Take to Be a Successful Entrepreneur?

4. Raising Venture Capital from Investors

Another avenue for funding your business is raising venture capital from investors.

“Successful companies are always forming hypotheses and testing all aspects of their business,” Sahlman explains in Entrepreneurship Essentials . “Ventures typically need outside investors to run experiments.”

Before reaching out to investors, prepare a business plan, value proposition, financial projections, and a tight, effective pitch deck.

The process of obtaining venture capital has been likened to dating —investors typically want to get to know you and your business before they commit.

One way to start this process is by asking a mutual connection to introduce you to investors. Your contact can serve as a character reference, if needed.

This process can take a while. If you’re looking for quick, easy money to start your business, raising venture capital may not be the right choice. Investors often want to see how you run your company before deciding to invest. Even after they supply funding, they may bide their time to see what you do with the money before investing more.

“Sensible investors stage their commitment to a company—they give enough money to conduct a value-changing test,” Sahlman says. “They preserve the right to abandon the venture by refusing to invest more money. They also design contracts that give them the right to invest more if the test yields encouraging results.”

There’s one factor that sets this option apart: Investors want to own a large, valuable share of your company in return for their investment. This allows them to sell their share in the future, when they predict your company will be worth a lot of money.

In Entrepreneurship Essentials , Sahlman shares Facebook’s journey with various investors and notes that it received $500,000 from angel investor Peter Thiel in its first round of funding in 2004. Just one year later, Facebook received a $12.7 million investment from prominent venture capitalist Jim Breyer.

Resist the urge to go big right away. Perhaps raising venture capital from investors is a second or third step for the funding of your business.

What's the Best Way to Finance Your Business?

Keep in mind that no two businesses are the same—only you know the ins and outs of your company’s needs. By weighing the risks and rewards of each funding option, along with your personal finances, predicted startup costs, and business expenses, you can select the best option for financing your business.

Are you looking to learn more about financing your venture? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

This post was updated on June 3, 2022. It was originally published on August 4, 2020.

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Why A Thoughtful Business Plan Is Essential For Success

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Starting a business is an exciting journey, full of opportunities and challenges. For women entrepreneurs, particularly those transitioning from corporate life to entrepreneurship, the path can feel daunting. But with the right roadmap (a well-thought-out business plan), you can navigate the uncertainties and set your business up for success.

A business plan is more than just a document; it's your blueprint for building and growing your business. It outlines your goals, strategies, and the steps you need to take to achieve them. A strong business plan not only guides your decisions but also communicates your vision to potential investors, partners, and employees.

Here’s why a business plan is crucial and how you can create one that will steer your business toward success.

The Importance of a Well-Thought-Out Business Plan

1. clarifies your vision and objectives.

As you build out your business plan it forces you to think deeply about your business idea and if it’s a viable idea. What exactly are you trying to achieve? What are your short-term and long-term goals? By putting these thoughts on paper, you create a clear vision that will guide every decision you make.

2. Helps You Understand Your Market

Researching and writing a business plan requires you to analyze your market. Who are your competitors? Who is your target audience? What are the market trends? This understanding helps you position your business strategically and identify opportunities for growth.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024, 3. defines your strategy.

A business plan includes your marketing strategy, sales approach, and operational plan and outlines how you will achieve objectives. This strategic framework ensures that your efforts are aligned and focused on achieving your goals.

4. Secures Funding

If you need financial support to start or grow your business, a well-prepared business plan is essential. Investors and lenders want to see a clear plan for how you will generate revenue and repay any loans. A business plan that demonstrates a thorough understanding of your industry and a solid strategy is more likely to attract funding.

5. Guides Your Decision-Making

A business plan serves as a reference point, helping you make informed decisions that align with your long-term goals. By consistently referring to your business plan, you ensure that every decision contributes to the overarching vision and objectives of your business, ultimately driving growth and success.

6. Tracks Your Progress

A business plan includes milestones and key performance indicators (KPIs) that allow you to track your progress. Regularly reviewing your business plan helps you stay on course, adjust your strategies as needed, and celebrate your successes.

The bottom line is that creating a business plan is a crucial step in turning your entrepreneurial dreams into reality. It’s your roadmap, guiding you through the complexities of starting and growing a business. For women entrepreneurs, especially those transitioning from a corporate career, a well-thought-out business plan can provide the clarity, confidence, and direction needed to succeed. Take the time to craft a business plan that reflects your vision and sets the foundation for a thriving, profitable business.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and also guides established business owners to grow their businesses to more profitably.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

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Funding Your Dreams: Low-Cost Business Ideas for Every Aspiring Entrepreneur

Published on Sept. 2, 2024

By: Steve Strauss

• Today's digital world drastically reduces start-up costs, making entrepreneurship accessible to almost anyone.
• Even traditional businesses can now thrive with minimal overhead by leveraging home offices and affordable marketing tools.
• Low-cost business options range from online roles like virtual assistants to hands-on services, like pet-sitting and handyman work.

While being your own boss has long been a dream for many people, it was not so easy not so long ago. Even just a generation ago, online businesses were not really a thing, and as such, if you wanted to become an entrepreneur, you likely had to start some sort of brick-and-mortar business.

But not today.

The internet changed many things, but one of the best parts of the online digital revolution is that starting a business is easier, faster, and way less expensive than ever before. Gone are the days of renting an expensive office or storefront, hiring staff, paying for overhead, and so on.

Just about anyone can start an affordable business -- often for even under, say, $500. Here are seven examples -- a mix of online and offline businesses. Even offline, physical businesses are cheaper and easier to start nowadays because people can much more easily work out of their homes and marketing can be very inexpensive, or even, as in the case of social media, free.

1. Virtual assistant

Why a business credit card could transform your small business.

These business credit cards that offer a convenient and efficient way to separate personal and business expenses, simplifying accounting and tax reporting.

Additionally, business cards can provide valuable perks such as rewards points, cashback, and expense tracking tools, enhancing financial management and the potential to help save money in the long run.

• Administrative help
• Email management
• Conducting research
• Content creation
• And much more

The demand for VAs is growing, particularly among businesses that need help with day-to-day tasks but are not ready to hire full-time staff. Starting this business requires little more than a computer, internet access, and some apps and software.

2. Social media management

Along the same lines, while we all know that having a social media presence is vital in today's always-on, too-connected world, many people, small businesses especially, can't keep up with it. Either they don't have the content creation chops, or the technical know-how, time, or interest to manage their social media.

That's where you come in.

You can offer services like content creation, post scheduling, and performance analysis. The email marketing company Vertical Response found in a survey that 43% of small businesses spend about six hours a week on social media management. Get yourself a few clients, and you will have a full schedule (and a fat bank account!)

3. Online coaching or teaching

Coaches are all the rage these days. Whether it is selling a course or one-on-one coaching packages, online coaches sell and teach everything from yoga and weight loss to money management and online marketing. Simply set up a website, market yourself with some pay-per-click ads, and away you go.

Similarly, tutoring and teaching online has also exploded in recent years. My own daughter spent the year after college teaching Chinese kids how to speak English via the internet. She made bank (although sleep was not part of that bank, as she had to wake up at 3:00 a.m. to fit their schedule). Online tutoring platforms can be found with a simple Google search.

Now let's pivot and look at a couple of offline businesses you could also start on the cheap.

4. Pet sitting

We all love our pets, that's for sure (although I am sorry to report that our goldendoodle Hazel is, statistically speaking, the very best dog in the world). And as pet ownership continues to grow, so does the need for reliable pet care services.

If you love animals, pet sitting can be a rewarding and flexible business. Apps like Rover allow you to advertise your business and it handles the administrative side of things. Your responsibilities may include feeding, walking, grooming, and playing with pets while their owners are out of town or at work. The start-up costs are low, typically limited to basic supplies and insurance.

6. House and office cleaning

Starting a house or commercial office cleaning business can be a lucrative and affordable option. This business requires minimal initial investment and skill, just some cleaning supplies and basic equipment. Undercut the competition with your prices and you are in business (literally).

7. Handyperson

Finally, if you are good at fixing things, this old standby remains a very viable option. From home repairs to painting, plumbing, and electrical work, there is no shortage of things around the house for a handyperson to fix. Start-up costs are minimal, and advertising on sites like Craigslist is very cheap, often free.

