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The 8 Target Audiences for Your Business Plan It's not just investors or bankers who'll want to see your business plan. Find out exactly who may be looking it over.

By The Staff of Entrepreneur Media, Inc. • Jan 22, 2015

In their book Write Your Business Plan , the staff of Entrepreneur Media, Inc. offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors offer reasons why you may want to tailor your business plan to the audiences you're showing it to.

The potential readers of a business plan are a varied bunch, ranging from bankers and venture capitalists to employees. Although this is a diverse group, it is a finite one. And each type of reader does have certain typical interests. If you know these interests up front, you should be sure to take them into account when preparing a plan for that particular audience.

Let's take a look at eight typical audiences who'll be reading your business plan.

1. Active venture capitalists.

VCs see hundreds of plans in the course of a year. Most plans probably receive no more than a glance from a given venture capitalist before being rejected; others get just a cursory inspection. Even if your plan excites initial interest, it may receive only a few minutes of attention to begin with. It's essential, when courting these harried investors, that you make the right impression fast. Emphasize a cogent, succinct summary and explanation of the basic business concept, and don't stint on the details about the impressive backgrounds of your management team. That said, make it concise and to the point. Remember, time is of the essence to venture capitalists and other investors.

2. Bankers.

Bankers tend to be more formal than venture capitalists and more concerned with financial strength than with exciting concepts and impressive resumes. For these readers, you'll want to give extra attention to balance sheets and cash-flow statements. Make sure they're fully detailed and come with notes to explain any anomalies or possible points of confusion.

3. Angel investors.

Angel investors may not insist on seeing a plan at all, but your responsibilities as a businessperson require you to show them one anyway. For such an informal investor, prepare a less-formal plan. Rather than going for impressive bulk, seek brevity. An angel investor used to playing their hunches might be put off by an imposing plan rather than impressed with your thoroughness.

4. Potential partners.

If you were thinking about becoming a partner in a firm, you'd no doubt be very concerned with the responsibilities you'd have, the authority you'd carry and the ownership you'd receive in the enterprise. Naturally, anyone who's considering partnering with you is going to have similar concerns. So make sure that any plan presented to a potential partner deals comprehensively with the ownership structure and clearly spells out matters of control and accountability.

5. Customers.

Customers who are looking at your business plan are probably doing so because they're contemplating building a long-term relationship with you. They're certainly going to be more concerned about your relationships with your other customers and, possibly, suppliers than most of your readers. So deal with these sections of your plan in greater depth; you can be more concise in other areas. Customers rarely ever read a company's business plan, so you should probably have your miniplan available for these occasions.

6. Suppliers.

Suppliers have a lot of the same concerns as customers, except they're in the other direction on the supply chain. They'll want, above all, to make sure you can pay your bills, so be sure to include adequate cash flow forecasts and other financial reports. Suppliers, who naturally would like their customers to order more and more, are likely to be quite interested in your growth prospects. In fact, if you can show you're probably going to be growing a lot, you may be in a better position to negotiate terms with your suppliers. Like customers, most suppliers don't take the time to read lengthy business plans, so again, focus on the shorter version for such purposes.

7. Strategic allies.

Strategic allies usually come to you for something specific—technology, distribution, complementary customer sets, etc. So any plan you show to a potential ally will stress this aspect of your operation. Sometimes potential strategic partners may also be potential competitors, so you may want to present your plan in stages, saving sensitive information such as financials and marketing strategies for later in the process when trust has been established.

8. Managers.

Managers in your company are using the plan primarily to remind themselves of objectives, to keep strategies clear and to monitor company performance and market conditions. You'll want to stress such things as corporate mission and vision statements and analyses of current industry and economic factors. The most important part of a plan intended for management consumption is probably in the financials. You'll want to take special care to make it easy for managers to compare sales revenue, profitability and other key financial measures against planned performance.

There's one caution to the plan-customization exercise. Limit your alterations from one plan to another to modifying the emphasis of the information you present. Don't show one set of numbers to a banker you're trying to borrow money from and another to a partner you're trying to lure on board. It's one thing to stress one aspect of your operation over another for presentation purposes and entirely another to distort the truth.

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Business planning

Purposes of business plans.

In simple terms, a business plan is a guide that details what the business wants to achieve and how it is going to do this [1] . Business plans are developed for both internal and external purposes. Internally, entrepreneurs develop business plans to help put the pieces of their business together. The most common external purpose for a business plan is to raise capital.

Internal Purposes

The business plan is the road map for the development of the business because it:

• Defines the vision for the company
• Establishes the company’s strategy
• Describes how the strategy will be implemented
• Provides a framework for analysis of key issues
• Provides a plan for the development of the business
• Is a measurement and control tool
• Helps the entrepreneur to be realistic and to put theories to the test

External Purposes

The business plan is often the main method of describing a company to external audiences, such as potential sources for financing, and key personnel being recruited. It should assist outside parties to understand the current status of the company, its opportunities, and its needs for resources such as capital and personnel. It also provides the most complete source of information for valuation of the business. [2]

In the list above, one purpose is to ‘help the entrepreneur to be realistic and to put theories to the test’.

• Why do you think it is sometimes difficult for an entrepreneur to be realistic about putting their business idea into action?
• How do you think writing a business plan would help with this?

Post your thoughts in the discussion forum and comment on what others have said as appropriate.

• ↑ http://articles.bplans.com/what-is-a-business-plan/
• ↑ Reproduced from Chapter 5 – Business Planning, in Entrepreneurship and Innovation Toolkit, Lee A. Swanson, University of Saskatchewan, 2017, shared under Creative Commons Attribution-ShareAlike 4.0 International License

Do you REALLY need a business plan?

The top three questions that I get asked most frequently as a professional business plan writer will probably not surprise you:

• What is the purpose of a business plan – why is it really required?
• How is it going to benefit my business if I write a business plan?
• Is a business plan really that important – how can I actually use it?

Keep reading to get my take on what the most essential advantages of preparing a business plan are—and why you may (not) need to prepare one.

The importance, purpose and benefit of a business plan is in that it enables you to validate a business idea, secure funding, set strategic goals – and then take organized action on those goals by making decisions, managing resources, risk and change, while effectively communicating with stakeholders.

Let’s take a closer look at how each of the important business planning benefits can catapult your business forward:

1. Validate Your Business Idea

The process of writing your business plan will force you to ask the difficult questions about the major components of your business, including:

• External: industry, target market of prospective customers, competitive landscape
• Internal: business model, unique selling proposition, operations, marketing, finance

Business planning connects the dots to draw a big picture of the entire business.

And imagine how much time and money you would save if working through a business plan revealed that your business idea is untenable. You would be surprised how often that happens – an idea that once sounded so very promising may easily fall apart after you actually write down all the facts, details and numbers.

While you may be tempted to jump directly into start-up mode, writing a business plan is an essential first step to check the feasibility of a business before investing too much time and money into it. Business plans help to confirm that the idea you are so passionate and convinced about is solid from business point of view.

Take the time to do the necessary research and work through a proper business plan. The more you know, the higher the likelihood that your business will succeed.

2. Set and Track Goals

Successful businesses are dynamic and continuously evolve. And so are good business plans that allow you to:

• Priorities: Regularly set goals, targets (e.g., sales revenues reached), milestones (e.g. number of employees hired), performance indicators and metrics for short, mid and long term
• Accountability: Track your progress toward goals and benchmarks
• Course-correction: make changes to your business as you learn more about your market and what works and what does not
• Mission: Refer to a clear set of values to help steer your business through any times of trouble

Essentially, business plan is a blueprint and an important strategic tool that keeps you focused, motivated and accountable to keep your business on track. When used properly and consulted regularly, it can help you measure and manage what you are working so hard to create – your long-term vision.

As humans, we work better when we have clear goals we can work towards. The everyday business hustle makes it challenging to keep an eye on the strategic priorities. The business planning process serves as a useful reminder.

3. Take Action

A business plan is also a plan of action . At its core, your plan identifies where you are now, where you want your business to go, and how you will get there.

Planning out exactly how you are going to turn your vision into a successful business is perhaps the most important step between an idea and reality. Success comes not only from having a vision but working towards that vision in a systematic and organized way.

A good business plan clearly outlines specific steps necessary to turn the business objectives into reality. Think of it as a roadmap to success. The strategy and tactics need to be in alignment to make sure that your day-to-day activities lead to the achievement of your business goals.