So there you have it. Entrepreneurship on a dime is within your grasp. Whether it is managing social media or providing cleaning services, starting small and cheap really is quite possible.

Our Research Expert

Steve Strauss is the president of a boutique content company, The Strauss Group, and is a bestselling small business author and columnist. He can be reached at www.MrAllBiz.com, or at [email protected] .

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Ever Thought of Starting a Business? Here’s How.

Are you looking to turn your hobby or passion into your next career? Do you have a killer idea for a side hustle or a new business? Sick of working for the man and ready to strike out on your own? If so, you’ve come to the right place.

Starting your own business can be an immensely rewarding experience, but it also carries its fair share of challenges. Whether you need help deciding what type of business to run, tracking down funding or finding the best financial products to suit your style, NerdWallet UK can help you every step of the way.

We’ve got guides on how to start all sorts of different businesses, from dog walking to baking and everything in between. These guides give you the tools and know-how to make a start. Take a look below.

Find out more about how to…

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How To Start A Business In Seven Steps

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17 Sources of Business Finance For Small Businesses & Start Ups

From unexpected opportunities to growth plans to cash flow struggles, there are a host of reasons why you might need business finance. But not every form of borrowing suits every situation. Read on for 17 sources of business finance that can help you meet your goals.

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From registering your business to deciding on a name and drawing up a budget, there’s lots to wrap your head around when starting up a new business. Our free, downloadable tools can demystify the process of setting up a new venture and guide you through the first steps.

Unsure about the steps you need to take to get your new venture off the ground? Our downloadable new business checklist will walk you through the process of setting up your business. Simply tick off each step when you’re done and move on to the next!

Ready to put your plans down in writing? A business plan sets out all the key information about your venture, and business plans are often essential to access funding or convince backers of your ideas. Our downloadable template gives you all the tools you need to write a winning plan.

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Lulalend is now Lula. We have a new name, a new look, but we're still your friends in funding 😃.

Every Type of Funding for Small Businesses Explained for South African Businesses

If you own or work at an SME in South Africa, you know how important having access to funding can be. 

However, finding the right small business funding takes a lot of work. To do this, you need to do a lot of research and find out what types of funding for small businesses are out there.

But hold up – why do businesses need funding in the first place? In short, small business funding helps you keep cash flow smooth and prepare for unexpected challenges.

Having no access to financial support, on the other hand, means that you risk:

• Not having enough working capital to cover unforeseen costs due to external factors like load-shedding, labour strikes or material price hikes.
• Operations halting temporarily if client payments are late and income dries up.
• Missing opportunities for business expansion because you’re locked in a cash flow cycle.

Not having access to credit could even push you to use personal loans or riskier financing in a desperate bid to keep your business from going belly up. 

However, the truth is that very few SMEs and start-ups in South Africa have access to proper business funding due to stringent requirements and high interest rates . 

Even though SMEs make up 98% of registered SA companies , they only account for a fraction of the country’s outstanding business loans, according to a paper by the Organisation for Economic Co-operation and Development ( OECD ).

Knowing what types of funding are available for small businesses and how to access them can give you a huge advantage over most of your competitors.  

Here we explore the 16 most popular types of funding available for small businesses in South Africa, including:  

Traditional private funding

• Traditional bank loans
• Working capital finance
• Bridge financing
• Credit cards
• Revolving Credit Facility
• Business incubators
• Angel investors
• Venture capital

Government funding

•  Business grants
•  Equity funding
• Incentive opportunities

Other types of SME and private funding

•  Crowdfunding
• Asset financing
• Equipment finance
• Inventory financing
• SME financing platforms

If you’re a business owner, read on to find out what types of small business funding in South Africa you’re eligible for. 

Don’t let a lack of funding hold back your business’s potential. Explore our funding options and access up to R5 million within as little as 24 hours with our fast-track application process. 

Private SME funding in South Africa

Private financial institutions like banks provide many types of funding. If you’re wondering how to get business funding in South Africa , you probably first think of visiting your local bank. 

However, besides banks, private investment can also come from investment firms, incubators, private investors and fintechs that see potential in your business idea .

1. Traditional bank loans

Business loans from banks tend to be traditional one-time lump-sum loans that are paid upfront and have fixed repayment terms . 

Borrowing costs depend on current interest rates and the high fees traditional lenders often charge. 

Only about 9% of small businesses access traditional bank loans , a recent McKinsey report shows, because of stringent requirements and complex loan applications that can take ages to get approved – if at all.

2. Working capital finance

Like a traditional bank loan, working capital finance is a one-time lump sum paid upfront to the borrower. 

Unlike bank funding, however, working capital finance requires no collateral or other equity to get funded. 

Lula’s alternative funding is an example of a provider that gives fast access to working capital through an easy digital application form , no stringent requirements and approval within as little as 24 hours. 

3. Bridging finance

Another alternative to bank loans is a capital advance . This type of funding can be used to cover immediate costs between expected payments. 

The key difference between a traditional loan and a capital advance is that where bank loans have fixed repayment terms, capital advances are short-term loans with flexible repayment terms . This way, business owners can more efficiently cover cash flow gaps. 

4. Credit cards

Whereas regular loans provide an upfront sum repaid over a set term, credit cards give you access to a revolving line of credit that you can repeatedly borrow from up to a set limit. 

Credit cards tend to have much higher interest rates than bank loans, and come with late and overdraft fees. 

Business credit cards are good options for making daily company purchases and issuing cards for employees. However, spending limits are typically too low for credit cards to be used as working capital.

If you’re using a credit card for SME funding, remember to pay off your debt in time to avoid paying high interest rates. 

5. Revolving Credit Facility

Like credit cards, a revolving loan gives you access to a replenishable line of credit that you can repeatedly borrow up to a set limit. 

A revolving credit facility tends to have a much higher limit than a credit card, making it a great financing option for SMEs’ operational purposes and keeping a healthy cash flow when income is sporadic.  

SME funding provider Lula adds that “ a credit facility or revolving capital facility is appealing for small businesses in South Africa because it provides them with flexible access to funds that they can use as needed. It offers a convenient way to manage cash flow fluctuations, cover expenses, and seize business opportunities without having to apply for new funding each time.”

Lula’s Revolving Capital Facility lets business owners borrow up to R5 million at much lower interest rates than a credit card and has no early repayment fees . The facility gives you fast, continuous access to funds, and has a very low cost of capital when used for short-term financial needs.

6. Business incubators

Suppose you’re running a start-up or early-stage small business with a strong business plan and high growth potential. 

In that case, business incubators might be eager to provide start-up capital and help you in business development through their expertise and network. 

Incubators sometimes offer grants to help start-ups get off the ground, partnering with government or non-profits to set up cheap (sometimes free) funding with socio-economic targets like black empowerment. 

Business incubators often provide seed capital to start-up entrepreneurs or connect them with angel investors, venture capitalists, and other types of funding for small businesses while preparing them to scale. 

Some of the most well-known business incubators in South Africa are Raizcorp , SeedEngine and Awethu Project , an accelerator programme focused on social entrepreneurship. 

7. Angel investors

Like business incubators, angel investors are always looking for small businesses in their early stages with a strong business plan and high economic growth potential . If you check their boxes, they might be willing to provide a hefty sum of seed capital in exchange for equity in the business. 

You can attract angel investment by joining platforms that connect entrepreneurs with angel investors, like the South African Investment Network , Johannesburg-based Jozi Angels , and the female empowerment-focused Dazzle Angels .

Keep in mind that finding an angel investor who believes in your business takes persistence (and a lot of pitching), a solid business plan and a strong network.

Working with angel investment means you also have to give up a share of equity and, while you gain an experienced business partner, you also relegate partial control over the company’s direction in return for funding. 

For many early-stage start-ups, however, the upsides outweigh the potential downsides of this type of equity funding.

8. Venture capital

Venture capital is comparable to angel investors in that it can provide small businesses with funding in return for equity.  

Venture capital firms are business funding companies that focus on investing in early-stage businesses with a high potential for scaling and profit and are often willing to spend a lot of money to see that growth. 