4. Manage Resources

A business plan also provides insight on how resources required for achieving your business goals will be structured and allocated according to their strategic priority. For example:

Large Spending Decisions

• Assets: When and in what amount will the business commit resources to buy/lease new assets, such as computers or vehicles.
• Human Resources: Objectives for hiring new employees, including not only their pay but how they will help the business grow and flourish.
• Business Space: Information on costs of renting/buying space for offices, retail, manufacturing or other operations, for example when expanding to a new location.

Cash Flow It is essential that a business carefully plans and manages cash flows to ensure that there are optimal levels of cash in the bank at all times and avoid situations where the business could run out of cash and could not afford to pay its bills.

Revenues v. Expenses In addition, your business plan will compare your revenue forecasts to the budgeted costs to make sure that your financials are healthy and the business is set up for success.

5. Make Decisions

Whether you are starting a small business or expanding an existing one, a business plan is an important tool to help guide your decisions:

Sound decisions Gathering information for the business plan boosts your knowledge across many important areas of the business:

• Industry, market, customers and competitors
• Financial projections (e.g., revenue, expenses, assets, cash flow)
• Operations, technology and logistics
• Human resources (management and staff)
• Creating value for your customer through products and services

Decision-making skills The business planning process involves thorough research and critical thinking about many intertwined and complex business issues. As a result, it solidifies the decision-making skills of the business owner and builds a solid foundation for strategic planning , prioritization and sound decision making in your business. The more you understand, the better your decisions will be.

Planning Thorough planning allows you to determine the answer to some of the most critical business decisions ahead of time , prepare for anticipate problems before they arise, and ensure that any tactical solutions are in line with the overall strategy and goals.

If you do not take time to plan, you risk becoming overwhelmed by countless options and conflicting directions because you are not unclear about the mission , vision and strategy for your business.

6. Manage Risk

Some level of uncertainty is inherent in every business, but there is a lot you can do to reduce and manage the risk, starting with a business plan to uncover your weak spots.

You will need to take a realistic and pragmatic look at the hard facts and identify:

• Major risks , challenges and obstacles that you can expect on the way – so you can prepare to deal with them.
• Weaknesses in your business idea, business model and strategy – so you can fix them.
• Critical mistakes before they arise – so you can avoid them.

Essentially, the business plan is your safety net . Naturally, business plan cannot entirely eliminate risk, but it can significantly reduce it and prepare you for any challenges you may encounter.

7. Communicate Internally

Attract talent For a business to succeed, attracting talented workers and partners is of vital importance.

A business plan can be used as a communication tool to attract the right talent at all levels, from skilled staff to executive management, to work for your business by explaining the direction and growth potential of the business in a presentable format.

Align performance Sharing your business plan with all team members helps to ensure that everyone is on the same page when it comes to the long-term vision and strategy.

You need their buy-in from the beginning, because aligning your team with your priorities will increase the efficiency of your business as everyone is working towards a common goal .

If everyone on your team understands that their piece of work matters and how it fits into the big picture, they are more invested in achieving the objectives of the business.

It also makes it easier to track and communicate on your progress.

Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.

8. Communicate Externally

Alliances If you are interested in partnerships or joint ventures, you may share selected sections of your plan with the potential business partners in order to develop new alliances.

Suppliers A business plan can play a part in attracting reliable suppliers and getting approved for business credit from suppliers. Suppliers who feel confident that your business will succeed (e.g., sales projections) will be much more likely to extend credit.

In addition, suppliers may want to ensure their products are being represented in the right way .

Professional Services Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, including attorneys, accountants, and other professional consultants as needed, to make sure that everyone is on the same page.

Advisors Share the plan with experts and professionals who are in a position to give you valuable advice.

Landlord Some landlords and property managers require businesses to submit a business plan to be considered for a lease to prove that your business will have sufficient cash flows to pay the rent.

Customers The business plan may also function as a prospectus for potential customers, especially when it comes to large corporate accounts and exclusive customer relationships.

9. Secure Funding

If you intend to seek outside financing for your business, you are likely going to need a business plan.

Whether you are seeking debt financing (e.g. loan or credit line) from a lender (e.g., bank or financial institution) or equity capital financing from investors (e.g., venture or angel capital), a business plan can make the difference between whether or not – and how much – someone decides to invest.

Investors and financiers are always looking at the risk of default and the earning potential based on facts and figures. Understandably, anyone who is interested in supporting your business will want to check that you know what you are doing, that their money is in good hands, and that the venture is viable in the long run.

Business plans tend to be the most effective ways of proving that. A presentation may pique their interest , but they will most probably request a well-written document they can study in detail before they will be prepared to make any financial commitment.

That is why a business plan can often be the single most important document you can present to potential investors/financiers that will provide the structure and confidence that they need to make decisions about funding and supporting your company.

Be prepared to have your business plan scrutinized . Investors and financiers will conduct extensive checks and analyses to be certain that what is written in your business plan faithful representation of the truth.

10. Grow and Change

It is a very common misconception that a business plan is a static document that a new business prepares once in the start-up phase and then happily forgets about.

But businesses are not static. And neither are business plans. The business plan for any business will change over time as the company evolves and expands .

In the growth phase, an updated business plan is particularly useful for:

Raising additional capital for expansion

• Seeking financing for new assets , such as equipment or property
• Securing financing to support steady cash flows (e.g., seasonality, market downturns, timing of sale/purchase invoices)
• Forecasting to allocate resources according to strategic priority and operational needs
• Valuation (e.g., mergers & acquisitions, tax issues, transactions related to divorce, inheritance, estate planning)

Keeping the business plan updated gives established businesses better chance of getting the money they need to grow or even keep operating.

Business plan is also an excellent tool for planning an exit as it would include the strategy and timelines for a transfer to new ownership or dissolution of the company.

Also, if you ever make the decision to sell your business or position yourself for a merger or an acquisition , a strong business plan in hand is going to help you to maximize the business valuation.

Valuation is the process of establishing the worth of a business by a valuation expert who will draw on professional experience as well as a business plan that will outline what you have, what it’s worth now and how much will it likely produce in the future.

Your business is likely to be worth more to a buyer if they clearly understand your business model, your market, your assets and your overall potential to grow and scale .

Related Questions

Business plan purpose: what is the purpose of a business plan.

The purpose of a business plan is to articulate a strategy for starting a new business or growing an existing one by identifying where the business is going and how it will get there to test the viability of a business idea and maximize the chances of securing funding and achieving business goals and success.

Business Plan Benefits: What are the benefits of a business plan?

A business plan benefits businesses by serving as a strategic tool outlining the steps and resources required to achieve goals and make business ideas succeed, as well as a communication tool allowing businesses to articulate their strategy to stakeholders that support the business.

Business Plan Importance: Why is business plan important?

The importance of a business plan lies in it being a roadmap that guides the decisions of a business on the road to success, providing clarity on all aspects of its operations. This blueprint outlines the goals of the business and what exactly is needed to achieve them through effective management.

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14 Types of Business Plans and Their Functions

Are you about starting a business but you don’t know what kind of business plan to write? If YES, here are 14 types of business plans and their functions.

A business plan is a formal written document that contains business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. Business plans guide owners, management and investors during the start off stage of the business, and it equally guides the business as it grows from one stage to the other.

Savvy business owners write a business plan to guide management and to promote investment capital. Businesses without a solid plan typically burn out fast or fail to turn a profit in the long run. Without a well-planned business strategy, it is not possible for a business to scale through problems smoothly, and it would equally be an uphill task to achieve success.

A foolproof business plan highlights varying aspects of a potential business and integrates few essential features like business objectives, possible growth rate and many other characteristics that your business will include and assimilate. How to promote investment capital will be illustrated broadly in a business plan.

There are various kinds of business plans and in this article we will outline the various business plans and tell you the function of each.

• Start-Up Business Plans

One of the very popular business plans in the world of business is the startup business plan. The startup business plans contain an exhaustive approach for starting and growing a business. It is different from all other business plans because of its nature and the details that are taken into consideration right from the inception of the business till the growth stage along with the vision of at least five years.

With this business plan, new businesses need to detail the steps they need to take while starting a business. This document typically includes sections describing the company, the product or service the business will supply, market evaluations and the intended projected management team.

Potential investors will also require a financial analysis with spreadsheets describing financial areas including, but not limited to, income, profit and cash flow projections. Startup business plans can equally be used by established companies to launch a new product line or to enter an entirely new business segment in the market . Conglomerates use this plan if they are launching a new business.

• It xrays the Business:  The startup business plan explains what a business is all about by describing the products or services in detail and what the ultimate goals of the business are. For example, your plan may stipulate what your revenue goals are for each of your first three years of operation. Your plan should also indicate why you believe there is a need for your business and who your main competitors will be.
• Helps in securing funding: It’s no secret that businesses can’t function without any operating capital to kick-start their production cycle. Entrepreneurs are often required to take loans from financial institutions to purchase property, get the equipment or hire manpower. Startup business plans would help them access funding speedily.
• Outlines Possible Weaknesses:   Startup business plans helps businesses to find out the weaknesses of the business in question. Highs and lows are a part of life and without them; we wouldn’t feel the need for improvement. A startup business plan helps you preempt the lows and maximize the highs.
• It provides an execution plan: Describing how your business will function and perform in the market is important when dealing with sponsors and investors. A startup business plan will explain your products and services, your targeted customers, the required funds and what’s necessary for your startup to thrive
• Internal Business Plans

As the name suggests the internal business plan is for internal stakeholders of the business. This type of business plan helps to evaluate projects which are specific and they keep the team up to speed about the current status of the company.

The company has more chances of success if everyone in the team is entirely on board, that is why the internal business plan is needed to keep everyone in the company on the same lane. It contains strategies and ways to improve the current business working and suggests a new pattern for growth.

• It answers questions pertaining to the internal workings of the company: Is the company growing or declining? Does the working pattern need change, improvement or modification? These are the type of questions which internal business plans answer. The primary purpose of the internal business plan is not to show the balance sheet of the financial position of the company to the external stakeholders but it is to run the business as smoothly as possible.
• It targets specific teams to streamline their functions: Internal business plans target a specific audience within the business, for example, the marketing team who need to evaluate a proposed project. This document will describe the company’s current state, including operational costs and profitability, then calculate if and how the business will repay any capital needed for the project. Internal plans provide information about project marketing, hiring and tech costs.
• Strategic Business Plans

A strategic business plan provides a high-level view of a company’s goals and how it will achieve them, laying out a foundational plan for the entire company. While the structure of a strategic plan differs from company to company, most include five elements: business vision, mission statement, definition of critical success factors, strategies for achieving objectives and an implementation schedule.

A strategic business plan brings all levels of the business into the big picture, inspiring employees to work together to create a successful culmination to the company’s goals. These types of plans typically skip the more detailed financial data and milestones because they are not important to the team at this point.

Strategic business plans also help to create internal efficiency so you can get the best results. The strategic business plan also comprises business vision, mission statement, strategies for achieving objectives, success factors and implementation schedules.

• They help in the execution of business strategies: Strategic business plans help to outline how the company will get to where it wants to go. They outline the strategy your team must carry out to achieve your goals, including your strengths, weaknesses and how you’re going to utilize your opportunities.
• To keep the company focused: The primary purpose of the strategic business plan is to carve the way to go ahead and answer the questions like What are you going to get and How do you intend to go about it. These answers are nothing but the strategy that the team must execute in order to achieve their targets.
• Feasibility Business Plans

A feasibility business plan answers two primary questions about a proposed business venture: who, if anyone, will purchase the service or product a company wants to sell, and if the venture can turn a profit. Feasibility business plans include, but are not limited to, sections describing the need for the product or service, target demographics and required capital. A feasibility plan ends with recommendations for going forward.

• Identify the target market of a business:  The feasibility business plan determines who will purchase the service or product of the company.
• To answer the ‘why’ question of a company: The feasibility business plan describes the need for a product or service including the target demographics and the financials required to start the business.
• Operations Business Plans

Operations plans are internal plans that consist of elements related to company operations. An operations plan, specifies implementation markers and deadlines for the coming year. The operations plan outlines employees’ responsibilities. Operational business plans are typically very small because they are cut down to a year’s worth of information.

• It projects the business on a yearly basis: The operations business plan isn’t made to tell investors how you intend on turning a profit in the span of five years. It’s simply where you expect to be in 365 days. An annual plan can also be an internal plan (i.e., the strategy your employees intend to enact over the next year).
• It is used to scout for investors: The operations business plan can also be used to attract investors at the very beginning. Annual business plans are perfect for companies that expect to make big changes in the not-so-distant future. Investors love to see this.
• Growth Business Plans

Growth plans or expansion plans are in-depth descriptions of proposed business growth and are written for internal or external purposes. If company’s growth requires investment, a growth plan may include complete descriptions of the company, its management and officers. The plan must provide all company details to satisfy potential investors.

If a growth plan needs no capital, the authors may forego obvious company descriptions, but will include financial sales and expense projections. If you’re looking for a hyper-focused business plan, this is it. Growth or expansion plans focus on a specific area within your business, like opening a new location or launching a certain product.

Growth business plans are internal and external facing. Internal growth plans are a lean version of a strategic business plan. You’ll use them if your company’s growth or expansion is being funded internally, such as if you’re launching a new product line from the last product line’s revenue. You already know what you’re funding, so you don’t need to deeply explain the product.

For an external or investor-facing growth plan, you’re going to need some different information. This type of plan assumes that the bank, investor or individual you’re pitching doesn’t know much about your business at all. You’ll need to look at it like you’re a startup and include additional details about your growth or expansion.

• Helps a company attract investors:  Growth plans are aimed at investors and banks so as to attract external investment. This plan usually include everything in a standard business plan. You need the financial data and projections, the market research and the funding request.
• It helps to analyse the business on a yearly basis: Growth plans are also termed as Annual Business plan and as the name suggests, the plan is for annual purposes. These types of business plans are more important to startups. This is because you only need a years’ worth of information to write it.
• It helps during the time of big changes in company: Growth plans are very helpful to companies that are trying to make monumental changes in a short time.
• The Lean Plan

Businesses use the Lean business plan to manage strategy, tactics, dates, milestones, activities, and cash flow. The Lean Plan is faster, easier, and more efficient than a formal business plan because it doesn’t include summaries, descriptions, and background details that you and your partners or employees already know. A Lean Plan includes specific deadlines and milestones, and the budgets allotted for meeting them.

• It is used to track milestones:  The lean business plan is most useful if you’re trying to grow your business and want to use it as a tool to track your financials and milestones against what you projected so you can respond to opportunity and react to challenges quickly.
• The standard business plan

You’ll need to put together a stand business plan if you have a business plan event, which is what it is called when a business needs to present a business plan to a bank, prospective investor, vendor, ally, partner, or employee.

The most standard business plan starts with an executive summary and includes sections or chapters covering the company, the product or service it sells, the target market, strategy and implementation milestones and goals, management team, and financial forecasting, and analysis. The exact order of topics is not important, but most people expect to see all of these topics covered as part of the standard plan.

Think of your Lean Plan as a good first draft of a standard plan. Those complete projections include the three essential financial projections (also called pro-forma statements): profit and loss, balance sheet, and cash flow. Every standard business plan needs sales plus these three essentials.

• To analyze cash flow:  The cash flow is an essential part of a standard business plan. Businesses need cash to stay open. Even if a business can survive temporarily without profits, it still needs the cash to pay its bills. And since profits alone don’t guarantee cash in the bank, projected cash flow is essential.

Many standard plans also include a table for personnel spending. Some standard plans will need additional projections to meet the needs of the specific business plan event.

For example, plans for seeking outside investment should include a discussion of an eventual exit for investors, and of course the planned use of the invested funds. Plans supporting a bank loan application might include projected ratios the bank wants to see, such as debt to equity, quick, or current ratios.

• One-page business plan

A one-page business plan is typically a one-page summary of the business, and it includes highlights only. This business plan is used to offer a very quick overview of a business.

• To provide a quick business summary: The one-page business plan summarizes the target market , business offering, main milestones, and essential sales forecast of a business in a single page. Such a summary can be useful as a summary for banks, potential investors, vendors, allies, and employees. A one-page business plan can also be called a business pitch.
• The Miniplan

The miniplan is a sort of abridged version of the normal business plan. This business plan is preferred by many recipients because they can read it, or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights while telling the same story.