More than with angel investors, you risk losing control and dilution of ownership when using venture capital for business growth. This type of equity funding isn’t for every business owner – but if you’re in the start-up business, willing to take risks, and run highly scalable start-ups , venture capital could be your ticket to the moon. 

The VC funding ecosystem in South Africa is a mix of private VC firms, corporations with VC divisions, government-backed funds, angel investors, incubators, and development finance institutions, like the Small Enterprise Finance Agency (SEFA).

A prime example of this type of hybrid venture funding is the SA SME Fund . This private development programme is a R1.4 billion fund created by JSE-leading companies with the help of the government to invest in high-potential SMEs and start-ups. The fund has a mandate to allocate 50% of its capital to black African-owned businesses. 

Funding doesn’t have to come from a bank or private investor. The South African government recognises the funding gap that exists for SMEs – and is willing to do something about it by creating more small business funding options. 

The National Development Plan (NDP) proposes that for South Africa to overcome poverty, the SME sector would have to grow significantly, and expects that by 2030, 90% of new jobs will be created by the SME sector.

The SA government created various institutes to offer different types of funding for small businesses, the biggest ones being SEFA, the Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF). 

9. Government grants

Grants are non-repayable awards where the government lending agency provides 100% of an SME’s financial needs. These grants are often one-time opportunities to assist new businesses , and the receiving business must spend the funds as specified by the provider. 

Cost-sharing grants don’t cover 100% of a small business’s financial needs – but instead, provide SME funding of 35% of the financial needs or more. The business owner provides the remaining part of the SME funds. 

Some of the key government grant schemes in South Africa are the:

• Agro-Processing Support Scheme (APPS) , which targets SMEs in food and beverage value addition, fertiliser and feed production, fibre processing and furniture manufacturing.
• Black Industrialists Scheme (BIS) , which targets black-owned industrial SMEs.
• Co-operatives Incentive Scheme (CIS ), a 100% grant that aims to improve the viability and competitiveness of co-operative enterprises. 
• National Youth Development Agency (NYDA) , which offers grants and non-financial support to young entrepreneurs.
• Growth Fund , which offers grants and other support to small businesses where permanent jobs are being created.

10. Governmental equity funding

Grant funding isn’t the only type of loan for small businesses that the South African government provides. Under some circumstances, the government funds SMEs in return for a share in the business . Some of the above institutions and grants do this. 

11. (Tax) Incentives

While not a direct form of funding, government incentives can provide financial support to small businesses by providing tax returns or relief. Some examples are: 

• Small Business Corporation (SBC) Tax Relief , where SBCs pay no income tax on part of the taxable income.
• Accelerated Depreciation , which allows small businesses to deduct a portion of the cost of new equipment.
• Employment Tax Incentive , which reduces the employer’s tax based on wages paid.
• Turnover Tax , which offers a flat-rate tax for businesses that have an annual turnover below R1 million. 

Other types of SME and private funding in South Africa

With a lot of private funding inaccessible to South African SMEs, there are many creative ways to raise money that provide much-needed access to business funding . Here are some of them:

12. Crowdfunding

Crowdfunding is a way of raising private funding from individuals through websites and platforms.  

When crowdfunding, you set a fundraising target for a specific business goal and then market the fundraising webpage as well as you can. Individual investors who want to contribute can donate money until the target amount is raised. 

This type of funding for small businesses allows you to raise capital without necessarily incurring debt or giving up equity. Instead, individuals who pledge an amount can be ‘rewarded’ with a product, service or some token . 

Popular crowdfunding platforms are Kickstarter , IndieGoGo , GoFundMe , Thundafund and Uprise Africa . The first two require a strong marketing campaign to attract funding, while GoFundMu caters to events, challenging circumstances, and charitable causes. ThundaFund and Uprise Africa are especially dedicated to crowdfunding African entrepreneurs. 

13. Asset financing

If you have valuable assets on your balance sheets or a lot of purchase orders, you can use them to apply for asset financing. 

Asset financing collateralises your equipment or inventory or provides an advance on purchase orders to give easier access to top funding. 

It’s a popular type of funding for small construction businesses (where it’s also called construction finance ), in the manufacturing industry ( manufacturing finance ), or in other industries where heavy equipment is frequently used or large project invoices are managed.  

14. Equipment financing

Instead of collateralising equipment, you may need to purchase new equipment. Equipment finance is a type of business loan or funding that small businesses use to finance the purchase of equipment necessary for professional services or to run a business. 

Let’s say you want to finance renewable energy to stay operational during power outages – equipment financing could fund your solar panels upfront at a fixed-term repayment. 

15. Inventory financing

Inventory financing is a type of retail financing that can help business owners smooth cash flow gaps between high-demand seasons and inventory purchases . Some inventory finance collateralises a business’s inventory and has late repayment fees. 

A Revolving Capital Facility, Lula’s answer to inventory financing , for example, has flexible repayment terms and can be accessed within as little as 24 hours.

16. SME financing platforms

Is your SME in need of funding with funding options being expensive or out of reach? 

Alternative small business funding solutions like those offered by Lula are bridging the funding gap by providing fast and accessible funding for small businesses in South Africa. 

The digital application process is easy, 100% online, and you can get approval within as little as 24 hours. Instead of needing you to meet stringent requirements, Lula can assess your creditworthiness through smart real-time analysis of your transactional data. 

This is the application process:

• Apply online in minutes
• Lula assesses the application and provides a commitment-free quote
• If accepted, the funds are transferred to your chosen bank account within as little as 24 hours

With a financial partner like Lula, you don’t need to worry about cash flow gaps or lack of funding, nor do you pay for funds when you’re not using them. 

It’s this type of flexible financing that can power small businesses through cash flow turbulence and help them gain an edge over the competition.

Don’t let a lack of funding hold back your business’s potential. Explore our funding options and access up to R5 million in as little as 24 hours with our fast-track application process. 

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We’ll guide you through the essential steps and share helpful tips to smooth the process. Whether you’re just starting or looking to enhance your existing setup, keep reading to unlock the potential of NetSuite for your business!

What is NetSuite, and why should you care?

NetSuite is a cloud-based software that helps businesses manage everything from accounting to customer relations . It’s an all-in-one solution, meaning you don’t have to juggle multiple tools to keep your business running smoothly.

But why is NetSuite such a big deal? It’s because it brings everything together in one place. No more switching between different programs or worrying about data not syncing. With NetSuite, you’ve got everything at your fingertips.

What does NetSuite implementation involve?

So, you’ve decided NetSuite is the way to go. Great choice! But what exactly does NetSuite implementation involve?

First, you need to plan. This means understanding what your business needs and setting clear goals. It’s like building a house-you wouldn’t start without a blueprint.

Customization

NetSuite isn’t a one-size-fits-all solution. You’ll need to customize it to match your business processes. This could involve setting up specific workflows, reports, or dashboards that align with your operations.

Data migration

Moving your existing data into NetSuite is crucial. This step ensures that all your important information is transferred correctly. It’s like moving houses-you don’t want to leave anything behind.

Your team will need to learn how to use NetSuite effectively. This training will ensure everyone is on the same page and can fully take advantage of the system.

How long does it take to implement NetSuite?

The duration required to implement NetSuite costs depends on the business’s size and complexity. For smaller businesses, the process might take a few months, while larger companies with more intricate requirements could take six months or longer.

Keep in mind, the more time you invest in the planning and customization phases of NetSuite CRM, the smoother the implementation process will be.

Understanding NetSuite investment factors

You’re probably wondering about the cost. The cost of implementing NetSuite depends on several factors, such as the level of customization, the size of your business, and the amount of training needed. It’s essential to budget for both the software and the implementation services to avoid surprises down the road.

Benefits of NetSuite implementation

Despite the time and cost involved, the benefits of NetSuite implementation are worth it. You’ll get real-time insights into your business, improve efficiency, and make better decisions. Plus, since it’s cloud-based, you can access it from anywhere, anytime.

Why NetSuite implementation is the key to unlocking your business’s potential

In conclusion, NetSuite implementation is not just a technical shift; it’s a strategic move that can redefine your business operations. By investing time and effort into planning, customizing, and training, you’ll be able to reap the full benefits of this powerful cloud-based solution.

As you navigate your NetSuite journey, remember that the goal is to enhance efficiency, gain insights, and foster growth. Embrace this opportunity, and watch your business thrive in the competitive landscape. Happy implementing!