• It provides a quick overview of the business for investors:  The miniplan provides a quick summary of the business or company for someone who may not have the time to go through the longer version.
• The Presentation Plan

The advent of PowerPoint presentations changed the way many, if not most, plans are presented. And while the plan is shorter than its predecessors, it’s not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of their business. But presenting your plan as a deck can be very powerful.

Readers of a plan can’t always capture your passion for the business nor can they ask questions when you finish. But in 20 minutes, you can cover all the key points and tell your story from concept and mission statement through financial forecasts.

• It helps to present the company in a detailed format to an audience: The presentation plan helps to present the company in a concise to a listening audience. In 20 minutes, you can cover all the key points and tell the story of your organisation from concept and mission statement through to financial forecasts.
• The Working Plan

A working plan is a tool to be used to operate your business. It is usually long on detail but may be short on presentation. As with a miniplan, you can probably use a somewhat higher degree of informality when preparing a working plan. It is there to work for your company and provide the required guide.

The plan is usually intended strictly for internal use, and so you can omit some elements that you need not explain to yourself and your team. Likewise, you probably don’t need to include an appendix with resumes of key executives. Nor would a working plan especially benefit from product photos.

• It provides guidelines for the day to day running of the business: The working plan is like an old pair of slacks you wear to the office on Saturdays. It’s there to be used, not admired. It provides pointers on how things are to be done in the company.
• The What-If Plan

When you face unusual circumstances, you need something a bit different from your usual working plan. For example, you might want to prepare a contingency plan when you’re seeking bank financing.

A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training and reduce duplicative efforts?

Such what-if planning doesn’t have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel and other variables so you can make good decisions.

• It helps in analyzing various business scenarios, good or bad: If a company wants to make sudden changes, a what-if business plan is used to analyse the changes properly so the company knows what it is getting itself into.
• They provide insight: This business plan provides insight into the decisions companies makes at every point in their existence. What sets these kinds of plans apart from the working and presentation plans is that they aren’t necessarily describing how you’ll run the business. They’re essentially more like an addendum to your actual business plan.
• It helps the company make good decisions: A “what if” plan helps a company consider major changes that affect the core of the business, so they can make good decisions. It’s the plan you should consider before you consider any expansion or growth plan.

14. Development Business Plan

Development plans or extension plans are top to bottom depictions of proposed business development and they are composed to display inward or outside purposes of a business. A development policy incorporates overall details of the organization, its administration and responsibility the personnel share among themselves.

The policy must show the organization detail and emphasize the elements required to fulfill potential speculators. If in case the development plan requires no capital, the plan composers may pass by those organization portrayals, but will surely incorporate money related deals and cost projections.

• It is used in detailed industry analysis: A development policy incorporates overall details of the organization, its administration and responsibility the personnel share among themselves.

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Understanding The Distinction Between a Business Plan & Business Planning

In the dynamic world of entrepreneurship, our choice of words matters. Our vocabulary can often become a veritable alphabet soup of jargon, acronyms, and those buzzwords (I'm looking at you, "disrupt").

And let's not get started on business cliches – "circle back," "synergy," “deep-dive,” etc.

Yet sometimes, it's worth pausing to consider the words we casually sprinkle around in our business conversations. In a previous article, we explored the differences between strategic and tactical business planning , two related but distinct approaches to guiding a business. Now, we're going to delve into another pair of terms that often get used interchangeably but have unique implications: "business plan" (the noun) and "business planning" (the verb).

The business plan, a noun, is a tactical document. It's typically created for a specific purpose, such as securing a Small Business Administration (SBA) loan . Think of it as a road map – it outlines the route and the destination (in this case, the coveted bank loan). But once you've reached your tactical goal (in this case, getting the loan), it often gets shoved in the glove compartment, forgotten as part of the organization's action plan until the next road trip (i.e., additional funding ).

Business planning is not a static concept, but rather a dynamic verb. It's an ongoing process that necessitates continual adjustments. It's about creating a holistic, interconnected value-creating strategic plan that benefits all stakeholders. This includes attracting top-tier employees, ensuring a return on lending or investment, and making a positive impact on the community, whether online or in real life.

That being said, the customer remains at the heart of this process. Without customers, there are no sales, no revenue, and no value. Everything else is contingent on this key element.

If we were to compare the business plan to a map, then business planning would be the journey. It's a continuous process of making strategic decisions, adapting to new paths, and steering the business towards its goals. Sometimes, it even involves redefining objectives midway.

So, let's do a "deep-dive" (I couldn't resist) into these two terms, examining their application in the real world. Along the way, we'll uncover some tools that can aid us in the ever-evolving process of strategic business planning and the more finite task of crafting a winning business plan.

The Business Plan is a Document

Alright, let's take a closer look at a phrase we've all tossed around: the business plan. Imagine it as the detailed blueprint of your organization's goals, strategies, and tactics. It's like the North Star for your entrepreneurial ship, shedding light on the key questions: what, why, how, and when (speaking of questions, here are some FAQs about the business plan ).

Writing a solid business plan isn't easy , especially if you're just dipping your toes into the world of business planning. But don’t worry; we'll get to that (eventually).

So, let's break it down. What does a business plan document consist of, exactly?

• Executive Summary: Just as it sounds, this is a quick overview of the nitty-gritty that's in the rest of your business plan. It's the introduction to your organization, highlighting your mission statement and serving up the essential details like ownership, location, and structure.
• Company Overview: This is where you will detail your products and/or services, their pricing, and the operational plan. If you're opening a restaurant, this section is where you present your menu, and it's also where you talk about your ingredient sourcing, the type of service you'll provide, and the ambiance you're aiming for. 
• Market Analysis Summary: This section demands a comprehensive analysis of your industry, target market, competitors, and your unique selling proposition. Without access to top-notch (and often not free) research tools, it can be challenging to find current industry data. Check out our  guide on the best market research tools to get started.
• Strategy and Implementation Summary: Here, you'll lay out your short-term and long-term objectives along with the strategies you'll implement to attract and retain customers. This is where you’ll talk about all the different marketing and sales strategies you'll use to charm your future customers.
• Management Summary: This is your chance to spotlight your company's key personnel. Detail the profiles of your key leaders, their roles, and why they're perfect for it. Don't shy away from acknowledging talent gaps that need to be filled, and do share how you plan to fill them!
• Pro Forma Financials: This is where you get down to the dollars and cents with a detailed five-year revenue forecast along with crucial financial statements like the balance sheet and the profit & loss statement.

A business plan is an essential instrument, not just for securing funding, but also for communicating long-term goals and objectives to key stakeholders. But, while a business plan is essential for many circumstances, it's important to understand its scope and limitations. It's a tactical tool, an important one, but it's not the be-all and end-all of business strategy. Which brings us to our next point of discussion: business planning.

Business Planning is a Process

If we view the business plan as a blueprint, then business planning is the architect. But let's be clear: we're not building just any old house here. We're building the  Winchester Mystery House of business. Just as the infamous Winchester House was  constantly under construction , with new rooms being added and old ones revamped, so too is your business in a state of perpetual evolution. It's a dynamic, ongoing process, not a one-and-done event.

In the realm of business planning, we're always adding 'rooms' and 'corridors' – new products, services, and market strategies – to our 'house'. And just as  Sarah Winchester reputedly consulted spirits in her Séance Room to guide her construction decisions, we consult our customers, market data, and strategic insights to guide our strategy. We're in a constant state of assessing, evolving, executing, and improving.

Business planning touches all corners of your venture. It includes areas such as product development, market research, and strategic management. It's not about predicting the future with absolute certainty – we’re planners, not fortune tellers. It's about setting a course and making calculated decisions, preparing to pivot when circumstances demand it (think global pandemics).

Business planning is not a 'set it and forget it' endeavor. It's akin to being your company's personal fitness coach, nudging it to continually strive for better. Much like physical fitness, if you stop the maintenance, you risk losing your hard-earned progress.

Business Planning Case Study: Solo Stove

Now that summer is here, my Solo Stove stands as a tangible testament to effective business planning.

For those unfamiliar, Solo Stove started with a simple yet innovative product – a smoke-limiting outdoor fire pit that garnered over $1.1 million on Kickstarter in 2016, far exceeding its original objective. Since then, it has expanded its portfolio with products tailored to outdoor enthusiasts. From flame screens and fire tools to color-changing flame additives, each product is designed to fit seamlessly into modern outdoor spaces, exuding a rugged elegance that resonates with their target audience.

This strategic product development, a cornerstone of business planning, has allowed Solo Stove to evolve from a product to a lifestyle brand. By continually listening to their customers, probing their desires and needs, and innovating to meet those needs, they've built a brand that extends beyond the products they sell.

Their strategy also includes a primary "Direct To Consumer" (DTC) revenue model, executed via their e-commerce website. This model, while challenging due to increased customer acquisition costs, offers significant benefits, including higher margins since revenue isn’t split with a retailer or distributor, and direct interaction with the customer.

Through its primary business model,  Solo Stove has amassed an email database of over 3.4 million customers . This competitive advantage allows for ongoing evaluation of customer needs, driving product innovation and improvement, and enabling effective marketing that strengthens their mission. The success of this approach is evident in the company's growth: from 2018 to 2020,  Solo Stove’s revenue grew from $16 million to $130 million , a 185% CAGR.

While  85% of their revenue comes from online DTC channels, Solo Stove has also enhanced their strategic objectives by partnering with select retailers that align with their reputation, demographic, and commitment to showcasing Solo Brands’ product portfolio and providing superior customer service.

Solo Stove's success underscores how comprehensive business planning fosters regular assessment, constant evolution, and continual improvement. It's more than setting goals – it's about ceaselessly uncovering ways to deliver value to your customers and grow your business.

However, even successful businesses like Solo Stove can explore additional strategic initiatives for growth and diversification, aligning with their strategic direction and operational planning. For instance, a subscription model could provide regular deliveries of products or a service warranty, creating a consistent revenue stream and increasing customer loyalty. Alternatively, a B2B model could involve partnerships with adventure tourism operators, who could purchase Solo Stove products in bulk.

These complementary business models, when integrated into the operational plan, could support the primary DTC model by driving customer acquisition, providing ongoing revenue streams and expanding the customer base. This strategic direction ensures that Solo Stove continues to thrive in a competitive market.

The Interplay between the Business Plan (Noun) and Business Planning (Verb)

In the realm of business strategy, there's an intriguing chicken-and-egg conundrum: which comes first, the business plan or business planning? The answer is both straightforward and complex: they're two sides of the same coin, each indispensable in its own right and yet inextricably linked.

The process of business planning informs and modifies the business plan, just as the business plan provides a strategic foundation for the planning process. This interplay embodies the concept of Model-Based Planning™, where the business model serves as a guide, yet remains flexible to the insights and adaptations borne out of proactive business planning.

Let's revisit the Solo Stove story to elucidate this concept. Their business model, primarily direct-to-consumer, laid the groundwork for their strategy. Yet, it was through continuous business planning  –  the assessment of customer feedback, market trends, and sales performance –  that they were able to refine their model, expand their product portfolio, and enhance their growth objectives. Their business plan wasn't a static document but a living entity, evolving through the insights gleaned from ongoing business planning.

So, how can you harness the power of both the tactical business plan and strategic business planning in your organization? Here are a few guiding principles:

• Embrace Model-Based Planning™: Start with a robust business model that outlines your strategic plan. But remember, this isn't set in stone—it's a guiding framework that will evolve over time as you gain insights from your strategic planning process.
• Make business planning a routine: Regularly review and update your business plan based on your findings from market research, customer feedback, and internal assessments. Use it as a living document that grows and adapts with your business.
• Foster open communication: Keep all stakeholders informed about updates to your business plan and the insights that informed these changes. This promotes alignment and ensures everyone is working towards the same goals.
• Be agile and adaptable: A key part of business planning is being ready to pivot when necessary . Whether it's a global pandemic or a shift in consumer preferences, your ability to respond swiftly and strategically to changing circumstances is crucial for long-term success.

Fanning the Flames: From Planning to Plan

The sparks truly ignite when you understand the symbiotic relationship between tactical business plans, strategic business planning, and the achievement of strategic goals. Crafting a tactical business plan (the noun) requires initial planning (the verb), but then you need to embark on continuous strategic planning (the verb) to review, refine, and realign your strategic business plan (the noun). It's a rhythm of planning, execution, review, and adjustment, all guided by key performance indicators.

Business planning, therefore, isn't a one-off event, but rather an active, ongoing process. A business plan needs constant nurturing and adjustment to stay relevant and guide your organization's path to success. This understanding frames your business plan not as a static document, but as a living, breathing entity, evolving with each step your business takes and each shift in the business landscape. It's a strategic roadmap, continually updated to reflect your organization's objectives and the ever-changing business environment.

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Unit 1: What is Accounting

Users of accounting information.

The accounting process provides financial data for a broad range of individuals whose objectives in studying the data vary widely.   Three primary users of accounting information were previously identified, Internal users, External users, and Government/ IRS.  Each group uses accounting information differently, and requires the information to be presented differently.

Internal Users

Accounting supplies managers and owners with significant financial data that is useful for decision making. This type of accounting in generally referred to as managerial accounting.

 Some of the ways internal users employ accounting information include the following:

• Assessing how management has discharged its responsibility for protecting and managing the company’s resources
• Shaping decisions about when to borrow or invest company resources
• Shaping decisions about expansion or downsizing

External Users

Typically called financial accounting, the record of a business’ financial history for use by  external entities is used for many purposes.  The external users of accounting information fall into six groups; each has different interests in the company and wants answers to unique questions. The groups and some of their possible questions are:

• Owners and prospective owners. Has the company earned satisfactory income on its total investment? Should an investment be made in this company? Should the present investment be increased, decreased, or retained at the same level? Can the company install costly pollution control equipment and still be profitable?

• Employees and their unions. Does the company have the ability to pay increased wages? Is the company financially able to provide long-term employment for its workforce?
• Customers. Does the company offer useful products at fair prices? Will the company survive long enough to honor its product warranties?
• Governmental units. Is the company, such as a local public utility, charging a fair rate for its services?
• General public. Is the company providing useful products and gainful employment for citizens without causing serious environmental problems?

Some of the ways external users employ accounting information include the following:

• Stockholders have the right to know how a company is managing its investments
• Federal and State Governments require tax returns and other documents often prepared by accountants
• Banks or lending institutions may use accounting information to guide decisions such as whether to lend or how much to lend a business
• Investors will also use accounting information to guide investment decisions

General-purpose financial statements provide much of the information needed by external users of financial accounting. These financial statements are formal reports providing information on a company’s financial position, cash inflows and outflows, and the results of operations. Many companies publish these statements in annual reports, also known as a 10-K or a 10-Q (quarterly report). The annual report contains the independent auditor’s opinion as to the fairness of the financial statements, as well as information about the company’s activities, products, and plans.  Typically, the best place to find these reports for a public company can be on their website under the Investor relations section. Financial statements used by external entities are prepared using generally accepted accounting principles, or GAAP.   We will discuss the language of GAAP further in later sections.

Government / IRS

Government agencies that track and use taxes are interested in the financial story of a business.  They want to know whether the business is paying taxes according to current tax laws. The language in which tax-related financial statements are prepared is called IRC or Internal Revenue Code.  Tax preparation will be outside the scope of this course.

Important Points to Remember

• Internal users are people within a business organization who use financial information. Examples of internal users are owners, managers, and employees.
• External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.
• Photo: IRS Sign. Authored by : Joshua Doubek. Located at : http://commons.wikimedia.org/wiki/File:IRS_Sign.JPG#mediaviewer/File:IRS_Sign.JPG . License : CC BY-SA: Attribution-ShareAlike
• Accounting Principles: A Business Perspective. Authored by : James Don Edwards, University of Georgia & Roger H. Hermanson, Georgia State University. Provided by : Endeavour International Corporation. Project : The Global Text Project . License : CC BY: Attribution

7 Different Types of Business Plans Explained

11 min. read

Updated April 10, 2024

Business plans go by many names: Strategic plans, traditional plans , operational plans, feasibility plans, internal plans, growth plans, and more.

Different situations call for different types of plans. 

But what makes each type of plan unique? And why should you consider one type over another?

In this article, we’ll uncover a quick process to find the right type of business plan, along with an overview of each option. 

Let’s help you find the right planning format.

• What type of business plan do you need?

The short answer is… it depends. 

Your current business stage, intended audience, and how you’ll use the plan will all impact what format works best. 