Want to learn more? Don’t forget to explore our other articles before you leave!

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40 Proven Ways to Fund Your Small Business

Angelique O'Rourke

22 min. read

Updated October 27, 2023

When it comes to funding, there isn’t a one-size-fits-all approach. Aside from every business having unique funding needs, each funding option differs in availability, terms, funding amounts, and eligibility criteria. We’ve compiled a list from a variety of places to help you research and narrow down the best option for your business.

Determine how much funding you’ll need

Estimating your startup costs is not only a  necessary element  of your financial plan, but it can help you determine how much  funding you really need . This can immediately give you a jumpstart on your financing search and narrow down potential options simply based on the amount they offer. 

Additionally, having a cohesive financial plan in place can improve your chances of actually being approved for funding. It showcases forward-thinking on your part and for traditional loans, investors, and any other funds that require a business plan or pitch, it’s necessary to even be considered. 

Once you’ve planned out how much you’ll need, it’s time to survey your options.

• Traditional loans

One of the most widely available options is a traditional business loan. And while the process and requirements may be fairly similar no matter the lender, there are different loan options you’ll want to consider.

1. SBA loans

Small Business Administration loans  are often one of the first places that small business owners in the United States think of looking for a loan, and they’re right to think this way. This can be a great option if you fit the criteria. 

If you’re unsure if you qualify,  take a look at this article  for details on the SBA Loan program. Or if you’ve applied and had your application rejected,  check out this article  for ways to improve your chances of being approved if you reapply.

2. Bank loans

Bank loans may be the most obvious solution for business owners looking for funding. While lending standards have become stricter over time, there are often funds set aside strictly for small businesses depending on the lender. 

Shop around and look for lenders that you can actually talk to a real person when applying. This helps ensure that you’re filling out the necessary paperwork and provides insight into what you can do to  improve your chances  of being approved. You’ll typically have better luck chatting with a real person at a local bank or credit union, so do your research and chat with multiple institutions to find the best fit.

3. Small Business Lending Fund 

This is a dedicated government fund that provides capital for small business loans through specific lenders in each U.S. state. The primary benefit of this program is that it’s designed to grow the economy. 

The more a bank increases its loan output the less it pays for funding. Giving access to loans to more businesses and potentially passing along better rates or terms to business owners. You can review which banks are participating and download an application through the  Treasury website , which is updated on a monthly basis as banks enter or exit the program. 

Entrepreneurs can also look into various  grants  to support their budding idea. These are often difficult to acquire and include very specific eligibility requirements, but that doesn’t mean they can’t be a viable funding option. Here’s a list of places to find that perfect grant for your business.

4. National Association for the Self-Employed Grants

Since 2006 the  National Association for the Self-Employed  has given out $650,000 in grant money. Applicants can receive up to $4,000 and must use the money for marketing, advertising, hiring employees, or expanding facilities. You do have to be a member of the association to apply, which costs $120 a year.

5. Nav’s Small Business Grant

Nav is an online marketplace that matches small business owners with their best business financing options by using credit and finance data. Each quarter, Nav gives away 3 grants, with the top grant winner receiving $10,000. This is to provide relief to small businesses that are struggling right now and hopefully empower them to reach their next level of success.

The application is easy. Simply explain your business, the challenges you are facing, and how the grant money would help push you in the right direction. All details about Nav’s Small Business Grant can be found  here .

6. Small Business Innovation Research Program

One of the more lucrative federal grant programs is the  Small Business Innovation Research Program , which helps businesses with research and development projects.

The program, which is coordinated through the U.S. Small Business Administration, offers several kinds of grants: open, closed, future, and solicitation listing. You’ll want to research which option is best for your company.

Expect a lengthy qualification process and, if selected, a strict measurement plan to ensure the money is going to good use.

7. Amber Grant for Women

Female business owners can take advantage of the  Amber Grant . This grant was launched in 1998 by Womennet to help entrepreneurs succeed. Each month, one woman is selected for a $500 grant. At the end of the year, one of the winners is selected for a $2,000 grant.

It’s a simple application process. You just have to answer a few short-answer questions through an online form and pay a $7 application fee.

8. National Institute of Health Funding 

The  SBIR/STTR grants  provided by the National Institute of Health Funding are going to apply fairly specifically to technology or research-based businesses. If you fall within an eligible business-type, you can speak to a program manager before applying to discuss the technology or study you plan on using the grant for. This gives you an idea of what the institute is interested in and willing to fund, as well as guidance on how to develop your application.

9. Government Small Business Grants

Possibly the most widely available grants are provided by the U.S. government. However, these are typically industry-specific, meaning that you’ll need to look into what’s available for your business type. The SBA offers a convenient area on their website to  conduct research  about which may be right for you.

• Fintech funding options

Financial technology (fintech) lenders are institutions that provide loans or lines of credit as an alternative to traditional bank or government loans. More and more of these funding options are becoming available, and typically provide similar loan amounts and lending terms. 

That being said, you’ll want to check out a lenders track record, services, application requirements, and customer support, as well as loan terms, to find the best option. Here are just a few of the platforms currently available.

10. Kabbage 

If you run an eCommerce business through the likes of eBay or Amazon,  Kabbage  is a great option for you. Overlooking the traditional collateral and credit score criteria associated with most loans, Kabbage is more concerned with your status as an online seller. You still need well-documented accounting data and  cash flow statements , but the rest is determined by customer feedback, selling history, turnover, and other digital metrics. 

So as long as you have a solid history of selling online and have your financial documentation in order, you can easily be approved for unsecured cash advancements in just a few minutes.

11. OnDeck 

Similar to Kabbage,  OnDeck  awards loans based on alternative metrics regarding the health of your business. In this case, they look at the annual revenue of your business to determine eligibility and help tailor the loan and payments around your needs. They also give you the opportunity to apply for either a loan or a line of credit depending on your circumstances, meaning that you can potentially stick with one lender for your funding needs. 

12. PayPal 

PayPal  offers both working capital and traditional business loans and will lend based on an existing business’s earnings on its site. The primary limitation of this service is that you need to currently make sales using PayPal and/or operate using a PayPal Business account in order to apply. But if you already utilize PayPal, funding through them is incredibly fast, requires no collateral, and doesn’t penalize you for a low credit score.

One drawback is that a loan through PayPal does not build your business credit, meaning that you won’t be helping your chances of getting a different business loan later on. But if you want to stay within the PayPal ecosystem, it will improve your chances of getting more funding through additional PayPal loans.

Instead of serving as a direct lender,  Lendio  instead acts as a financing aggregate platform. Working with a network of over 300 lenders, including Kabbage and OnDeck, they match users with the best option for their needs. So rather than reviewing every single fintech organization and filling out different applications, you can simply review hundreds at once and apply with a simple form.

The only drawback of using a middleman like Lendio is that your funds will likely take longer to get to you. But if you’re looking for long-term funding that also provides excellent customer service, Lendio is worth checking out.

• Crowdfunding sites

On crowdfunding websites, you create promotional materials and set up a page for your business or project to accept financial backing from those who visit the site. Each site varies a little, so be sure to  read the fine print  as you decide which is right for you.

14. Indiegogo

Another option for crowdfunding is  Indiegogo . Similar to other crowdfunding sites, you create a profile, tell your story, set a fundraising goal, and ask for donations. However, Indiegogo’s fee structure is a little different—it’s not an all-or-nothing scenario. Indiegogo takes nine percent of your earnings if you don’t reach your goal, and four percent of your earnings if you do reach it. Here’s the  fee structure.  

15. Kickstarter 

Kickstarter  is the most popular crowdfunding site out there; since its inception in 2009, the site has raised $1.7 billion dollars, which funded 85,000 projects.

Like most crowdfunding sites, business owners create a profile page that outlines the business and sets a fundraising goal. Those who donate are promised some sort of reward, like being the first to try out the new product.

However, it’s an  all-or-nothing scenario on Kickstarter.  In other words, you have to hit your fundraising goal to keep the money. If you fall short, your donors get their money back. Even if you do reach your goal, Kickstarter takes five percent as a fee. Learn more about  Kickstarter’s guidelines here.

Kickstarter has the name recognition, but it also has a lot of campaigns. Everything from art projects to business ventures are actively competing for funding, so you’ll want to evaluate the site to make sure it’s the right fit for your business.

Causes  has been designed specifically to fund social, political, and cultural initiatives, making it perfect for nonprofit businesses. It’s entirely free to join and also acts as somewhat of a social platform for like-minded people looking to improve the world at large. That means this platform isn’t just useful for acquiring funding but is a great way to connect with donors, partners, and potentially even future employees. 

17. Patreon

If you operate a digital media business such as a podcast, web series, or blog, a monthly subscription-based model may be more appropriate for you. And luckily,  Patreon  was designed as a crowdfunding platform specifically for digital creators. Instead of a single upfront investment or financing round, Patreon lets you establish specific tiers at different price-points for your followers to subscribe to. 

You can offer exclusive content, merch, access, and other items that grow in cost or quality, basically allowing you to conduct user testing continuously. It’s a great platform to build and directly connect with your audience while still operating across other social channels outside your Patreon. 

Just make sure you keep to a schedule or your subscribers may end up finding somewhere else to spend their money.

18. Fundable

Think of  Fundable  as a cross between Kickstarter and traditional venture capital funding. Instead of just posting a single product or service, you promote your entire business on the site, geared toward attracting funding from venture capitalists and other accredited investors. You still post timeline updates and an overall funding goal, but you also need to showcase your overall business plan. 

It basically acts as an ongoing pitch, but with a bit of additional investment on your part. Unlike most crowdsourcing sites that typically take out a fee, Fundable charges a monthly payment to stay on the platform. Additionally, it acts as an all-or-nothing funding system, meaning that you need to reach your goal or lose it all.

• Peer-to-Peer Lending

It’s not always easy to  explain your business concept to a banker,  but explaining it to your peers is a whole different concept. A lot of startups chose to borrow money from their peers, but rather than asking your college buddy to cough up a few grand, try these websites instead.

19. Prosper

Prosper  is a well-known peer-to-peer lending site. It has the name recognition in the field, with $3 billion given out in loans.

With this resource, you’re given an interest rate based on an evaluation. You create a loan listing so investors can see what you’re all about and what you need the money for. Once an investor commits to funding your loan, you’ll get the cash and set up a payment plan. Rates start around seven percent but can go as high as 35 percent.

20. LendingClub

If you’ve been in business for a few years, but need some additional capital, check out  LendingClub . With LendingClub, loans are financed through investors. You need two years of business history, at least $75,000 in annual sales, and have a good personal credit score. There’s a five-year cap to pay back your loan, and as with any loan, you’ll face interest rates and additional fees.

21. Upstart

Upstart  is designed to help younger entrepreneurs get funding with little to no credit or financial history. It does so through an underwriting model, that utilizes AI and nontraditional data, to review and evaluate based on things like education level, job history, place of residence, etc. This means that their requirements are far less strict and that eligibility is based solely on forward momentum and potential.

While the loans themselves cap out at $50,000, using Upstart can be a great method to consolidate high-interest debt or fund expansions to your business. 

22. Funding Circle

Funding Circle  connects your small business with investors. Loans range from $25,000 to $500,000; you’ll speak with a loan manager who will walk you through the process, and you could get funding within two weeks.

Interest rates vary from six to 20 percent, depending on how quickly you pay back the loan. Plus, there are origination fees and late fees if you miss a payment. Check out the rates and fees before you apply.

23. Peerform

Peerform  is designed to be beneficial for both investors and small businesses. The online portfolio builder helps investors create unique and diversified portfolios specific to their financial goals and willingness to take on risks. For borrowers that have between a 600-700 credit score, it offers incredibly competitive rates, as low as six percent, on short-term loans up to $25,000. 

While not the strongest choice to fund a full-on business expansion or startup, it can be a great way for a relatively healthy business to pay off debt, make a large purchase, or cover operational costs for a time.

• Venture capital

If you have a strong initial interest in your business and a roadmap for long-term growth, you may want to pursue venture capital for funding. You can  utilize the SBA investment finder  to find potential investors or utilize one of the following platforms to pitch your business and connect with venture capitalists. 

24. FundersClub

FundersClub  was one of the earliest online venture capitalist crowdfunding platforms originally emerging from the YCombinator back in 2012. For businesses, you can either be solely funded by specific investors or be grouped in with similar businesses as a diversified fund to invest in. 

While it’s a great way to gain exposure to hundreds of accredited investors, actually getting on the platform itself is fairly difficult. They only accept around 2% of applicants and even recommend that your business be recommended by a founder before applying. But with a strong pitch and the willingness to make connections, it’s still a viable option for small businesses.

25. MicroVentures

MicroVentures  is the other original online venture capital platform with a long history of making funding available to early-stage startups. While they originally only offered traditional angel investment and venture capital options to accredited investors, they’ve adapted their platform to make specific investment opportunities available to anyone. This expansion is especially great for business owners pursuing funding as it simply means there are more people looking to invest.

Now, this open nature does have its drawbacks as there are simply so many businesses seeking investment on the site. This can make it easy to get lost in the shuffle if you don’t have a solid pitch or way to standout. But as far as an additional way to potentially seek out investors, MicroVentures is worth exploring even if it’s simply expanding your options.

• Angel investment

An  angel investor  is typically an individual or group that have spare cash available and are willing to provide capital for a start-up or expansion. The primary benefit of  having an angel investor fund your business  is that it is far less risky than a loan or venture capital as you typically don’t have to repay. Instead, an angel is looking for some sort of share in your business and is willing to look further ahead on seeing any sort of return. 

So if you’re willing to relinquish some control and want to seek investment from an angel investor, here are some great options to do so.

26. Gust 

Gust  operates as both an investment matching network and a tool to make your business more attractive to investors. No matter the stage of your startup, Gust helps you organize specific documentation, set benchmarks, identify gaps in your team, and a number of other methods to grow and improve your business. All with the intent of designing it to be an easy yes for angel investors.

27. CircleUp

If you own and operate a company focused on retail and consumer products,  CircleUp  is the perfect platform for you to seek funding. Utilizing their proprietary Helio machine learning platform, CircleUp seeks to provide funding to as many early-stage entrepreneurs as possible. 

Taking publicly available, partner, and private data (provided by entrepreneurs), it aggregates the information into a digestible scenario that represents the potential for a business. It even helps CircleUp identify business opportunities around an emerging trend, which can be useful for business owners that may not be aware of how to leverage it.

Offering both credit and equity financing, CircleUp is a diverse option that’s great for those seeking angel investment that also provides insight they can leverage to improve their business.

28. Angel Capital Association

Think of the  Angel Capital Association  (ACA) as the hub for a network of angel investment organizations across North America. Less of a virtual platform and more of an opportunity to connect with and build relationships with over 18,000 angel investors, the ACA was designed and currently operates by bringing in angel groups over individual investors. 

While it may be more traditional in nature, it’s still a great method for researching and learning from investors across various industries. It can be a great tool for growing your business even if you don’t end up seeking out funding in the end.

Microloans are simply just smaller business loans. In many ways, these smaller funding options kicked off the explosion of fintech organizations who eventually grew to offer traditional loans as well as microloans. While there are typically specific limitations in regards to how much you can get, a microloan may be a great option if you need a bit of capital to fund specific operational costs, expansions, or projects. 

Accion  operates as a global nonprofit with the primary goal of helping small businesses secure worthwhile funding partnerships. Aside from loans, they also provide advisory services and continuously lead the charge as thought leaders for financial inclusion.

Additionally, they offer funding opportunities focused on growing organizations that work to accelerate global financial inclusion. While it’s less of a traditional microlender, it does ensure that any investment or partnerships follow a specific methodology and goal. If that matches up with your organizations’ mission, Accion may be a great option for you.

30. LiftFund

LiftFund  runs the gambit in regards to loans. Not only do they offer microloans, but traditional and SBA options as well. This makes the range in loan amounts extremely vast, with the lowest option being just $500 and the maximum being up to one million. It acts as a great option for businesses that are either extremely new or don’t make enough monthly revenue to pursue traditional loan options. 

The only drawback is that LiftFund operates similarly to local SBA or credit union locations. This simply means that if they don’t operate in your area you’ll be out of luck and need to find a different option.