Remember, just the act of planning will improve your chances of success . It’s important to land on an option that will support your needs. Don’t get too hung up on making the right choice and delay writing your plan.

So, how do you choose?

1. Know why you need a business plan

What are you creating a business plan for ? Are you pitching to potential investors? Applying for a loan? Trying to understand if your business idea is feasible?

You may need a business plan for one or multiple reasons. What you intend to do with it will inform what type of plan you need.

For example: A more robust and detailed plan may be necessary if you seek investment . But a shorter format could be more useful and less time-consuming if you’re just testing an idea.

2. Become familiar with your options

You don’t need to become a planning expert and understand every detail about every type of plan. You just need to know the basics:

• What makes this type of plan unique?
• What are its benefits?
• What are its drawbacks?
• Which types of businesses typically use it?

By taking the time to review, you’ll understand what you’re getting into and be more likely to complete your plan. Plus, you’ll come away with a document built with your use case(s) in mind—meaning you won’t have to restart to make it a valuable tool.

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3. Start small and grow

When choosing a business plan format, a good tactic is to opt for a shorter option and build from there. You’ll save time and effort and still come away with a working business plan.

Plus, you’ll better understand what further planning you may need to do. And you won’t be starting from scratch.

Read More: How to identify the right type of plan for your business

Again, the type of business plan you need fully depends on your situation and use case. But running through this quick exercise will help you narrow down your options. 

Now let’s look at the common business plan types you can choose from.

• Traditional business plan

The traditional (or standard) business plan is an in-depth document covering every aspect of your business. It’s the most common plan type you’ll come across. 

A traditional business plan is broken up into 10 sections:

• Executive summary
• Description of products and services
• Market analysis
• Competitive analysis
• Marketing and sales plan
• Business operations
• Key milestones and metrics
• Organization and management team
• Financial plan
• Appendix 

Why use this type of plan?

A traditional business plan is best for anyone approaching specific business planning events—such as presenting a business plan to a bank or investor for funding.

A traditional plan can also be useful if you need to add more details around specific business areas. 

For example: You start as a solopreneur and don’t immediately need to define your team structure. But eventually you hit a threshold where you need more staff in order to keep growing. A great way to explore which roles you need and how they will function is by fleshing out the organization and management section .

That’s the unseen value of a more detailed plan like this. While you can follow the structure outlined above and create an in-depth plan ready for funding, you can also choose which sections to prioritize. 

Read More: How to write a traditional business plan  

• One-page plan

The one-page business plan is a simplified (but just as useful) version of a traditional business plan. It follows the same structure, but is far easier to create. It can even be used as a pitch document.

Here’s how you’ll organize information when using a one-page plan:

• Value proposition
• Market need
• Your solution
• Competition
• Target market
• Sales and marketing
• Budget and sales goals
• Team summary
• Key partners
• Funding needs

A one-page plan is faster and easier to assemble than a traditional plan. You can write a one-page plan in as little as 30 minutes . 

You’ll still cover the crucial details found in a traditional plan, but in a more manageable format.

So, if you’re exploring a business idea for the first time or updating your strategy—a one-page plan is ideal. You can review and update your entire plan in just a few minutes.

Applying for a loan with this type of plan probably wouldn’t make sense. Lenders typically want to see a more detailed plan to accurately assess potential risk. 

However, it is a great option to send to investors. 

“Investors these days are much less likely to look at a detailed plan,” says Palo Alto Software COO Noah Parsons. “An executive summary or one-page plan, pitch presentation, and financials are all a VC is likely to look at.”

Creating a more detailed plan is as much about being prepared as anything else. If you don’t dig into everything a traditional plan covers, you’ll struggle to land your pitch . 

If you don’t intend to seek funding, a one-page plan is often all you need. The key is regularly revisiting it to stay on top of your business. 

Let’s explore two unique processes to help you do that: 

Read More: How to write a one-page business plan

Lean planning process

Lean planning is a process that uses your one-page plan as a testing tool. The goal is to create a plan and immediately put it into action to see if your ideas actually work. You’ll typically be focusing on one (or all) of the following areas: 

• Strategy – What you will do
• Tactics – How you will do it
• Business Model – How you make money
• Schedule – Who is responsible and when will it happen

Why use this process?

Lean planning is best for businesses that need to move fast, test assumptions, revise, and get moving again. It’s short and simple, and meant to get everyone on the same page as quickly as possible. 

That’s why it’s so popular for startups. They don’t necessarily need a detailed plan, since they’re mostly focused on determining whether or not they have a viable business idea .

The only drawback is that this planning process is built primarily around early-stage businesses. It can be a useful tool for established businesses looking to test a strategy, but it may not be as helpful for ongoing management.

Read More: The fundamentals of lean planning

Growth planning

Growth planning is a financials-focused planning process designed to help you make quick and strategic decisions.

Again, it starts with a one-page plan outlining your strategy, tactics, business model, and schedule. The next step is to create a working financial forecast that includes projected sales, expenses, and cash flows.

From there, you run your business. 

As you go, track your actual financial performance and carve out time to compare it to your forecasts . If you spot any differences, these discrepancies may indicate problems or opportunities that call for adjusting your current strategy.

Growth planning combines the simplicity of the one-page plan and the speed of lean planning, with the power of financial forecasting. 

This makes the process useful for every business stage and even allows you to skip to the forecasting step if you already have a plan.

With growth planning, you’ll:

• Regularly revisit your financials
• Better understand how your business operates 
• Make quick and confident decisions

This process focuses on growing your business. If diving into your financials isn’t a priority right now, that’s okay. Start with a one-page plan instead, and revisit growth planning when you’re ready.

Read More: How to write a growth-oriented business plan

• Internal plan

Sometimes you just need a business plan that works as an internal management tool. 

Something to help you: 

• Set business goals
• Provide a high-level overview of operations
• Prepare to create budgets and financial projections

You don’t need an overly long and detailed business plan for this. Just a document that is easy to create, useful for developing or revisiting your strategy, and able to get everyone up to speed.

The internal plan is a great option if you’re not planning to present your plan to anyone outside your business. Especially if you’re an up-and-running business that may have created a plan previously. You might just need something simple for day-to-day use.

Read More: 8 steps to write a useful internal business plan

• 5-year business plan

Some investors or stakeholders may request a long-term plan stretching up to five years. They typically want to understand your vision for the future and see your long-term goals or milestones.  

To be honest, creating a detailed long-term business plan is typically a waste of time. There are a few exceptions:

• A long-term plan is specifically asked for
• You want to outline your long-term vision
• Real estate development
• Medical product manufacturing
• Transportation, automotive, aviation, or aerospace development

The reality is, you can’t predict what will happen in the next month, let alone the next one, three, or five years.

So, when creating a long-term plan, don’t dig too deep into the details. Focus on establishing long-term goals , annual growth targets, and aspirational milestones you’d like to hit.

Then supplement these with a more focused one-page plan that actually describes your current business, which you can use in your business right now.

Read More: How to write a five-year business plan

• Nonprofit business plan

A nonprofit business plan is not too different from a traditional plan. You should still cover all of the sections I listed above to help you build a sustainable business. 

The main differences in a nonprofit plan are tied to funding and awareness. You need to account for:

• Fundraising sources and activities.
• Alliances and partnerships.
• Promotion and outreach strategies.

You also need to set goals, track performance, and demonstrate that you have the right team to run a fiscally healthy organization. You’re just not pursuing profits, you’re trying to fulfill a mission. But you cannot serve your community if your organization isn’t financially stable.

If you can use your business plan to show that you’re a well-organized nonprofit organization, you are more likely to attract donors and convince investors to provide funding.

Read More: How to write a nonprofit business plan

Resources to help write your business plan

Don’t get too hung up on the type of business plan you choose. Remember, you can always start small and expand if you need to.

To help you do that, I recommend downloading our free one-page business plan template . It’s especially useful if you’re exploring an idea and need a quick way to document how your business will operate.

If you know you’ll pursue funding, download our free traditional business plan template . It’s already in an SBA-lender-approved format and provides detailed instructions for each section. And if you want to explore other options, check out our roundup of the 8 best business plan templates you can download for free.

Lastly, check out our library of over 550 sample business plans if you need inspiration. These can provide specific insight into what you should focus on in a given industry.

Remember, just by deciding to write a business plan, you are increasing your likelihood of success. Pick a format and start writing!