Kiva  is a great example of an online portal for microloans. The application is simple and the terms are great, with US small businesses being able to take out loans of up to $15,000 at a 0% interest rate. You can invite friends and family to help fund you and then set up a 30-day fundraiser to attract funding from the Kiva lending community. 

Once you receive funding, you then have up to 3-years to repay. But you can utilize Kiva as a marketing platform to help build your customer base and accelerate your road to repayment.

32. Opportunity Fund

The  Opportunity Fund  operates strictly as a microloan provider for small businesses owned by low-and-moderate-income immigrants, people of color, and women. Their goal as an organization is to promote growth in low-income communities by helping entrepreneurs that traditionally have difficulty acquiring funding. If you fall within any of these categories and have had difficulty acquiring a bank loan or even alternative funding, a microloan from the Opportunity Fund may be a better option.

• Pitch Competitions

Looking for a fun way to get your hands on some business capital? Enter a contest. There are several contests that happen throughout the year. If you miss the deadline this year, bookmark the site for a shot next year.

33. Hatch Pitch

If you’re creating a product or service based on innovative technology, you can pitch your idea during Hatch Pitch, an event that takes place each year at the South by Southwest (SXSW) event. You have four minutes to pitch your startup to judges. Learn more about how it works on the  Hatch Pitch site.

34. TechCrunch Disrupt

Traditionally an in-person event,  Disrupt  is going all digital this year. Sponsored by TechCrunch, this event is all about hearing from tech founders and networking to build your business. You’ll have opportunities to interact with individuals from similar industries, pitch your business to investors and founders, and gain insight from the best and the brightest from Silicon Valley.

While not necessarily a traditional pitch competition, this event provides a great opportunity for emerging businesses to make their mark and connect with founders. 

35. WebSummit PITCH

PITCH  provides an opportunity for startups that have received less than $3 million in funding to battle it out and pitch their businesses. The only criteria to actually apply for the competition is that you must be part of the WebSummit Startup Program before applying, which you can apply to  here . The primary benefit of being one of the 135 startups to participate is that even if you aren’t the winner, you get a ton of exposure to lenders and investors.

It also ensures that you’ve refined your pitch and get an incredible amount of practice presenting it in front of investors. There are some hoops to jump through to get involved, but it’s well worth the effort if you’re an early-stage startup.

• Bootstrapping methods

Bootstrapping: the time-honored tradition of doing basically any and everything you can think of to find money to use in your business. While any of the other funding options on this list are viable, you’ll likely find yourself doing some variation of bootstrapping to prepare your business. Here’s what you should be considering.

36. Friends and family

This is a tried and true method—the people in your life often believe in you and will put their money where their mouth is. Here are some suggestions on navigating  fundraising from friends and family. 

37. Business line of credit

This is an option for those who need cash quickly and have fairly good credit.  Check out this article  for more information.

38. Service or product presales

I have a friend who helped pay for massage school by pre-selling massages—she simply offered her massage services for  after  she would become an LMT (licensed massage therapist), in exchange for a contribution to her tuition. Once she graduated and got her licensure, those who contributed had a “pre-paid” massage waiting for them, which they could schedule at their convenience.

39. Using your savings/selling assets

Although this is also known as “betting the farm” and can certainly be risky, it is an option to use your personal savings and/or sell one of your existing assets and use that money to fund your business.

40. Using other income to fuel your business

As we’ve written about on Bplans previously, many people have  a side hustle  until they are able to go full time in the direction of their own business. Renting a room in your house using a popular site like  Airbnb  is a great example.

Angelique is a skilled writer, editor, and social media specialist, as well as an actor and model with a demonstrated history of theater, film, commercial and print work.

Table of Contents

• Determine how much funding you’ll need

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Security guard business idea: आजकल लोग अपनी सुरक्षा पर खास तौर से ध्यान देते हैं। यह एक ऐसा मामला है, जिसमें कोई ढिलाई बरतने के मूड में नहीं रहता है। लिहाजा पर्सनल हो या ऑफिस, मॉल, हर जगह सिक्योरिटी गार्ड की जरूरत पड़ती है। इसके लिए लोग मोलभाव भी नहीं करते हैं। ऐसे में आप जॉब भी देंगे और मालामाल भी हो जाएंगे.

अगर आप किसी नए बिजनेस की तलाश में हैं तो आपकी यह तालश आज हम पूरी कर रहे हैं। हम आपको एक ऐसा आइडिया दे रहे हैं। जहां जॉब पाने वालों की लाइन लग जाएगी और आप मालामाल हो जाएंगे। दरअसल हम बात कर रहे हैं सिक्योरिटी एजेंसी (Security Agency) की। इस एजेंसी को खोलकर आप नौकरी देने वाले भी बन सकते हैं। इसके लिए आपको सिर्फ एक कमरे की जरूरत है। यानी आप बेहद कम खर्च में इस बिजनेस में हाथ आजमा सकते हैं। बड़ी से बड़ी कंपनी हो या छोटे-छोटे काम करने वाले सर्विस सेक्टर के दफ्तर, हर किसी को सुरक्षा के लिए सिक्योरिटी गार्ड्स की जरूरत पड़ती है।

सिक्योरिटी गार्ड की डिमांड दिनों दिन बढ़ती जा रही है। इस बिजनेस में मंदी आने के चांस बेहद कम है। सुरक्षा की जरूरत सबको पड़ती है। कोई धनवान हो या बड़ा कारोबारी वो अपनी सुरक्षा के लिए हमेशा भरोसेमंद सिक्योरिटी एजेंसी की तलाश में रहता है।

सिक्योरिटी एजेंसी का बिजनेस कैसे करें शुरू?

लोग अन्य खर्चों में भले ही कटौती कर लें। लेकिन सुरक्षा के आगे पैसों की कटौती भी बहुत कम करते हैं। इसमें आपको मनचाहा पैसा कमाने का मौका मिल सकता है। छोटा या बड़ा निवेश दोनों में फायदा हो सकता है। इसे शुरू करने के लिए आपको कंपनी बनानी होगी। इसके बाद ईएसआईसी और पीएफ रजिस्ट्रेशन भी कराना होगा। वहीं GST रजिस्ट्रेशन कराना होगा। इसके साथ ही कंपनी को लेबर कोर्ट में भी रजिस्टर्ड कराना जरूरी होता है। यह एक ऐसा बिजनेस है, जिसे आप पैसों और स्पेस की चिंता किए बगैर शुरू कर सकते हैं। आप इसे पार्टनरशिप में भी खोल सकते हैं।

कहां से मिलेगा लाइसेंस?

सिक्योरिटी एजेंसी खोलने के लिए लाइसेंस Private Security Agency Regulation Act 2005 के तहत जारी होता है। इसे PSARA कहते हैं। इस लाइसेंस के बगैर प्राइवेट सिक्योरिटी एजेंसी नहीं चलाई जा सकती है। इसके लिए लाइसेंस देने से पहले आवेदक का पुलिस वेरिफिकेशन कराया जाता है। वहीं एजेंसी खोलने के लिए स्टेट कंट्रोलिंग अथॉरिटी द्वारा प्रमाणित संस्थान से सिक्योरिटी गार्ड्स की ट्रेनिंग को लेकर एक करार करना होता है।

कितनी लगेगी फीस?