Types of business plans FAQ

Which type of planning should be done for a business?

The type of planning fully depends on your business stage and how you intend to use the plan. Generally, whatever format you choose should help you outline your strategy, business model, tactics, and timeline.

How many types of business plans are there?

There are seven common types of business plans, including: traditional, one-page, lean, growth, internal, 5-year, and nonprofit plans.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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13.2 Identify User Needs for Information

The concept of the triple bottom line expanded the role of reporting beyond shareholders and investors to a broader range of stakeholders – that is, anyone directly or indirectly affected by the organization, including employees, customers, government entities, regulators, creditors, and the local community. Naturally, companies may feel their first obligation is to their present and potential investors. But it also makes good business sense to consider other stakeholders who can affect the company’s livelihood. Let’s examine the various users of sustainability reports and their particular information needs. Primary users would be considered shareholders and investors, whereas secondary users would be customers, suppliers, the community and regulators.

Shareholders

Many consider the company’s shareholders to be its primary information user group. These equity investors may be small single investors or they may be part of an institutional investment fund charged with investing on behalf of its members. As shareholders they concern themselves with the future viability of the company and want profits to be sustained or increased over the long term. Shareholders often use financial ratios, such as earnings per share (EPS), return on investment (ROI), and the price/earnings ratio to evaluate the financial health and the sustainability of financial growth of the company. Shareholders not only evaluate whether there is current value in owning stock of the company but also whether there will continue to be value in owning that company’s stock. Otherwise the shareholder is likely to divest of their ownership interest.

One ratio that shareholders often use to measure the value of the company’s stock relative to the company’s earnings is the price-earnings ratio , or P/E ratio . In the P/E ratio, the market price of the stock is divided by the earnings per share of the company’s stock. This ratio indicates the amount an investor is willing to pay for one dollar of the company’s earnings. For example, if a stock is trading at a P/E of 30, then this indicates investors are willing to pay $30 for $1 of current earnings. A high P/E ratio indicates investors expect high future earnings. A low P/E ratio has several interpretations but could indicate a company is undervalued. Many investors use the P/E ratio as a measure of whether or not a stock should be purchased, but no single metric should be used alone. In addition, the P/E ratio is only useful when comparing changes across time for a single company to see trends or lack of trends. The P/E ratio is most useful if compared across companies within a given industry sector. Most often, growth will vary widely between different sectors but will be more similar within a particular sector. Investors buy and sell stock for many reasons, both financial and non-financial. They can sell a stock due to lack of current growth in value or an expected drop in future earnings. They can also buy a stock because the company participates in activities that the shareholder values, such as fair wages and greenhouse emission reductions even if the company has a low P/E ratio. Let’s look at an example of an investment driven by more than just the company’s current financial situation.

In 2008, Warren Buffett’s MidAmerican Energy Company , a subsidiary of Berkshire Hathaway , bought a $230m stake in BYD , a Chinese battery maker about to begin auto production. 52 Although the auto industry initially ridiculed Buffet’s investment in such a little- known company, he may well have the last laugh. Since 2008, the company has evolved into the world’s leading producer of electric cars, and its shares now trade at almost 10 times what MidAmerican paid for them. This increase in value reflects the market’s optimism about the future of the company based on the Chinese government’s commitment to speeding up the phasing out of fossil fuels.

The new ethical investing movement focuses on eliminating investments that conflict with shareholders’ values, such as dependence on environmentally damaging fossil fuels. The movement is growing each year. In 2016, ethical investments topped $8.7 trillion, up 33% from 2014, and they now account for 20% of all investment under professional management. 53 Ethical investors are increasingly avoiding polluters, weapon manufacturers, and tobacco companies as well as companies with a poor track record on human rights or philosophies that do not align with a fund’s religious tenets. Pension funds, such as the New York City Pension Fund 54 have announced a move away from investing in companies in the fossil fuel industry, a move that will put substantial pressure on these companies to seek out alternatives to the non-renewables business model. On the opposite side of the country, the California Public Employees’ Retirement System announced that it had divested from most of its holdings in thermal coal stock. 55

Investors are also increasingly looking to the future to evaluate whether a firm’s stock price is sustainable. Consider that, as the cost of renewable energy alternatives become cheaper, non-renewable resources become less able to compete. That is, the price of the non-renewable commodity falls to a point where the costs of extraction become greater than the price that can be obtained for the asset, and so the non-renewable resource remains in the ground. 56 At this point, the value of the asset, the mine, is impaired, which leads to a reduced share price.

For example, in mid-2017, Coal India , the largest coal-mining company in the world, announced that it would close 96 57 of its 394 mines 58 by March 2018 because they would be no longer economically viable after the Indian Government announced it would cut its commitments to purchase coal after 2022. 59

Investors, including ethical investors, must look to the future of their investments, buying shares that are sustainable for the long term to provide better returns. A recent Harvard Business Review study showed that socially responsible companies post higher profits and stock performance than those that were not focused on social responsibility. 60 This result is supported by a Deutsche Bank analysis of more than 2,000 studies dating back to the 1970’s, 90% of which suggested that socially responsible investing gives better returns than passive investing. 61

Ethical Considerations

Millennials are demanding sustainable investments.

According to the Forum for Sustainable and Responsible Investment, a U.S.-based membership organization, “sustainable, responsible and impact investing is an investment discipline that considers environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact.” 62 Demand for this type of sustainable investments is being driven in a large part by millennials who prefer that their investments align with their personal beliefs and values. Ethical companies are seeing value in the millennial investors because “millennials are poised to receive more than $30 trillion of inheritable wealth.” 63 Forward-looking companies need to develop an awareness of millennial values.

Forward-looking companies and investment advisor companies also need to adapt to a sustainable investment environment. This changes the perspective of accounting because managers will need to look to other factors besides profits to guide management’s business decisions. Management and accountants will need to look beyond just numbers, and this will require a change in culture, technology, and operational and financial reporting to investors, potential investors and stakeholders.

Sustainability reports provide useful information for lenders. Lenders want to know that the company borrowing from them does not have any going-concern risks that could affect its ability to repay the loan ( Figure 13.8 ). They want to know the company will not be sued for human rights violations at home or abroad, be unable to repay its loans because consumer boycotts have hurt its cash flow, or that they maintain valuable property assets in high-risk areas. For example, after the 2017 Houston floods, a number of Houston-based banks were examined to find that they had a high level of exposure in commercial real estate in Houston. 64 This type of investment concentration in a single geographic area can be risky for lenders as a single disaster can have a more damaging effect than on a portfolio spread over a broader geographical area.

Employees and potential employees want to know that the company they work for is concerned about their safety and is an ethical organization. They want assurance that they will be fairly compensated and that all employees have equal rights and opportunities, regardless of gender, race, religion, or sexual orientation.

Recent studies show that employees increasingly want to work for companies that align with their own values and will be more loyal to those organizations. In 2016, 76% of millennials said that a company’s social and environmental commitments were considerations in employment, with 64% of millennials indicating that they would not work for a company that did not have strong corporate social responsibility practices. 65

Employees also report higher levels of satisfaction when their employers engage in corporate giving programs that are aligned with employee values or are chosen by employees. 66 For example, Intel will donate $10 to an educational institution, environmental program, or other community organization for every hour an employee volunteers there. More than 40% of Intel ’s U.S. employees have donated time that totals hundreds of thousands of volunteer hours. 67 Other firms have corporate giving programs that match employee’s charitable donations dollar for dollar.

Customers often have many choices about where to spend their hard-earned dollars. They want to know the companies to which they give that money reflect their own values and beliefs. If a company is seen to be uncaring about an issue, then customers may arrange campaigns to boycott the company (see the Nestlé story for an example of such consumer activism).

A 2016 study by Unilever showed that 33% of consumers buy from brands they believe are doing social or environmental good and that this presents a €966 billion (over 1.1 trillion $USD) opportunity for brands. As such, it is important for a company to demonstrate their commitment to CSR, and sustainability reporting offers a medium to do this. 68

Governments and Regulators

Governments and regulators want to be able to see that a company is behaving responsibly. If they are confident that it is, there is less need to design laws and regulations that might restrict the company even more than if it undertook best-practice measures on its own. Many companies form industry alliance groups that aim to implement best practices in trade, social responsibility, or environmental initiatives.