सिक्योरिटी एजेंसी चलाने के लिए लाइसेंस फीस (License Fees) भी भरनी होती है। एक जिले में सिक्योरिटी एजेंसी के लिए लाइसेंस लेना हो तो करीब 5000 रुपये, 5 जिलों में सर्विस मुहैया कराने के लिए करीब 10,000 रुपये और एक राज्य में अपनी एजेंसी चलाने के लिए 25,000 रुपये तक फीस लगती है। लाइसेंस मिलने के बाद आपकी एजेंसी को पसारा एक्ट के सभी नियमों का पालना करना होता है। इस तरह आप धीरे-धीरे अपने बिजनेस को बढ़ा सकते हैं।

मनचाहा पैसा

लोग सिक्योरिटी के मामले में कंजूसी कम ही करते हैं। यानी आपको इस बिजनेस के जरिए मनचाहा पैसा कमाने का मौका मिल सकता है। जिस तेजी से शहरों में आबादी बढ़ रही है। नए कारोबार और इंडस्ट्री शुरू हो रही हैं। ऐसे में सिक्योरिटी गार्ड की डिमांड भी तेज हो गई है। इस डिमांड को आप अपनी खुद की सिक्योरिटी एजेंसी खोलकर पूरा कर सकते हैं।

Business Idea: सैलून का बिजनेस कर देगा मालामाल, सरकारी मदद से ऐसे करें शुरू

MoneyControl News

Tags: # business idea

First Published: Sep 01, 2024 6:52 AM

हिंदी में  शेयर बाजार ,  स्टॉक मार्केट न्यूज़ ,   बिजनेस न्यूज़ ,   पर्सनल फाइनेंस और अन्य  देश से जुड़ी खबरें सबसे पहले मनीकंट्रोल हिंदी पर पढ़ें. डेली मार्केट अपडेट के लिए  Moneycontrol App   डाउनलोड करें।

Money blog: Iconic Trio chocolate bar could return, hints McVitie's

The Money blog is your place for consumer and personal finance news and tips. Today's posts include NatWest launching the cheapest mortgage on the market, an old Liam Gallagher tweet about ticket pricing and our latest Bring It Back feature - as McVitie's tells us Trio could return.

Tuesday 3 September 2024 14:45, UK

• How your pension could be taxed further as chancellor refuses to rule out hikes
• High-street bank trumps rivals with cheapest five-year mortgage
• Iconic chocolate bar could return, hints McVitie's
• Pay-per-mile tax scheme proposed for electric vehicles

Essential reads

• Basically... Free school meals
• 'This job has saved lives': What's it like selling the Big Issue?
• Best of the Money blog

Tips and advice

• Cheapest holidays dates before Christmas
• Money Problem : 'My dog died but insurance still wants whole year's payment'
• How else to eat Greggs on cheap as O2 Priority scraps freebies

Ask a question or make a comment

Chancellor Rachel Reeves has refused to rule out heavier taxation on pensions in the October budget. 

"I'm not going to speculate on what will be in the budget, but I'm absolutely determined to ensure that working people are better off," she told MPs in the House of Commons. 

"This budget will be a budget to fix the foundations of the economy after the mess left by the previous government."

How could your pension be taxed further? Let's have a look at some of the possibilities...

Leading left-wing thinktank The Fabian Society said the government could raise at least £10bn a year by reducing pension tax relief for high earners. 

At the moment, pension tax relief depends on an individual's tax band. 

But Ms Reeves could create a single flat rate of tax relief for all tax bands, the society said.

"First, the rate of income tax relief should be equalised for people on all tax bands - for example at 30% of gross earnings, midway between the 20p and 40p rates of tax," the thinktank said in a report. 

Ms Reeves could also reduce the maximum tax-free lump sum  you can get on retirement from £268,275 to £100,000 or 25% of pension wealth. 

"The Institute for Fiscal Studies estimates that this might eventually save over £2bn per year, which would be targeted entirely at people with high lifetime earnings or assets," the report added. 

Another suggestion was to charge national insurance on private pension incomes . 

The organisation said it would lead to today's affluent pensioners making a higher tax contribution.

Other possibilities could be to levy income tax on all inherited pensions. 

It said pension pots could also be liable to inheritance tax in the same way as other assets. 

What else did the chancellor say today?

Away from refusing to rule out pension tax changes, Ms Reeves also confirmed a cap on corporation tax.

Speaking during Treasury questions, she said the tax would be capped at its current level of 25% to "give business the confidence to grow". 

Corporation tax applies to the annual profits of UK resident companies and branches of overseas companies.

The 25% main rate is payable by companies with taxable profits above £250,000.

A small profits rate applies for companies with profits of £50,000 or below, meaning they will pay 19%.

Up until April 2023, the previous corporation tax main rate was 19%.

After the revival of popular Cadbury's chocolate bar Top Deck earlier this year, we asked you which discontinued treat you would like to see brought back - and we got so many responses that we've decided to make a weekly feature of it called  Bring It Back . 

Every Tuesday, we'll pick one from our comments box and look at why it was so beloved and, crucially, find out whether the companies in question might consider reintroducing them.

This week we're looking at a chocolate bar that became a staple of lunch boxes in the 1980s and '90s - and spawned a TV advert that is among the most fondly remembered of the era: McVitie's Trio.

Sold in multipacks of six, each bar included three segments made up of a caramel layer over biscuit, all covered with milk chocolate.

The product became synonymous with a memorable commercial that featured an animation by artist Bob Godfrey and a play on the traditional Jamaican folk song "Day-O (The Banana Boat Song)".

Its lyrics, which will be familiar to almost anyone who grew up in the 1980s, included the bar's tagline: "I want a Trio and I want one now."

Having discontinued the product in 2003, it briefly returned to shop shelves in 2016 following a Facebook campaign, before vanishing from sale again shortly after.

Hordes of Sky News readers have called for the chocolate bar's revival.

Kellie said: "I'd love to have Trios back! They were yummy. McVitie's really need to start selling them again."

Derek told us: "What a chocolate bar the Trio was! I could eat an entire multipack in one sitting now if given the chance. And that old advert... instantly transported back to childhood just thinking about it."

Samantha said: "I can hear the jingle in my head now! Trios were just delicious chocolate bars... and we want one now!"

When asked by Sky News, a McVitie's spokesperson conspicuously declined to rule out a return for the iconic chocolate treat, saying the company was "constantly listening to what audiences want".

"This helps us to keep innovating and adapting to changing tastes, meaning more biscuits and snacks you love for generations to come," they said.

"For those who miss the caramel taste of Trio, one of our newest and most exciting innovations, McVitie's Gold Billions Wafer, will be your new favourite for on-the-go chocolate moments."

And, tantalisingly for fans of the bar, they added: "Watch this space for more to come..."

Along with the legions of Trio diehards, the Money blog will certainly be doing that - and hope to bring you news of further developments in the crusade in the near future.

Got a craving for any of the products below? Click the links to find out if they've got any chance at making a comeback... 

NatWest has launched the cheapest five-year fixed mortgage deal on the market. 

The 3.71% rate comes with a £1,495 product fee and is available to customers who have a 40% deposit. 

Other lenders have also announced cuts this week, including Barclays and Halifax. 

Yesterday, Barclays reduced its five-year fixed 60% LTV remortgage deal from 4.06% to 3.93%. 

It also announced cuts across its purchase product range, with a five-year fixed 75% LTV deal coming with a 3.95% rate and a £899 product fee. 

Halifax also launched a 3.81% five-year deal to new borrowers yesterday. 

Brokers have welcomed the cuts as "hugely positive" news, and suggested more lenders could follow suit. 

"NatWest's latest rate cut is another clear signal that mortgage lenders are pulling out all the stops to reignite the housing market," Ranald Mitchell, director of Charwin Mortgages, told Newspage.

"This flurry of rate reductions is a positive step towards finding that sweet spot where consumer confidence rebounds, and the property market gets back on track. 

"It's an exciting time for potential buyers, affordability is improving, and the window of opportunity is wide open." 

Justin Moy, the managing director at EHF Mortgages, said: "Lenders are looking to grab some market share by the end of the year.

"Other lenders will likely want to make a similar move over the coming days to remain competitive." 

By James Sillars , business reporter

It's a fairly muted start to the day's trading, again, on financial markets.

The FTSE 100 has opened 10 points higher at 8,373.

Rolls-Royce, the civil aerospace-to-defence firm (not to be confused with the luxury motor car manufacturer), is leading the gainers.

Its shares rallied by 4% early this morning after a 6.5% decline the previous day.

That tumbled was in reaction to the apparent mid-air failure of one of its engines on a Cathay Pacific flight .

Analysts said that the share price recovery was down to an update from  the airline that the fleet affected should be back to full operation by the weekend.

A tweet Liam Gallagher wrote seven years ago criticising the eye-watering price of gig tickets has come back to haunt him.

His message, written in September 2017 about his older brother Noel, who was touring America with his band High Flying Birds at the time, read: "350 dollars to go and see rkid in USA what a c*** when will it all stop as you were LG x"

The tweet has resurfaced after dynamic pricing for Oasis's much-hyped reunion next year left fans - many of whom had spent hours queueing online - stunned after some standard tickets more than doubled in price from £148 to £355 on Ticketmaster due to demand.