The community at large also wants to know that the organization is behaving at the level of society’s expectations. This reflects the existence of a social contract , the expectation that companies will hold to an unwritten contract with society as a whole. If a firm is undertaking actions that might harm society or that reject its general values, community backlash may cost the firm dearly.

In summary, a company’s accountability to a wider group of users is an element of stakeholder theory. This theory presents a view that asserts a corporation has an obligation to groups beyond just its shareholders.

Identifying Stakeholders

Locate the sustainability report of a Fortune 500 company and read the management discussion in it. Explain who you think the company considers its primary and secondary users. What information about itself and its operations does the company attempt to convey to each audience? Do you think its choices meet the information needs of these two groups of stakeholders? Why or why not?

Invariably, the primary users will be shareholders and creditors. Secondary users would be customers, employees, environmental groups, the community and regulators. The strength or relevance of each user will be dependent on the type of business discussed in the response.

Public Benefit Corporations

Traditionally, standard American corporations consider their ultimate purpose as maximizing the profits of the shareholders. In the United States, directors of for-profit corporations recognize that one of their major goals is to maximize shareholder value. While corporations generally have the ability to engage in any legal activities, including those that are socially responsible, corporate decision-making must be justified in terms of creating shareholder value. Mission driven and other socially conscious businesses, impact investors, and social entrepreneurs are constrained by this inflexible legal framework that does not accommodate for-profit entities whose mission and impact is central to their business model.

In response, the benefit corporation model has emerged, which “broadens the perspective of traditional corporate law by incorporating concepts of purpose, accountability and transparency with respect to all corporate stakeholders, not just stockholders.” 69 Public benefit corporations expand the obligations of boards, requiring them to consider environmental and social factors, as well as the financial interests of shareholders. This gives directors and managers the legal protection to pursue a mission other than maximizing profit and consider the impact their business has on society and the environment.

• 52 Keith Bradsher. “Buffet Buys Stake in Chinese Battery Manufacturer.” New York Times . September 29, 2008. https://www.nytimes.com/2008/09/30/business/worldbusiness/30battery.html
• 53 Matt Whittaker. “Ethical Investing Continues to Grow.” U.S. News and World Report . January 27, 2017. https://money.usnews.com/investing/articles/2017-01-27/ethical-investing-continues-to-grow
• 54 William Neuman. “To Fight Climate Change, New York City Takes on Oil Companies.” New York Times . January 10, 2018. https://www.nytimes.com/2018/01/10/nyregion/new-york-city-fossil-fuel-divestment.html?
• 55 Randy Diamond. “CalPERS Reveals It Divested from Most Thermal Coal Companies.” Pensions & Investments . August 7, 2017. http://www.pionline.com/article/20170807/ONLINE/170809876/calpers-reveals-it-divested-from-most-thermal-coal-companies
• 56 M.K. Linnenluecke, J. Birt, J. Lyon, and B.K. Sidhu. “Planetary Boundaries: Implications for Asset Impairment.” Accounting & Finance 55, no. 4 (2015).
• 57 IANS. “Coal India Could Close 53 Underground Mines This Fiscal.” The Economic Times . September 12, 2018. https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/coal-india-could-close-53-underground-mines-this-fiscal/articleshow/65783526.cms
• 58 Coal India. Annual Report and Accounts 2016–2017 . n.d. https://www.coalindia.in/DesktopModules/DocumentList/documents/Annual_Report_&_Accounts_2016_17_Deluxe_English_07112017.pdf
• 59 Harriet Agerholm. “World’s Biggest Coal Company Closes 37 Mines as Solar Power’s Influence Grows.” Independent . June 21, 2017. http://www.independent.co.uk/news/world/asia/coal-india-closes-37-mines-solar-power-sustainable-energy-market-influence-pollution-a7800631.html
• 60 MoneyShow. “Socially-Responsible Investing: Earn Better Returns from Good Companies.” Forbes . August 16, 2017. https://www.forbes.com/sites/moneyshow/2017/08/16/socially-responsible-investing-earn-better-returns-from-good-companies/#7f73a8a1623d
• 61 MoneyShow. “Socially-Responsible Investing: Earn Better Returns from Good Companies.” Forbes . August 16, 2017. https://www.forbes.com/sites/moneyshow/2017/08/16/socially-responsible-investing-earn-better-returns-from-good-companies/#7f73a8a1623d
• 62 US SIF. “SRI Basics.” n.d. https://www.ussif.org/sribasics
• 63 Ernst & Young. Sustainable Investing: The Millennial Investor . 2017. https://www.ey.com/Publication/vwLUAssets/ey-sustainable-investing-the-millennial-investor-gl/$FILE/ey-sustainable-investing-the-millennial-investor.pdf
• 64 Ely Razin. “As Harvey Leaves Houston Reeling, These Banks Are More Exposed Than Others.” Forbes . August 31, 2017. https://www.forbes.com/sites/elyrazin/2017/08/31/as-harvey-leaves-houston-reeling-these-banks-are-more-exposed-than-others/#423dcb5e6355
• 65 Cone Communications (Whitney Dailey). “Three-Quarters of Millennials Would Take a Pay Cut to Work for a Socially Responsible Company, According to the Research from Cone Communications.” November 2, 2016. http://www.conecomm.com/news-blog/2016-cone-communications-millennial-employee-engagement-study-press-release
• 66 America’s Charities. “Facts and Statistics on Workplace Giving, Matching Gifts, and Volunteer Programs.” n.d. https://www.charities.org/facts-statistics-workplace-giving-matching-gifts-and-volunteer-programs
• 67 Intel. “Giving Back: How Our Employees Make a Difference.” n.d. https://www.intel.com/content/www/us/en/jobs/life-at-intel/usa/giving-back.html
• 68 Unilever. “Report Shows a Third of Consumers Prefer Sustainable Brands.” May 5, 2017. https://www.unilever.com/news/Press-releases/2017/report-shows-a-third-of-consumers-prefer-sustainable-brands.html
• 69 Morris, Nicols, Arsht & Tunnel. “Understanding Delaware’s Benefit Corporation Governance Mode.” The Public Benefit Corporation Guidebook . May 2016. http://news.mnat.com/rv/ff00272e4c8b3699806e25d24c48a286df5bf926

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Who are the primary consumers of a business plan?

The primary outside users of a business plan are lenders and investors.

Add your answer:

What is a macro business plan?

macro business plan

Enumerate the primary goals of a business?

enumerate and explain the primary goals of business

Who are the primary customers of wholesaling business?

The primary customer of a wholesaling business would be retailers - purchasing stock for their business.

What is the further action for a feasibility plan?

If the plan is to continue with the business proposal then proceed to write a business plan

What is the primary aim of business?

The primary aim of business is to make money or accumulate wealth.

Who are the primary consumers of business plan?

the primary outside users of a business plan are lenders and investors.

What happends when primary and secondary consumers die?

Although its impossible , but if both primary and secondary consumers die your business will run out of customers.

Are primary carnivores consumers?

No! Carnivores are secondary consumers. Herbivores are primary consumers.

What is the primary purpose of business plan?

The purpose of a business plan is to identify, describe and analyze a business opportunity and/or a business already under way, examining its technical, economic and financial feasibility. I learned that and many other thing taking free business classes here: khabarbabal.online/file/NjA0ZGZjODEt

Who are the primary customers of manufacturing business?

the people in the community and other surrounding areas, the peoplr.

Are deer primary consumers?

No, a deer would be a primary consumer. Remember that the trophic levels follow: primary producers, primary consumers, secondary consumers, and tertiary consumers.

Do primary consumers eat other primary consumers?

What are primary secondary and tertiary consumers in the tropical rain forest.

primary consumers are the consumers which feed upon the producers secondary consumers are the consumers which feed upon the primary consumers tertiary consumers are the consumers which feed upon the secondary consumers

What is a secondary primary and Tertiary consumer?

Primary consumers eat primary producers(plant-eaters). Secondary consumers eat primary consumers (meat-eaters) Tertiary consumers eat secondary consumers. Quaternary consumers eat tertiary consumers.

Are mice primary or secondary consumers?

Rats are primary consumers. This means they will eat almost everything. In the wild, primary consumers provide nutrition for secondary consumers.

How are primary consumers different from secondary consumers?

primary consumers are herbivores and secondary consumers are carnivores so secondary consumers eat primary consumers

What primary consumers are on everest?

The primary consumers on Everest are predators.

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