X users pointed out the irony upon seeing the 2017 tweet, posting comments including, "Well this is evergreen", "What's your excuse for charging over 368 quid then?" and "Not ageing well, Liam".

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Using a phrase Liam adopts in his own social media comments, another fan wrote simply "BIBLICAL".

Hundreds of people have complained to the Advertising Standards Authority (ASA) over "misleading claims about availability and pricing".

In response, Sir Keir Starmer has said the government will get a "grip" on the issue of surge pricing, with Culture Secretary Lisa Nandy promising a consultation over the transparency and use of dynamic pricing, and the technology around queuing systems, to ensure fans don't get ripped off.

Yesterday we revealed that official reseller Twickets had lowered its fees after criticism from Oasis fans.

Scroll through today's Money blog for: Cheapest dates to go on holiday this year (6.42 post); how do you get free school meals (7.58 post); pay-per-mile tax proposed (7.38 post)

Basically, free school meals are aimed at making sure the country's more vulnerable youngsters don't go hungry while they're learning in their earlier years.

Children of certain ages automatically qualify without having to apply, but the rules differ across the four nations.

Children whose parents claim certain benefits or asylum support may also be eligible - though an application may be needed.

Free school meals without having to apply

In England, outside of London , all state school children in reception to year two automatically qualify for infant free school meals, while in the capital , all state primary school children up to age 11 qualify for the benefit in the 2024-25 academic year.

In Scotland , all state school children up to primary five (around four to nine years old) get the meals automatically. There are plans for this to be extended to pupils in receipt of the Scottish child payment in primary six and seven from February.

In Wales  all primary school children in state schools can get free meals from September.

Families who claim benefits

If your child falls outside the eligibility criteria for automatic free school meals, they'll still be able to benefit in certain circumstances.

Wherever you are in the UK, your child may be able to get free school meals if you get one or more of the following:

• Income support
• Universal credit
• Income-based jobseeker's allowance
• Income-related employment and support allowance
• Support under part six of the Immigration and Asylum Act 1999
• The guaranteed element of pension credit
• Child tax credit
• Working tax credit (Scotland and Northern Ireland)
• Working tax credit run-on England and Wales) – paid for four weeks after you stop qualifying for working tax credit

There's some specific criteria for families by devolved nation, which we'll break down below...

England and Wales

If you're claiming universal credit, your net household income must be less than £7,400 after tax, and not including any benefits.

Those receiving child tax credit must not also be entitled to working tax credit and must have an annual income of less than £16,190.

If you're classed as having no recourse to public funds - a type of condition placed on temporary visas in the UK - and the parents are able to work, they must have a household income of no more than:

• £22,700 for families outside of London with one child
• £26,300 for families outside of London with two or more children
• £31,200 for families within London with one child
• £34,800 for families within London with two or more children

People claiming universal credit in Scotland must have a household monthly income of no more than £796 (£9,552 per year) to qualify for free school meals. 

Families on child tax credit, but not working tax credit, can get the meals if they earn less than £19,995. For those on both benefits, their income must be no more than £9,552.

Northern Ireland

You may be able to claim free school meals in Northern Ireland if you receive universal credit and your post-tax earnings are £15,000 or less per year.

If you get child tax credit or working tax credit, you can still get free school meals on an annual income of up to £16,190.

How can I claim the meals?

In England, Wales and Scotland, you apply to your local council.

The UK government website has a local authority postcode checker here , which directs you to the council running services in your area. There are similar tools on the Scottish and Welsh government websites.

In Northern Ireland, you can use this form to apply directly to the government.

How many children are eligible - and how much does it cost? 

According to the latest data from the Department for Education, 2.1 million pupils were eligible for free school meals in the 2023-24 academic year - 24.6% of pupils. This was a rise from 23.8% the year before.

According to the London mayor's office, it's estimated that school meals cost £13.25 per week - or £2.65 meal - on average.

It says its free school meals offer for all state-educated primary school children in the capital saves parents around £500 per year.

According to a 2023 report from the IFS, the current system of free school meals in England – both means-tested and universal provision – costs the government around £1.4bn a year.

But separate research from the Food Foundation found that expanding free school meal eligibility to all primary school students could generate around £41bn in direct benefits to students and a further £58bn to the wider economy over 20 years.

Read other entries in our Basically series.. .

Tax receipts from petrol and diesel duty bring in £25bn for the Treasury each year - and questions have been raised about what happens as more drivers go electric.

Today, the public transport charity Campaign for Better Transport (CBT) is proposing that drivers of zero-emission vehicles (ZEVs), such as electric cars, should be charged based on how far they travel.

They are asking Chancellor Rachel Reeves to impose the pay-per-mile scheme, saying it's the solution to a "black hole" that will be created by the loss of fuel duty.

The scheme would not apply to drivers of traditionally fuelled cars.

Under the plan, drivers with a ZEV before the implementation date would be exempt, incentivising the switch to electric vehicles.

Previous governments have found the prospect of introducing per-mile charges - known as road pricing - to be too politically toxic.

But CBT claims it would have public support.

Let us know your thoughts in the comments box - and read more on this story here ...

Summer may be edging towards the rear-view mirror, but that doesn't mean Britons are turning their back on sunshine. 

With many looking to sort an autumn holiday, Expedia has taken a look at the best times to fly and book hotels - with savings of up to £120 if you are savvy. 

Its data is based on average daily rates for lodging and flight prices between 22 September and 21 December this year.

When to book flights for

• Cheapest : 22, 23 or 24 September
• Least busy : 10 or 17 December
• Most expensive : 19, 20 or 21 December
• Busiest : 20 and 21 October

"For the best deals, travellers should look to book their flights 14 to 20 days before travel, saving them on average £120 compared to booking 91 days or more out, or saving £60 compared to booking 60-90 days out," Expedia says. 

"Target the 22-29 September for travel, when average ticket prices (ATPs) for flights are shaping up to be nearly £100 cheaper than the autumn average, and £50 cheaper than summer ATPs."

When to  book a hotel

• Cheapest : 20 November or 11 December
• Most expensive : 14 or 21 October
• Busiest : 23 October or 25 September

"For hotel stays, target the 3-9 November, when average daily rates are £15 cheaper per night than the seasonal average and summer stays," Expedia says. 

The holiday booking site says the most popular autumn destinations have remained largely the same as last year based on the largest number of hotel searches...

• New York, USA
• Paris, France
• Edinburgh, Scotland
• Amsterdam, Netherlands
• Manchester, UK
• Tenerife, Spain
• Birmingham, UK
• Rome, Italy

Despite this, Expedia says savvy Britons are searching out "under the radar" getaway spots.

"Flight searches have surged for Brits looking to discover new, under-the-radar European cities this autumn, such as Tirana (+95%) in Albania and Bucharest (+70%) in Romania, as Brits look to stretch their budgets further by looking outside the popular city break hotspots."

The top 10 destinations with the biggest search increases are:

• Saint Malo, France
• Didim, Turkey
• Syracuse, Italy
• Beijing, China 
• Palermo, Italy
• Tromso, Norway 
• Brescia, Italy 
• Poznan, Poland
• Tangier, Morocco
• Ischia, Italy

The Money blog will return shortly - meantime, why not scroll through some of our best and most popular features below...

Despite traditionally being an affordable staple of British cuisine, the average price for a portion of fish and chips has risen by more than 50% in the past five years to nearly £10, according to the Office for National Statistics.

Sonny and Shane "the codfather" Lee told Sky News of the challenges that owning J-Henry's Fish and Chip Shop brings and why prices have skyrocketed. 

"Potatoes, fish, utilities, cooking oil - so many things [are going up]," he said. 

Shane also said that he is used to one thing at a time increasing in price, but the outlook today sees multiple costs going up all at once.  

"Potatoes [were] priced right up to about £25 a bag - the previous year it was about £10 a bag," Sonny said, noting a bad harvest last year. 

He said the business had tried hake as a cheaper fish option, but that consumers continued to prefer the more traditional, but expensive, cod and haddock. 

"It's hard and we can we can absorb the cost to a certain extent, but some of it has to be passed on," Shane added. 

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